Online Archives Articles
Thanks to Uncle Sam, a 90-year-old in the hills of West Virginia soon will be able to use a new broadband connection to apply for a new job cleaning up one of the government’s decaying nuclear weapons production sites. This person will be able to use a special one-time $250 cash payment from Social Security to purchase a ticket on a new high-speed rail link, which will magically transport the elderly applicant to his job interview. Unfortunately, when he arrives at this radioactive job-creation venue, our friend from West Virginia will be informed that the government’s new electronic database of all of the nation’s health records indicates that he died three years ago. Think we’re making this stuff up? Guess you haven’t read the fine print in the mammoth $787-billion economic recovery bill signed by President Obama this week. The spending portion of the package — not including billions in tax credits and other tax incentives — totals more than $500 billion. The blizzard of spending is divided into four major categories: infrastructure/transportation, education, health and energy. Before we detail the goodies, let’s get the bad news out of the way: direct aid to the states to help plug their burgeoning state budget deficits was reduced to a minor subcategory totaled a paltry $8.8 billion. If you think that is a large number, consider this: California currently is grappling with a $42-billion deficit. Perhaps the federal lawmakers assumed that the $44 billion they allocated in aid to local school districts and $86.6 billiion to defray state Medicaid costs will indirectly offset state budget deficits. We’ll see. Here’s how the stimulus spending was allocated by Congress: Education: $44.3 billion — aid to local school districts $25.2 billion – funding for special education and No Child Left Behind $15.6 billion – increase maximum Pell Grants from $500 to $5,300 $2 billion – Head Start Energy: $11 billion – construction of ”smart” electricity grid $5 billion – weatherization of existing dwellings $6.4 billion – cleanup of nuclear weapons production sites $6 billion – loans for renewable energy projects $6.3 billion – clean energy/energy efficiency grants to states $4.5 billion – converting federal buildings to energy efficiency $2 billion – development of electric car batteries Health: $86.6 billion – state Medicaid costs $24.7 billion – subsidize 65% of COBRA medical coverage payments for unemployed. $10 billion – NIH and other health-related research projects $19 billion – create electronic database of all health records $1 billion – prevention/wellness programs Transportation/infrastructure: $27.5 billion – highway and bridge construction/repair $8.4 billion – mass transit $8 billion – high-speed rail $1.3 […]
We knew it was a bad sign when Robert Rubin was standing behind Barack Obama when Obama introduced his team of economic wise men a few days after the presidential election. Rubin, the champion of deregulation who served as Treasury Secretary under Bill Clinton, spent the past few years as the eminence grise of Citigroup. Under his stewardship, what was once the largest banking conglomerate gorged itself on toxic assets while Rubin collected more than $100 million in personal compensation. Last month, with Citi still hemorrhaging despite an infusion of $45 billion from U.S. taxpayers, Rubin crawled away from the scene of the carnage. On his way out the door, he petulantly told the New York Post that anyone complaining about his compensation needs to understand that he had better offers elsewhere, but took less to play his role in the destruction of the U.S. banking system. So it should come as no surprise that Rubin’s protege, the tax cheat Timothy Geithner, is as clueless as his mentor. Geithner emerged in the aptly named Cash Room at the Treasury Department yesterday to unveil his long-awaited plan to rescue the banking system. With the global financial system completely broken, many leading economists assumed that the new Treasury chief would announce a thinly disguised nationalization of the U.S. banking system. They assumed that Geithner would have no choice but to tell us that Uncle Sam would scoop up all the toxic assets and lock them in a federal vault until they regain a smidgeon of value, and that the government would take a majority ownership stake in all the large banks and recapitalize them. This would be very expensive—say $3 trillion or so—but it might work. The conventional wisdom said that shareholders in the defunct banks would be told to shut up and accept a nickel for every dollar in worthless equity they hold. Some of us also fantasized that the boards of directors of the defunct banks would be removed and sent to undisclosed locations, where they would be subjected to enhanced interrogation techniques until they reveal what they did with the $400 billion in federal bucks they received last fall. Well, this was all wishful thinking. Timmy the tax cheat thinks he has a better idea. Geithner says he plans to give up to $1 trillion to private investors known to speculate in distressed assets — in common Wall Street parlance, these characters are referred to as ”vultures”– and then have them purchase the toxic assets from all the wounded […]
