U.S. Economic/Financial News
S&P Keeps Sword of Damocles Hanging Over U.S. Cities
Aug. 11 (EIRNS)After downgrading 11,500 municipal bond offerings Aug. 9, Standard and Poor's yesterday said that it won't make further downgrades until it knows what kind of cuts Obama's super-committee in Congress comes up with. "We don't have enough information," said Steve Murphy, S&P's managing director for U.S. public finance, in an interview with Bloomberg yesterday. "The vote on the bill is due by Dec. 23, so we'll know what we need to know as far as what the impact on municipalities is going to be." Presumably, the message to cities from S&P will be, as it has been, to keep the austerity screws turning.
Jobless, Older Teens Are Becoming a Lost Generation
Aug. 10 (EIRNS)The Obama Administration's disregard for employment is about to create a lost generation. The unemployment amongst the 16-19 age group is now more than 24% across the country. But the figures are much higher in some states. Here's a look at the five highest teen unemployment rates in the country as of June:
* District of Columbia: 49%
* California: 34.6%
* Georgia: 34.6%
* Nevada: 34.3%
* Washington: 33.2%
Across the country, 16- to 19-year-olds are facing the end of the third Summer in a row of unemployment rates above 20%.
"When we have a time when the labor force is not growing normally, high teen unemployment provides the cleanest assessment of what is going on in the labor market," said Heidi Shierholz, a labor economist with the Economic Policy Institute, a liberal think tank. "What you see is, from '07 to '09it fell off a cliff, and it hasn't recovered since then." CNN Money pointed out on Aug. 10 that in July, only 58.1% of Americans age 16 and over were employeda significant drop from before the recession, and the lowest since 1983.
Economists have warned that if the trend continues, a generation of young people could face a bleak future in the workforce. Last May, experts noted in a report that cities with high Summer unemployment could experience a rise in street violence. Jack Wuest, executive director of the Alternative Schools Network, which commissioned the report, said: "We cannot continue to ignore the correlation between youth violence and teen employment. We know [that] if our teens are in school or at a job, they are not on the streets."
The report has raised concerns in cities such as Chicago, where nearly 700 children were hit by gunfire last year, 66 fatally.
Wall Street Raping Agencies, Greenies Target TVA, Nuclear
Aug. 11 (EIRNS)Following through on a threat it made two weeks ago, rating agency Standard and Poor's downgraded the credit rating of Franklin Roosevelt's TVA this week, from AAA to AA+. As they readily admitted, this had nothing to do with any increased liability to holders of TVA's debt. Even though TVA receives no Federal funding, S&P said there is a "perceived" increase in risk. Although TVA says it sees no threat immediately, there are big plans on its agenda.
When TVA's board meets next week, it is expected to approve completion of the unfinished Bellefonte nuclear power plant, which has been in mothballs for 30 years. It will cost more than $4 billion to do this. Could this be a reason to try to damage the TVA's credit rating? Trying to whip up "popular" hysteria, to prevent the board from proceeding, the greenie Southern Alliance for Clean Energy has been issuing reports, holding press conferences, and citing "experts," to try to derail Bellefonte.
Nuclear is not the only electric generating technology under attack. President Obama's Environmental Protection Agency (EPA) has promulgated new environmental regulations, limiting various effluents from coal-burning power plants, which, it is estimated, could soon force 81 gigawatts of old coal-burning generating capacity, or 8% of total existing electric capacity, out of service. Utilities cannot justify, or afford, spending hundreds of millions of dollars to retrofit 50-year-old plants to bring them into compliance. The North American Electric Reliability Council has warned that both the "pace and aggressiveness of these environmental regulations should be adjusted to reflect and consider the overall risk to the bulk power system."
More than two-thirds of all U.S. coal-burning plants are more than 30 years old, and only about 35% have pollution controls that comply with clean air regulations, with the rest being potential targets for shutdown. If not for the green fanatics, these old coal plants would have been replaced by nuclear plants, decades ago.
The TVA, which is now building its second new nuclear plant in five years, and will soon authorize a third, will be able to increase its capacity while retiring 18 old coal plants. But these new, stricter, irrational EPA regulations could cost TVA up to $5 billion to retrofit newer coal plants.
Jamie Galbraith Pronounces the System Dead, Irreparable
Aug. 8 (EIRNS)Economist James Galbraith, the son of the Kennedy-era economist and former ambassador to India, John Kenneth Galbraith, has finally come to the conclusion LaRouche enunciated on July 25, 2007. He told a conference in Denmark in May that the global financial system had an "irreversible disease," and that we had reached the "end of the illusion of a market place in the financial sphere."
Galbraith said: "The corruption and collapse of the rule of law, in the financial sphere, is basically irreparable. It's not just that restoring trust takes a long time. It's that under the new technological order in this field, it can not be done."
He urged everyone to read the Angelides report, the Levin-Coburn report, and the Barofsky reports, adding: "Fraud was not a bug in the systemit was a feature." He says of the euro crisis that "there obviously must be not only a new European architecture, but a new financial architecture that is not built around the banks as they exist today and the credit markets as they came to exist in the period before the crisis. Either that or the depression in Europe will simply go on and on. Until eventually the European Union falls apart."
But Galbraith clings to his Keynesianism, and instead of demanding a restoration of Glass-Steagall, calls only for criminal prosecutions of the bad guys and lots of government spending for the public good.