Category : Economy

CSM–Pakistan's growing civilian-military showdown

Pakistan’s civilian government fired its Defense Secretary Wednesday in a rare show of defiance against the country’s powerful Army, which had earlier publicly rebuked Prime Minister Yusuf Raza Gilani and ignited speculation the government may fall.

Retired Lt. Gen. Naeem Khalid Lodhi, a senior bureaucrat seen as close to the Army, was dismissed by the government for “gross misconduct and illegal action.” He was replaced by a bureaucrat close to the prime minister.

It’s not yet clear whether Pakistan’s powerful Army will be sufficiently moved to launch a coup and directly rule the country as it has done for approximately half of Pakistan’s 65 year history. But if Mr. Gilani’s defiance pays off, that could indicate a boost for the country’s democratic institutions.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Afghanistan, Asia, Defense, National Security, Military, Economy, Foreign Relations, India, Law & Legal Issues, Pakistan, Politics in General, The U.S. Government

(USA Today) Just 1% of patients drive U.S. health care spending

Just 1% of Americans accounted for 22% of health care costs in 2009, according to a federal report released Wednesday.

That’s about $90,000 per person, according to the Agency for Healthcare Research and Quality. U.S. residents spent $1.26 trillion that year on health care.

Five percent accounted for 50% of health care costs, about $36,000 each, the report said.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Economy, Health & Medicine, Medicare, The National Deficit, The U.S. Government

(BBC) Twitter unhappy about Google's social search changes

Twitter has complained about changes made by Google to integrate its social network Google+ into search results.

The new feature, called Search plus Your World, will automatically push results from Google+ up the search rankings.

Tweeting on the news, Twitter’s lawyer Alex Macgillivray described it as a “bad day for the internet”.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, --Social Networking, Blogging & the Internet, Corporations/Corporate Life, Economy, Science & Technology

In a unanimous Decision, the Supreme Court seeks to protect Churches Freedom

In what may be its most significant religious liberty decision in two decades, the Supreme Court on Wednesday for the first time recognized a “ministerial exception” to employment discrimination laws, saying that churches and other religious groups must be free to choose and dismiss their leaders without government interference.

“The interest of society in the enforcement of employment discrimination statutes is undoubtedly important,” Chief Justice John G. Roberts Jr. wrote in a decision that was surprising in both its sweep and its unanimity. “But so, too, is the interest of religious groups in choosing who will preach their beliefs, teach their faith and carry out their mission.”

The decision gave only limited guidance about how courts should decide who counts as a minister, saying the court was “reluctant to adopt a rigid formula.” Two concurring opinions offered contrasting proposals.

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Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, Economy, Labor/Labor Unions/Labor Market, Law & Legal Issues, Parish Ministry, Religion & Culture

(NY Times on the Republican Primary) In South Carolina, Challenges Await on Ideology and Faith

A Republican Party whose more energetic precincts have been gripped throughout the Obama presidency by a desire to expel moderates and upend the establishment will have put itself in the hands of a candidate who, more than anyone in the race, comes out of a moderate, establishment Republican tradition.

But to get there ”” or get there without a protracted battle ”” he will have to fend off efforts by his rivals in South Carolina to emerge as the singular anti-Romney candidate.

With little left to lose, Newt Gingrich and Gov. Rick Perry of Texas are already assailing him as a heartless job killer in South Carolina, a state hit far harder by the economic downturn than Iowa and New Hampshire were.

But just fending off that attack may not be enough. He is also heading smack into an issue that has followed him through his national political career: his Mormon faith and the suspicion many evangelical Christians have of it.

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Posted in * Culture-Watch, * Economics, Politics, * South Carolina, Economy, Labor/Labor Unions/Labor Market, Politics in General, Rural/Town Life, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Urban/City Life and Issues

Consumers spend more on digital immersion than staying warm

PC support company iYogi today released these survey results showing consumers spend more on staying connected to the Internet than on staying warm.

Not surprisingly, mobile phones chew up a large and growing chunk of the average household’s disposable income. Some 63% of American households spend 35% more on technology bills than utility bills, according to an in-depth survey of 1,100 adults.

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Posted in * Culture-Watch, * Economics, Politics, Blogging & the Internet, Economy, Personal Finance, Science & Technology

(Der Spiegel) Investors Pay to Lend Germany Money

Investors in Europe are so worried about the euro crisis and so desperate to find a safe haven for their cash that they decided to forego an interest rate, and even paid a premium, for the privilege of lending Germany money on Monday.

The auction of six-month German government bills on Monday produced a negative interest rate. Even the Federal Finance Agency, which manages Germany’s debt, was astonished. “That has never happened before,” said a spokesman.

Read it all.

Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Credit Markets, Economy, Europe, Germany, The Banking System/Sector

(Reuters) Mafia turns into 'Italy's No.1 bank' as crisis bites: Report

Organised crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest “bank” and squeezing the life out of thousands of small firms, according to a report on Tuesday.

Extortionate lending by criminal groups had become a “national emergency”, said the report by anti-crime group SOS Impresa.