A few weeks ago, they packed up the famous monuments at old Yankee Stadium, loaded them into a large truck, and moved them to the new Yankee Stadium across the street. We’re not sure why it was necessary to use a truck to carry the monuments a few yards to their new resting place in the outfield of the new $1-billion ballpark. Perhaps the Steinbrenner dynasty was concerned that some evildoers might attempt to steal the crown jewels of the Yankee legacy. Well, they can rest easy, the monuments are safe. Unfortunately for them—and the rest of us—it’s two outs in the bottom of the ninth for everything these monuments ever stood for. And not just in the Bronx. The belated admission from the Yankees’ $275-million third baseman that yes, in fact, he partook in the festival of artificial enhancement that has plagued our national pastime for more than a decade is sickening but not shocking. Perhaps it is sickening because it is no longer shocking. In this winter of our discontent, it seems we have all but exhausted the supply of outrage in America. Let’s face it, it’s hard to get worked up about a juiced ballplayer when you have seen an entire economic system collapse in an orgy of uninhibited greed and then watched the perpetrators reward themselves with obscene bonuses financed by the taxpayers who bailed them out. The damage to baseball’s century-old record book can be repaired with a few dollops of whiteout. Fixing the banking system? Well, that will probably take trillions. Timmy Geithner will let us know as soon as he finishes correcting his latest income tax filing. A-Rod’s brainless decision a few years ago to risk a sure place in the pantheon of baseball greats for an extra 10 feet on his home-run swing and a bundle of cash also seems rather trivial compared to the amoral calculations of those who chose to throw out four hundred years of civilized law and torture individuals deemed to be enemy combatants in a borderless war without rules. Now batting clean-up in the good old U.S.A., shame, shame and more shame. There’s been a lot of talk about character lately, and a few minor adjustments have been made in the national moral compass to try to nudge things in the right direction. The bank frauds have been told to limit themselves to a measly $500,000 in compensation if they want billions more in federal largesse. The torturers have been told to stop torturing people while we […]
Governor Jennifer M. Granholm announced on Tuesday Michigan’s aggressive film production attraction efforts will create 5,993 new jobs in Michigan, including 4,066 new film, animation and programming jobs. Three companies, Wonderstruck Studios, Motown Motion Pictures and Stardock Systems, plan to invest more than $156 million in Detroit, Pontiac and Plymouth locations. “We are working hard to build a diversified economy and create good-paying jobs in Michigan,” Granholm said. “As a result of our aggressive film incentives we are not only bringing new investment to Michigan, we are laying the foundation for an industry that will support long-term job growth for our citizens.” The three projects announced today are: Wonderstruck Studios LLC – The new venture, to be known as Detroit Center Studios, will produce computer-generated (CG) visual effects and animated content. It plans to invest $85.9 million to create a digital pipeline, used to pull in numerous CG and digital animation projects, in downtown Detroit. The project is expected to create 700 new Michigan jobs, including 413 directly by the company. Based on the MEDC’s recommendation, the MEGA board today approved a state tax credit valued at $16.9 million over 12 years to help convince the company to expand in Michigan over competing sites in China and Korea. In addition, Infrastructure Development Film and Digital Media incentives totaling $11.7 million have been approved to help support the project. The city of Detroit is considering abatements to support the project. Motown Motion Pictures LLC – The new business venture, which will be both a film studio and a production services company, plans to invest approximately $70 million in a 600,000-square-foot development with nine sound stages in Pontiac. The project is expected to create 5,139 new jobs, including 3,600 directly by the company. Based on the Michigan Economic Development Corporation’s (MEDC) recommendation, the Michigan Economic Growth Authority board (MEGA) approved a state tax credit valued at $101 million over 12 years to help bring the project to Michigan. In addition, Infrastructure Development Film and Digital Media incentives totaling $12.9 million have been approved to help support the project. Job training assistance through the MEDC and Renaissance Zone designation by the city of Pontiac are also under consideration. Stardock Systems Inc. – The software developer and publisher will invest $900,000 to expand at their current location in Plymouth Township to allow for the implementation of a new PC game. The project will create 154 new jobs, including 53 directly by the company. Based on the MEDC’s recommendation, the MEGA board approved a state […]
Even under difficult economic conditions, Munich Airport remains a reliable engine for growth and employment. The three biggest companies at the airport – the Lufthansa Group, the Munich Airport operating company and its subsidiaries (FMG), and the airport security company (SGM) – alone have increased their total workforce by 2,800 to more than 18,300 since the summer of 2006. At the FMG annual press conference on February 3, airport CEO Dr. Michael Kerkloh said, “This shows that the Munich Airport job-generating engine has continued to move full speed ahead during the past two and a half years.” During the past five years nearly 5,000 people have found new jobs with the three biggest companies at Munich Airport. At present approximately 30,000 people are employed at the airport by more than 500 companies and public-sector bodies. This means that the total workforce has more than doubled since the airport opened in May 1992 at its location in the Erdinger Moos region. Moreover, the airport is the