Here's an article from Jeff Jarvis about the future of journalism. Innovation will be on the way and he talks about how it is starting and what it's looking like:

Slices of a new journalism pie

The AP reports that Huffington Post is going to announce tomorrow the creation of a $1.75 million fund with various donors to pay for investigative reporting. First target: the economy.

The post continues...

The future of journalism is not about some single new-fangled product and company taking over from the old-fangled and monopolistic predecessor. News come from a broad ecosystem with many players adding in under many models for many reasons. News organizations will organize news in this diverse new framework, aggregating, curating, organizing. Laid-off journalists are starting blogs, alongside other bloggers. Some people will volunteer, podcasting their school-board meetings, just because they care. When we demand transparency from government as a default, data will become part of the news ecosystem we can all examine. Some of this will be supported by advertising, some by contributions from foundations, some by contributions from individuals, some by volunteer effort. And it will all add up to a new pie...Read the entire post here.

SENATOR SHERROD BROWN STAFF, AGENCY EXPERTS TO HOST YOUNGSTOWN ECONOMIC RECOVERY WORKSHOP

Residents Will Have Opportunity to Ask Questions; Learn about Economic Recovery Funding, Grants and Procurement Opportunities

WASHINGTON, D.C. –U.S. Sen. Sherrod Brown has arranged for federal agency experts to provide information, and answer questions concerning economic recovery grant funding and procurement opportunities at an event in Youngstown.  At the workshop and seminar, the agencies will discuss existing funding and procurement opportunities, as well as funding opportunities resulting from the economic recovery package.

Representatives of state, local, and municipal governments, nonprofit organizations, hospitals, research, and academic institutions, and small businesses are all welcome to attend.

The workshop in Youngstown is part of a greater statewide Economic Recovery Seminar Tour hosted by Sen. Brown’s Ohio offices.  Brown’s Recovery Seminars are free and open to the public. The full calendar of seminars can be found on Senator Brown’s economic recovery Web page.  

The event will take place:

                                      Youngstown

DATE:                      Wednesday, April 1, 2009

TIME:                        1:00 P.M.

 LOCATION:           Stambaugh Auditorium

           1000 Fifth Avenue

           Youngstown, OH 44504

Jack Spine writes "The UK government, which is becoming increasingly Orwellian, has said that it is [0]considering snooping on all social

 [0]NewYorkCountryLawyer writes "At a public hearing in California, Diebold's western region manager has admitted that the audit log system on current versions of Premier Election Solutions' (formerly Diebold's) electronic voting and tabulating systems — used in some 34 states across the nation — [1]fails to record the wholesale deletion of ballots, even when ballots are deleted on the same day as an election. An election system's audit logs are meant to record all activity during the system's actual counting of ballots, so that later examiners may determine, with certainty, whether any fraudulent or mistaken activity had occurred during the count. Diebold's software fails to do that, as has recently been discovered by Election Integrity advocates in Humboldt County, CA, and then confirmed by the CA Secretary of State. The flaws, built into the system for more than a decade, are in serious violation of federalvoting system certification standards."

EU Parliament moves to lower roaming charges for voice and data

http://www.unwiredview.com/

Posted: 10 Mar 2009 08:43 AM PDT

Have been stiffed with huge roaming bills on your mobile lately? Well, tough.

But there’s some really good news coming from European parliament today regarding various roaming fees within the European Union.

It’s Industry committee amended the 2007 roaming regulation that has already lowered voice roaming charges in EU to €0.46.

According to the new decision the price cap for voice calls should be further lowered to €0.40 for outgoing and to €0.16 (plus VAT) for incoming calls. Furthermore, operators cannot apply any initial talking minimum for the calls (e.g. call charge for the initial 30 seconds, even if you talked just 10) and must charge by the second.

The decision also imposes price caps on SMS messages and data roaming fees. For SMS it will be €0.11 plus VAT per message.

The data roaming is capped at the wholesale level, meaning that there’s a maximum  price the host operator can charge  roaming customer’s home network. The price cap is set at €0.50 per megabyte. The data roaming charges will have to be calculated per kylobite to avoid hidden costs.

The decision made roaming voice mail messages free while abroad.

There also should be a soft “cut-off limit” for roaming data services. When customer data roaming bill reaches up to 80%  of a certain limit agreed in advance, he will be informed  via e-mail or pop-up about this. When the limit is reached, he will have to undergo a certain procedure making sure that he really is ready to spend an additional amount on roaming fees.

Unfortunately, Industry Committee decision is not the final one and will still have to be approved by Parliament’s plenary session, after the negotiations with the European Comission.

