Thursday, July 02, 2009
An ever-widening budget gap joined with intractable political paralysis to deliver California its biggest fiscal blow in decades on Thursday, when the state’s controller began printing i.o.u.’s in lieu of cash to pay taxpayers, vendors and local governments.
It was only the second time the state had adopted the emergency payment method since the Great Depression. The National Conference of State Legislatures had no record of any other state’s ever using them.
It was unclear whether the i.o.u’s, known as warrants, would be accepted by all of the banks in California, which were caught off guard by the move and seemed hesitant to entrust the state to repay the them — at an interest rate of 3.75 percent — in October, as promised.
The state controller, John Chiang, issued 28,742 warrants totaling $53.3 million. If state lawmakers fail to reach a budget agreement by the end of August, the amount would grow to $4.8 billion.
While the emergency move resulted from California’s unique combination of outsized budget gaps, unusual budget rules and a morass of financial obligations approved at the polls, the action was seen as a warning flag to other states that have failed to close their budgets this fiscal year because of the economic downturn. http://www.nytimes.com/2009/07/03/us/03calif.html?hp=&pagewanted=print
The Obama administration has begun a round- or more- of investigations of scores, if not hundreds of businesses to force compliance w/ immigration laws. The vehicle: examining employment eligibility documents.
The Obama administration launched investigations of hundreds of businesses around the country Wednesday as part of its strategy to focus immigration enforcement on the employers who hire illegal workers.
Immigration and Customs Enforcement has begun notifying businesses of plans to audit their I-9 forms - employment eligibility documents that employers fill out for every worker - the agency told members of Congress in an e-mail Wednesday.
Immigration officers served "Notices of Inspection" to 652 businesses, the Homeland Security Department said. By comparison, 503 such notices were issued to businesses last year, the agency said. Businesses were chosen for inspections based on leads and other investigative work, Immigration and Customs Enforcement said.
Employers are required to keep the I-9 forms and must check the authenticity of documents provided by the employee. The Homeland Security Department said it would not release the names or locations of the businesses that are being audited because of the ongoing investigations.
"ICE is committed to establishing a meaningful I-9 inspection program to promote compliance with the law," John Morton, Immigration and Customs Enforcement director, said in a statement. "This nationwide effort is a first step in ICE's longterm strategy to address and deter illegal employment." http://apnews.myway.com/article/20090701/D995U4N00.html
"Since 2002, the number of investment advisers--such as Madoff Securities--has increased by 50 percent. Yet enforcement resources have been flat or even reduced....As a result, only about 10% of investment advisers can expect to be examined every three years, and the goal of inspecting every adviser once every five years--laughably light oversight in its own right--has been abandoned."
Money for proper oversight was not allocated because the prevailing ideology regarding private investment firms--embraced by President Bill Clinton ever as fervently as President George W. Bush would later--was the gospel of radical financial deregulation, a practice that has landed us in the larger banking mess. As with the trading in unregulated derivatives, all of the operations of private investor groups, such as hedge funds, were thought not to require government supervision because these were conducted by professional financiers dealing with sophisticated investors who knew what they were doing. If the investment went south, it was on their dime and there would be no innocent victims.
As we saw with the collapse of AIG and now Madoff, that notion is false because private investment contracts can involve the resources of charitable organizations and pension funds and can end up costing the homes, savings and jobs of ordinary citizens who have no idea of which end of this arcane stuff is up.
When Levitt worked for Clinton as head of the SEC, he teamed up with Alan Greenspan, Robert Rubin and Lawrence Summers to destroy what remained of financial service industry regulation imposed by President Franklin Roosevelt in response to the Great Depression. In recent years Levitt, alone among that gang of four, has criticized that action and accepted some personal responsibility for the subsequent financial meltdown.
He was right again when he stated in his January article: "The Madoff scandal should be a wake-up call for more consistent, uniform, and rigorous regulation of investment advising...the final prod for a fundamental reform of the financial regulatory structure...." http://www.thenation.com/doc/20090713/scheer?rel=emailNation
Three years ago, U.S. Department of Agriculture employees determined that synthetic additives in organic baby formula violated federal standards and should be banned from a product carrying the federal organic label. Today the same additives, purported to boost brainpower and vision, can be found in 90 percent of organic baby formula.
The government's turnaround, from prohibition to permission, came after a USDA program manager was lobbied by the formula makers and overruled her staff. That decision and others by a handful of USDA employees, along with an advisory board's approval of a growing list of non-organic ingredients, have helped numerous companies win a coveted green-and-white "USDA Organic" seal on an array of products.
Grated organic cheese, for example, contains wood starch to prevent clumping. Organic beer can be made from non-organic hops. Organic mock duck contains a synthetic ingredient that gives it an authentic, stringy texture.
Relaxation of the federal standards, and an explosion of consumer demand, have helped push the organics market into a $23 billion-a-year business, the fastest growing segment of the food industry. Half of the country's adults say they buy organic food often or sometimes, according to a survey last year by the Harvard School of Public Health.
But the USDA program's shortcomings mean that consumers, who at times must pay twice as much for organic products, are not always getting what they expect: foods without pesticides and other chemicals, produced in a way that is gentle to the environment. http://www.washingtonpost.com/wp-dyn/content/article/2009/07/02/AR2009070203365_pf.html
The US and Russia are digging in for a fight over American plans for missile defence bases in eastern Europe in spite of efforts by both sides to create a positive atmosphere before next week’s summit between Barack Obama and Dmitry Medvedev.
A senior Russian official told the Financial Times on Thursday it was not enough for the US to say it was reviewing the missile defence project as the US president had already done. Washington had to go further and “show that it really can work together with Russia in the new [geopolitical] situation and the new threats we face”. http://www.ft.com/cms/s/0/23cf9eee-674c-11de-925f-00144feabdc0.html
When Sen. Arlen Specter joined the Democratic Party a few days ago he said his old party had "moved far to the right."
It's the truth. All the GOP has is the same low wage, no regulation economic platform and cultural warfare garbage that's like a gallon of milk out past its sell date.
We want universal healthcare? A climate change bill? We got to help the DSCC beat its goal before the April 30 fundraising deadline so they can deliver President Obama a filibuster proof 60 seat Democratic Senate majority in the 2010 elections. http://www.nytimes.com/2009/07/02/us/politics/02cong.html
July 1, 2009:
"We have 60 votes on paper," Senator Harry Reid, the majority leader, said Wednesday in an interview. "But we cannot bulldoze anybody; it doesn’t work that way. My caucus doesn’t allow it. And we have a very diverse group of senators philosophically. I am not this morning suddenly flexing my muscles." http://www.nytimes.com/2009/07/02/us/politics/02cong.html