region’s biggest provider of vocational training opportunities, with more than 650 apprentices and trainees using tools and manning desks across the entire airport as they gain qualifications in the most diverse range of occupations imaginable. The impact on employment extends far beyond the airport fence: Statistically, every job at the airport generates up to two additional jobs outside the airport with suppliers, maintenance companies and other airport-related businesses. Just as significant are the airport’s so-called catalytic effects as an infrastructure facility, in other words its impact on the region and the economy: According to a new study by the European Center for Aviation Development in Darmstadt (ECAD), for instance, the excellent flight connections were an important or very important factor for 88 percent of the international companies in the airport region when selecting their location. Consequently, the surveyed companies stated that they welcome the planned capacity expansion in the form of a third runway, which 82 percent of the respondents believe is linked to a boost in regional competitiveness and economic development. Another example from the ECAD study: The purchasing power of the foreign guests arriving by air secures 44,000 jobs in the Munich Region alone. Especially in the difficult economic situation at present, Kerkloh sees the airport expansion as a key cornerstone for ensuring that the airport can remain a reliable partner in the employment market. “As the results of the study once again make very clear, the expansion of Munich Airport is not a matter of growth for growth’s sake. It benefits the […]
A whistleblower tells Congress that the Securities and Exchange Commission ignored his warnings about Bernie Madoff for nine years.
The Greensboro Economic Development Alliance just announced a significant expansion by ConvaTec, a global medical device manufacturer and long-time Greensboro employer. The company will expand its ostomy wafer line and attract a new ostomy pouch operation to its 211 American Avenue plant. ConvaTec plans to hire 30 machine operators and mechanics at an average wage of more than $44,000 per year. The company will convert warehouse space to manufacturing, and invest $19.55 million in machinery, equipment and building projects. “As a medical device company, ConvaTec is an important part of our local life sciences industry. Securing this expansion here in Greensboro should help keep the local facility viable and growing for the longer term,” stated Dan Lynch, president of Greensboro Economic Development Alliance. “By partnering with the local facility and showing local and state support for this project, we were able to convince the company to grow in Greensboro rather than overseas.” Formerly a division of Bristol-Myers Squibb Company, as of August 1, 2008, ConvaTec is owned by Cidron Healthcare Limited. The company focuses on four key business divisions – ostomy care, wound therapeutics, continence and critical care and infusion devices. ConvaTec has received the North Carolina “Star” Certification recognizing that the company is a leader in health and safety. Thomas Brugnoli, ConvaTec plant director and general manager of global manufacturing and supply chain, stated, “We are pleased to announce this expansion and appreciate the community support we received. We are proud of our success in Greensboro over the past 29 years and look forward to the implementation of this state-of-the-art project.” The Greensboro Economic Development Alliance (GEDA) worked closely with ConvaTec representatives throughout the site selection process. GEDA extends special thanks to the Greensboro City Council, the Guilford County Commissioners, the North Carolina Community College System, Duke Energy and the North Carolina Department of Commerce for all of their support for this expansion.
The California Enterprise Development Authority (CEDA) has praised the State Treasurer’s office for increasing the funding allocation from approximately $120 million to $150 million for the 2009 Industrial Development Bond (IDB) program. This annual IDB issuing volume, which funds projects for California manufacturers, is established by the State Treasurer and represents a $30-million, or a 25%, increase, over the IDB limit set in January 2008. Through the program’s small-issue IDBs, CEDA can access the increased funding limit of $150 million to finance projects statewide to support expansions of existing manufacturers as well as create much needed jobs in today’s economy. Manufacturers can use these tax-exempt, private-activity bonds, which are issued through state and local governmental agencies like CEDA, to assist in purchasing facilities and financing capital expenditures. Wayne Schell, president of the California Association for Local Economic Development and Chairman of the CEDA Board of Directors, praised the Treasurer’s Office for “gearing up to help small- to mid-sized manufacturers in California in a difficult lending environment. This shows the state is working proactively to continue its support of California manufacturers, despite the current economy. The IDB program is an excellent economic development financing tool.” Manufacturers interested in tapping these funds must be credit worthy and meet other state and federal requirements. However, according to Dan Bronfman, president of Growth Capital Associates, Inc., “In most cases, the approval process is worth the effort when you realize how much a business owner can save with an IDB versus a conventional loan. Since this program is aimed at helping mid-sized manufacturers, it supports a critical segment of California businesses.”