The first reading of the regulation  is scheduled for April 21-24th. If approved, the roaming price caps should go into force from July 1, 2010 the latest

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East Asia's economic revenge

http://www.guardian.co.uk/commentisfree/cifamerica/2009/mar/09/usa-useconomy

By Dean Baker

In the matter of a few short weeks in the summer of 1997 the thriving countries of East Asia saw their economies overwhelmed by a financial tsunami. First Thailand and Indonesia, and then South Korea and Malaysia, saw investors panic and watched capital flee. Their currencies plummeted in value and their biggest companies wrestled with bankruptcy.

After being held up as models of successful development, these countries were suddenly denounced by the IMF and prominent economists everywhere for their lack of transparency, poor accounting standards, and crony capitalism. The IMF came into the region with a rescue plan that imposed harsh conditions. It demanded that these countries impose austerity plans and allow foreign investors to buy up their businesses at depressed stock prices.

The other part of the story was that the IMF insisted that these countries repay their debts. The only way that they could do this was to export like crazy. This route was opened to these countries by the plunge in the value of their currencies, most importantly against the dollar. The result was that goods from the region became very cheap to consumers in the United States, leading to a flood of imports to the United States.

There was a second route that the IMF could have followed for debt repayment. In recognition of the severity and extraordinary nature of the crisis, the IMF could have allowed for substantial write-downs of debt by the countries of the region. But it chose not to go this route.

Of course the IMF was not an independent actor. The IMF takes it lead from the United States. At the time, the folks calling the shots were the trio that Time Magazine dubbed the "Committee to Save the World (CSW)": Alan Greenspan, Robert Rubin, and Larry Summers.

The IMF rescue for East Asia had important ramifications for the rest of the developing world. The message that developing countries took away from the IMF's East Asia "rescue" was that they never wanted to be in a situation in which they were forced to turn to the IMF for help. The one way that they could prevent being forced to turn to the IMF was to accumulate massive amounts of foreign reserves as a defense. The only to accumulate foreign reserves is to run a balance of trade surplus.

This effort by developing countries to accumulate reserves meant that it was not only the countries of East Asia who were exporting like crazy, but rather the whole developing world (including China). Reversing the conventional view in economic theory, in the years after 1997 there was a massive flow of capital from the developing world to the wealthy countries, with the United States being the biggest recipient.

This capital flow from the developing world created the hot house in which the U.S. housing bubble could flourish. The jobs lost to imports created weakness in the labor market. Even though the 2001 recession officially ended in November of that year, the economy continued to shed jobs for nearly two more years, in part due to the loss of jobs to imports. Seeing this weakness in the labor market, the Fed continually pushed interest rates lower, reaching 1.0 percent in the summer of 2003.

Low interest rates in turn sustained the bubble far longer than otherwise would have been possible. The bubble itself helped to conceal many of the excesses and outright fraud perpetuated during these years. In a world where house prices are rising by more than 10 percent a year, and generating enormous profits for the firms in the real estate and banking sector, many sins can be concealed.

But bubbles inevitably burst. The bursting of the housing bubble will erase $8 trillion in housing wealth (more, if prices overshoot) and will leave many of the country's pre-eminent financial institutions bankrupt. More importantly, it is throwing the U.S. economy into its worst downturn since the Great Depression.

In history, we never get second chances, but it is still worth asking the question of what the world would look like if the CSW had taken the other path. Suppose Greenspan, Rubin, and Summers had instead arranged for the IMF to write down a large portion of the East Asian debt so that they were not forced to place the same priority on exports.

Furthermore, a less onerous rescue would not have created the same rush to accumulate reserves across the developing world, as did the bailout designed by the CSW. We can't know exactly how things might have turned out if the CSW taken this alternative path, but it's likely that Mr. Rubin's shares in Citigroup would be worth considerably more money today.

-- This article was published on March 9, 2009 by The Guardian Unlimited.

Feb 26, 2009

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Federal Stimulus Special Issue

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Posted: 16 Feb 2009 03:23 PM PST

I know next to nothing about the economy, stocks, and investments, but I do know a little bit about charts and graphs. The above area circles were prepared by someone at JP Morgan. I don't know, you might have heard of 'em. The circles are based on data from Bloomberg and meant to show the change in market value from 2007 to 2009. The problem here is that the creator sized circles by diameter instead of area, so the difference looks ginormous. I mean, the value change is significant but not that big.

Here's the revised version from a Big Picture reader, Rene Corda:

Now look at the original version again. Big difference, right?

Circles are 2-dimensional shapes. You can't use them and expect people to compare two circles by diameter, a 1-D metric. Sorry, JP Morgan person. You fail.