Read it all.

Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Economy, Europe, Italy, Politics in General, The Banking System/Sector

(WSJ) Unemployment Scars Likely to Last for Years

The U.S. job market is showing signs of a sustained recovery. But the country’s prolonged struggle with unemployment will leave scars that are likely to remain for years, if not generations.

The latest labor-market snapshot, out Friday, gave cause for continued, if tepid, optimism. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009.

But economists gathered here [in Chicago] for the American Economic Association’s annual convention took a longer and generally dimmer view. Even if recent progress continues, the recession already has had a lasting effect on a generation of workers. Worse, the crisis has laid bare problems in the U.S. labor market that won’t quickly recover when the economy eventually rebounds. And the longer that unemployment remains high, the greater the risk that it will create structural problems that will endure.

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Posted in * Economics, Politics, Economy, Labor/Labor Unions/Labor Market

A Great Video Piece on Portland, Maine's Communal Efforts to Help Creatively in Tough Times

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Posted in * Culture-Watch, * Economics, Politics, Economy, Labor/Labor Unions/Labor Market, Pastoral Theology, Theology, Urban/City Life and Issues

Notable and Quotable

Once again, we come to the Holiday Season, a deeply religious time that each of us observes, in his own way, by going to the mall of his choice.

— Dave Barry

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Christmas, Church Year / Liturgical Seasons, Consumer/consumer spending, Economy, Religion & Culture

Ireland's Data Protection Commissioner Tells Facebook to improve its privacy

Facebook users will enjoy tighter privacy controls after the social networking giant was ordered by the Republic of Ireland’s Data Protection Commissioner to change how it handles personal data.

The company was issued with a raft of recommendations including deleting personal information sooner and allowing users better control on the use of data.

The Office of the Data Protection Commissioner yesterday published the outcome of its audit of Facebook Ireland, which was carried out over the last three months.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, --Social Networking, Blogging & the Internet, Corporations/Corporate Life, Economy, England / UK, Ireland, Law & Legal Issues, Science & Technology

(WSJ) Lawmakers Reach Payroll-Tax Deal

Congressional leaders reached an agreement Thursday to temporarily extend a payroll-tax cut by two months and begin negotiations on a yearlong extension, aides said.

he agreement could end a political stalemate over the payroll-tax cut, which lowered Social Security taxes for 160 million Americans in 2011. Under the tentative agreement, the House will vote again on a two-month extension and the Senate will prepare to negotiate for an extension that will run through 2012.

Aides said House Speaker John Boehner (R, Ohio) has agreed to hold a new vote Friday on extending the tax cut, bowing to increasing pressure to end an impasse that threatened to leave workers with a tax increase next year.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Economy, Health & Medicine, House of Representatives, Labor/Labor Unions/Labor Market, Medicare, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government

(USA Today) Just say no to Christmas?

Susan Lee, a divorced mother of three in New York City, is taking a drastic step this year. “No Christmas for me,” she says. “No gifts, no turkey, no tree, no kidding.”

Lee, 41, a marketing consultant, says she needs a break from the stress and spending that are integral parts of the holiday. Her kids will celebrate a traditional Christmas with their dad, but she’s ignoring all the rituals.
“I start dreading Christmas from the time the decorations go up in the stores,” she says. “It stopped being fun for me, so I’ll find out this year if I can do without it altogether. I think it will be a relief. It already is.”

Read it all.

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Christmas, Church Year / Liturgical Seasons, Consumer/consumer spending, Corporations/Corporate Life, Economy, Personal Finance, Religion & Culture

([London] Times) Bishop of London Richard Chartres–Man cannot live by economics alone

In a time of austerity it is salutary once more to ask: what shall it profit a man if he shall gain the whole world and lose his own soul? This is not to argue for a “Bible-says-it-all politics”, which has been out of fashion since our disastrous flirtation with it in the English Civil War of the 17th century. It is simply to recognise that all politics rest on assumptions; myths properly understood, not as fairytales but as archetypal stories about the human condition.

Both our economic activity and our political life must have ground beneath them. Human beings are not just blind globs of idling protoplasm but creatures with a name who live in a world of symbols and of dreams, not merely of matter.

If we are not only to survive this period of austerity, but even to learn to flourish in it, then we shall have to relearn a more adequate story of what is precious about human life. The story of the birth of the infant king in a poor family is a good starting place.

Read it all (requires subscription).

Posted in * Anglican - Episcopal, * Culture-Watch, * Economics, Politics, Anglican Provinces, Anthropology, Church of England (CoE), CoE Bishops, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Religion & Culture, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology

(Globe and Mail) Neil Reynolds–The Anglosphere yet reigns Supreme

If Rome could survive Caligula and Nero, says American geographer Joel Kotkin, the United States can probably survive George W. Bush and Barack Obama. Indeed, he says, the U.S. and its “anglosphere” allies ”“ Britain, Canada, Australia and New Zealand ”“ will continue to be the primary economic, scientific and cultural force in global commerce well into the 21st century. The economic and political crises of the moment will pass. For the English-speaking world, the best is yet to be.