The tawdry saga of Gov. Rod Blagojevich concluded on schedule this week, when the Illinois State Senate unanimously ousted the helmet-haired governor after a brief trial in which Blagojevich was the most damning witness against himself, courtesy of wiretaps provided by a federal prosecutor. U.S. attorney Patrick Fitzgerald’s impulsive decision two months ago to publicly reveal Hot Rod’s efforts to peddle Barack Obama’s vacant U.S. Senate seat to the highest bidder provided a much-needed distraction — and yes, comic relief — to a shell-shocked nation battered by the worst economic calamity since the Great Depression. The country was so hungry for an opportunity to express its righteous indignation that it turned a blind eye to the rather odd legal logic employed by Fitzgerald, who didn’t bother to wait for the crime to be consummated before he dragged Blago into the public square for tarring and feathering. The stampede for justice was spontaneous, trampling any annoying doubts that might have arisen if we had stopped to consider the fact that the type of horse-trading at the center of this scandal too often is, behind closed doors and hidden from the public view, a sordid staple of American politics. Blago was stupid enough to do it with a federal prosecutor listening in. Let’s face it: we needed this. It was the perfect scandal for the perfect storm, perfectly tailored for our media-driven celebrity culture and exceedingly short attention span in an age of instant communications. Everyone played their roles perfectly in this national ritual of condemnation and redemption. Straight out of central casting came Fitzgerald as an over-caffeinated, 21st-century version of Eliot Ness, and Sen. Harry Reid as a stuffy blunderbuss of high moral dudgeon. The lead actors were accompanied by a bevy of celebrity cameos worthy of an Irwin Allen disaster movie. The only thing missing was O.J. and a cat. And let’s not forget the star of this eight-week miniseries, Hot Rod himself, who served up an unforgettable deep-dish pizza of lunacy and ensured himself a place in Chicago infamy right up there with Al Capone. Although there was never any doubt that Blago would be voted off the island after the transcripts of his profane machinations were read on national television by Fitzgerald, Illinois’ chief executive helpfully kept the story line moving by refusing to resign, provoking an impeachment and trial, which he then refused to attend until the final scene. The Blagojevich scandal is a gift that will keep on giving. The merits of the perfectly teased wisp […]
After yesterday’s employment massacre–more than 70,000 job cuts announced across various U.S. industries–the role of economic development and the importance of economic developers, have reached new heights. Before slumping my shoulders in response to the crush of job losses, I was emboldened by news out of North Carolina. EDGE4, a five-year economic development program designed to benefit Raleigh, Wake County and the Research Triangle region, announced an ambitious campaign that aims to raise $12 million for local business development and bring a unfathomable (in today’s world) 50,000 jobs to the Triangle. EDGE4 will host a breakfast tomorrow morning at the Raleigh Convention Center to announce the details of their stimulus program (for more information, contact Vernessa Roberts at 919.664.7080.) EDGE4 Co-Chairs Scott Custer of RBC Bank and Bill Johnson of Progress Energy will discuss the goals of the five-year plan and announce the campaign’s current status. As an American and as a journalist focused on the economy, I am curious to see what innovative ideas are being churned out of the Research Triangle. This announcement from North Carolina follows a promising plan that came out of Missouri on Friday. Governor Jay Nixon, in his first month at the helm, announced his Show-Me JOBS initiative, a bipartisan effort to move Missourians back into the workforce and support small-business growth. Gov. Nixon signed three executive orders, creating the Missouri Automotive Jobs Task Force, the Governor’s Economic Stimulus Coordination Council, and a $2-million pool of funds for small business loans. While corporate America and small town businesses alike are struggling, there has never been a more crucial time for our brightest economic minds to continue doing what they do best: creating opportunities.