Check out the Big Picture for some more graphs of the same data.

[via Cringely | Thanks, Barry]

This e-newsletter contains a weekly roundup of the blog Beat the Press: Dean Baker's commentary on economic reporting. You can also subscribe to this blog via RSS feed.

February 17, 2009

Anti-Protectionist Misses Most Serious Protections

Washington Post columnist Anne Appelbaum used her column today to whine about the growth of protectionism. Remarkably, she managed to overlook some of the most obvious and costly forms of protectionism.

For example, she complained that German banks, which are partly owned by the government, are giving subsidized loans to German firms. However, she somehow failed to notice that the United States is giving $700 billion in government subsidized loans to its banks from the Treasury and trillions more through the Fed. These loans are supporting the jobs of highly paid bankers who might be unemployed if the situation was left to the market.

The government is also maintaining its protection for the pharmaceutical industry, by providing patent monopolies. It is a continuing thrust of trade policy to increase the extent of this protection in other countries.

Of course higher-paid workers continue to enjoy protection in the form of licensing and professional barriers that prevent them from having to compete directly with their counterparts in the developing world.

Economic models do not care about the class of the person enjoying protection. Protection for bankers, doctors, and lawyers affects the economy in the same way as protection for autoworkers. The graphs used to model the impact are exactly the same. The difference is that the cost of protection for highly paid workers is almost certainly much greater and the "free traders" never talk about it.

Comments

The Economic Gap That Economists Who Saw the Housing Bubble See

In an article discussing the concerns of many liberals that the stimulus package was not large enough, the Post describes the output gap as $2 trillion. Actually many economists have put the gap in GDP over the next two years at more than $2.5 trillion. In fact, this figure is consistent with the Congressional Budget Office's projections as well.

Comments

USA Today Unwittingly Tells Readers that Executive Compensation Provision Will Increase Efficiency in Banking

USA Today had an article telling readers that even small banks will be affected by the provision limiting executive salaries to $500k for banks that get federal bailout money.

The gist of the article is that this is a bad thing. It gives the example of Old National Bancorp CEO Robert Jones, who was paid $1.5 million in 2007 and will get up to $6 million if his job is terminated. The article goes on to describe Old National Bancorp as a "tiny bank," with assets of just $8 billion.

Old National Bancorp is indeed a small bank compared with giants like Citigroup or J.P. Morgan. If the pay and golden parachutes of the top executives at these institutions were the same proportion of their assets, their top executives would be earning more than $300 million a year and could expect a golden parachute of more than $1 billion if they were terminated.

If the pay caps discourage Old National Bancorp and other small banks with overpaid executives from seeking capital from the federal government, then it will impede their growth. This will allow banks with more market oriented compensation packages for top executives to grow at the expense of the banks with highly paid executives.

This would be an unexpected dividend from Senator Dodd's pay provision.

Comments

February 14, 2009

Post Exaggerates the Size of the Stimulus Bill

Okay folks, this is 2-year stimulus, not a 1-year package. (Actually, as the Republicans were fond of pointing out, much of the spending will not take place until 2011, year 3 of the package.) That means that there is a word to describe the Post's claim that the package is more than 5 percent of GDP: "wrong."

Of course, if the Post was interested in accurate reporting it might also have noticed that the package saved the government $140 billion by reversing a change in the tax code put in place by Treasury Secretary Henry Paulson that allowed banks to write off the bad debts of banks that they acquire. That would substantially reduce the long-term cost of the stimulus.

If might also have been helpful to put some of the items highlighted by Republicans in context so that their importance would be clearer to readers. The $198 million for Filipino World War II veterans comes to 0.024 percent of the stimulus package. The $50 million for the National Endowment of the Arts is 0.006 percent and the $25 million for the Smithsonian is equal to 0.003 percent of the stimulus.

Comments

Has the Post Ever Had a Headline About the "Whoppingly" Inefficient Health Care System?

Probably not, since it has no interest in health care reform that could jeopardize the incomes of the insurance industry, the health care industry and highly paid medical professionals. Therefore, the Post would never use a word like "whopping" or its derivatives in a headline about the health care system.

On the other hand, since it the editors have no qualms about using the news section to push its crusade for balanced budgets, it has no qualms about using "whopping" in a headline for an article about the budget deficit.

In addition to the unusual adjectival choice for a news headline, it's also worth noting that the other half of the headline is wrong. The stimulus did not grow, it shrank. President Obama originally proposed a bill that was just under $800 billion. He got a bill that was less than $800 billion, including a $70 billion fix to the Alternative Minimum Tax that everyone had anticipated whether or not there was a stimulus. This means that the final bill had less real stimulus than the original one.

When it comes to providing information, the first paragraph does no better than the headline. What does it mean to tell readers: "But one thing is certain: It will blast another big hole in an already tattered federal budget."

What is "big?" What is a "hole in the budget?" The only information readers get from this paragraph is that the Post is unhappy with the size of the deficit. That's fine for the opinion page, but it doesn't belong in the news section.

To round out its analysis, the Post tells us, among things, that among the issues that President Obama wants to tackle is "assuring that Social Security will survive for future generations." It would be interesting to learn whether President Obama used this phrase or whether it originated with the Post, because it makes as much sense as saying that he will ensure that Ohio survives for future generations. It's theoretically possible that both Social Security and the state of Ohio will cease to exist, but on what basis would any reasonable person expect either event.

The article concludes by presenting analysis from two budget hawks to balance out the piece.

Comments

Reporters Covering the Financial Crisis Should Listen to Simon Johnson

Simon Johnson is the former chief economist of the International Monetary Fund. I don't know him personally, but from his writings and his past positions, I would guess him to be very much a centrist economist. He presented a very clear and carefully thought account of the nation's financial crisis on Bill Moyers' Journal last night. This is well worth everyone's time.

Comments

February 13, 2009

Differences Between Japan and the United States

The NYT seeks to find lessons for the United States in Japan's efforts to recover from the collapse of its stock and housing bubbles in 1990. It argues that Japan's economy did not finally recover until it cleaned up the books of its major banks, which led several to be nationalized or go out of business.

While there are undoubtedly many lessons for the United States from the Japanese experience, it is important to note that banks play a much less central role in providing capital in the U.S. economy. For example, most mortgages are financed through securitized mortgage pools. The same is true of car loans and other types of consumer debt. Large corporations typically obtain short-term capital by selling commercial paper on the market.

The Fed and Treasury have taken steps to ensure that this route of obtaining capital is open, which means that the problems of the banks will have less consequence for the U.S. economy than was the case for Japan. While it would still be desirable to repair the banking system as quickly as possible, the need is not as urgent as this article implies.

Comments

Nicolas Retsinas, Housing Bubble Denier, Is USA Today Expert On the Housing Market

When USA Today wanted to speak to a housing market expert on the rise in the housing vacancy rate, it turned to Nicolas Retsinas, the head of Harvard University's Joint Center for Housing Studies. This was an interesting choice since Mr. Retsinas is perhaps best known as one of the people who denied the existence of a housing bubble in 2003 and encouraged low and moderate income families to buy homes.

Some of the assertions that can be found in this publications are:

"More importantly, it takes concentrated job losses - the likes of which have not been seen during this business cycle - to drive down home prices;" and

"Moreover, when house prices deflate, they do so slowly."

Comments

The Banks Need Capital: But Are Their Shareholders Wiped Out?

Somehow this question never appears in an otherwise informative article that considers the possibility that the banking system is insolvent. The article concludes by suggesting that the most efficient solution may require that government take possession of the banks' bad assets.

While this is true, the key question is whether this is done after the shareholders are wiped out, which would effectively be allowing the market to run its course, or whether the government buys the bad assets at above market prices. This is effectively a huge taxpayer subsidy to the banks' shareholders and their managers. This question is never discussed in the article.

Comments

NPR Tells Us That the Question is Whether Taxpayers Pick Up All of Investors' Losses or Just Some of Them

Unfortunately, I am not kidding. In an incredibly poorly informed piece on the foreclosure crisis (they apparently still haven't heard of the housing bubble), NPR concluded with a quote telling listeners that, "We're really just trying to figure out who bears the loss. Do we want the government to bear it all, or do we want some of it to be pushed onto investors?"

Of course, that's the question. Investors can't be expected to know what they are doing, the little boys and girls need the government to help them out. After all, that is why we have the government. No one would want to leave wealthy investors' fate to the market. The only question is whether we bail them out completely, or maybe force them to suffer some loss due to their bad investments.

It's great that NPR framed the range of views that it will present on this issue so clearly. Of course there are people who think that the government should focus on helping homeowners rather than wealthy investors who are too dumb to know how to invest their money.

Some of us have advocated just temporarily changing the rules so that homeowners facing foreclosure would have the option to remain in their homes as renters for long periods of time. This would both give homeowners security in their home and give the banks real incentive to negotiate terms that allow homeowners to stay in their house as owners, since banks will not want to become landlords.

This proposal has the advantage of requiring no tax dollars, no new bureaucracy, and could take full effect the day that Congress passes it. But, it would not help the investors make up their losses which NPR tells is the real purpose of government, so you won't hear about it on Morning Edition.

Comments

February 12, 2009

How Does the NYT Know that Exxon Mobil Had Been Skeptical on Global Warming?

If you're the world's largest oil company, it probably makes more sense to tell the public that you don't believe in global warming than to say that you intend to obstruct preventative measures in order to protect your profits, even if means destroying the planet. So, when the NYT tells readers that Exxon Mobil "had long been skeptical of global warming," how does it know that this is true?

Comments

Does Morgan Stanley Keep a Separate Account for Its Bailout Funds?

That's the question that the NYT should have asked when Morgan Stanley's spokesperson told reporters that the money for bonuses would come from operating expenses rather than the bailout money. Since money is fungible, this comment doesn't make any sense.

Comments

NPR Conceals the Bankruptcy of Banks

NPR had a piece on Morning Edition discussing the problems of the first round of the TARP. The piece concealed the fact that many, if not most, of the major banks are effectively bankrupt.

This fact would have answered riddles like their reluctance to make new loans. Given the large volume of bad loans that they will have to write down in the months ahead, it is not surprising that the banks would be hesitant to make new loans.

In a discussion of policies being proposed, WSJ economics reporter David Wessel told listeners that some people want to take over the banks and run them like the Agriculture department. Actually, the motive for taking over the banks is that they are bankrupt. The better analogy would have been to say that people want the government to take over the banks and run them like IndyMac.

[The NYT is no better].

Comments

February 11, 2009

Saving Has Increased More Than It Seems

David Leonhardt notes the rise in the household saving rate that is one of the main causes of the current downturn. While he notes the excessive flow of credit prior to the downturn, it would have been helpful to describe the mechanism more clearly.

The Federal Reserve Board either could not see, or chose to ignore, an $8 trillion housing bubble. Economists know that people spend based in part on their housing wealth. The usual estimates of the wealth effect are between 5-7 cents on the dollar. This means that the bubble led to $400 billion to $560 billion a year in additional annual consumption. This was not the result of spendthrift consumers, it was the predicted response to the bubble.

The graph that Leonhardt includes actually understates the increase in the saving rate in recent months. There was an extraordinary rise in income relative to output measures of GDP in 2006 and 2007. This was almost certainly attributable to capital gains in the stock market showing up in the income measure. If we assume that the output side measure of GDP is more accurate than the input side (a generally held view among economists), then income and the savings rate were actually lower in 2007 and the first half of this year than saving data show. This means that the savings rate has jumped by a larger amount in the last six months than the standard show.

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Comments

February 10, 2009

Are Differences in Views on Bank Accountability Just a Question of "Values?"

The NYT contrasted a "populist" demand for transparency on bank finances and what they do with government money with regulators' concerns as a "clash of values." It describes the regulators as being "primarily concerned with preserving the overall stability and liquidity of the financial system."

While regulators are no doubt concerned about the stability of the banking system, it is also possible that they are concerned about protecting the interests of bank shareholders and top executives. There are solutions that would protect the stability and the liquidity of the banking system that would displace most of the top management of insolvent banks. The regulators insistence on secrecy obstruct this path.

Comments

February 09, 2009

Mara Liasson Comes Out for Cutting Social Security and Medicare

During President Obama's press conference she asked him how we can get Republican support on entitlement reform which will require painful sacrifice. Apparently, Ms. Liasson wants painful cuts in Medicare and/or Social Security, but there is no reason that such cuts are necessary.

According to the Congressional Budget Office, Social Security is fully funded through the year 2049 with no changes whatsoever. Medicare is projected to face serious shortfalls, but only because private sector health care costs are projected to grow explosively over the next four decades. Since Medicare pays for a large portion of private sector health care costs, the projected explosion in costs will have a devastating impact on Medicare and the budget as a whole.

If the United States can fix its health care system to bring costs more in line with health care costs in other wealthy countries (all of whom have longer life expectancies), then there is no reason for painful cuts in Medicare. The problem is the power of interest groups like the insurance industry and the pharmaceutical industry, not the generosity of Medicare.

Comments

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C.

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OK, so we saw CreditLoan's representation of Obama's stimulus package. Here's Washington Post's take on the breakdown with a combination of bar charts, bubbles, and a stacked graph chart for time - and the numbers seem to all add up correctly. I don't like the bubbles that look like dangling ornaments though. CreditLoan's is more readable, but maybe that has to do with the Post's version being made for print and the other made for online. What do you think - which version works best for you?

[via The Big Picture]