Author of the 2010 best-selling The Next Hundred Million: America in 2050, Mr. Kotkin is singularly optimistic in his latest assessment of a world in which the anglosphere appears to be in truculent decline. The U.S. and Britain, after all, are experiencing serious crises of confidence. Now, in The New World Order, a study published in November by the London-based Legatum Institute, Mr. Kotkin and nine academic associates conclude that the anglosphere will remain the ascendant player on the world stage for a long time to come….

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Australia / NZ, Books, Canada, Economy, England / UK, History, Politics in General

(USA Today Editorial) Payroll tax gridlock could actually be a plus

…unlike the debt-ceiling drama and the destructive impasse over a grand bargain to rein in the spiraling national debt, a stalemate on the payroll tax could be good for Social Security, good for the deficit, and good for disproving the conviction that “temporary” tax cuts must never be allowed to expire.

Let us explain.

As we’ve pointed out previously, the 2-percentage-point cut in the payroll tax (from 6.2% to 4.2%) might give a short-term boost to the economy, but it contributes to Social Security’s long-term insolvency at a time when the retirement program is already paying out more in benefits than it is collecting in taxes. A one-year extension would drive up next year’s federal deficit by more than $100 billion.
The payroll tax issue also raises the question of whether there’s any such thing as a temporary tax cut. At the end of next year, the unaffordable Bush tax cuts are set to expire. Extending the payroll tax cut would set a precedent and give ammunition to those who want another extension of the Bush cuts, adding as much as $5 trillion to deficits over the coming decade.

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Posted in * Economics, Politics, Budget, Consumer/consumer spending, Economy, House of Representatives, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, Senate, Social Security, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Mystery donors paying off layaway accounts for needy

Anonymous “layaway angels” are rescuing Christmas for needy families across the nation.

Mystery donors are visiting stores and paying the balance on accounts that allow customers to pay for purchases over several months. Some donors ask the store to apply the money to children’s toys or clothing; they aren’t told recipients’ names. Nor do recipients learn the identities of the donors.

More than 15 layaway accounts totaling almost $4,000 have been paid by strangers at a Kmart in Lafayette, Ind., says store manager Vic Sutherland. “It’s pretty awesome,” he says. “With the economy the way it is, you wouldn’t expect it.”

Fantastic stuff–read it all.

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Charities/Non-Profit Organizations, Economy, Parish Ministry, Stewardship, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Terry Mattingly on the Baltimore Sun covering the way many American Christmases are Lived

While reading this thing, I kept waiting for the moment when the “C” word would or would not be used, in place of the safe, secular “holidays” incantation.

The premise for this story is that it’s hard to get American men to do their duties this time of year, which means heading to the nearest shopping mall and doing their part to keep their marriages and/or families united and the nation’s economy intact. Something must be done.

The answer is to combine alcohol, cigars, grilled fat, credit cards and jewelry….

Read it all.

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Christmas, Church Year / Liturgical Seasons, Consumer/consumer spending, Corporations/Corporate Life, Economy, Men, Personal Finance, Religion & Culture

(WSJ) Spying on Your Buying

Merchandisers already track our cyber choices (efficiently, following the clicks on our keyboards) and our in-store decisions (inefficiently, with glum market researchers in every aisle). Now high-tech acuity is going offline. Soon, in-store sensors and motion trackers will watch your footsteps, see what your hands do, know when you hesitate””and when you don’t.

The obvious initial response to this is outrage. The right one is delight. This technology, alert to body as well as brain, wants to respond to our behavior, not change it. And it could have amazing applications.

You’ve heard of Kinect, the Microsoft motion-sensing device that enhanced the Xbox. And you’ve heard of Google Analytics, the dashboard for website usage statistics. Shopper Tracker””launched recently by the scrappy Argentine start-up Agile Route””is a combination of both. Its spatial recognition software, plus heat sensors and proprietary algorithms, analyze customer movements. It can show which store shelves are most popular, which items are most touched, which taken and then put back.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Psychology, Science & Technology

(Washington Post) Barry Ritholtz–The systemic risk revealed by MF Global’s collapse

Watching the MF Global saga unfold, I had to wonder: “How was it possible for a broker dealer to tap segregated client monies to speculate in risky assets and lose billions?”

MF Global’s story, as you will soon understand it, raises serious concerns for any investor. That the activities that led to MF Global’s collapse were possibly legal (!) is stunning. The details are complex, but follow them through to the end and you will see all of the problems of our system ”” political corruption, excess leverage, focus on short-term profit at the expense of survival ”” in one sordid affair.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Economy, Ethics / Moral Theology, Law & Legal Issues, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Theology

UK Chief Rabbi Jonathan Sacks –Has Europe lost its soul to the markets?

As the political leaders of Europe come together to save the euro and European Union itself, I believe the time has come for religious leaders to do likewise.

The task ahead of us is not between Jews and Catholics, or even Jews and Christians, but between Jews and Christians on the one hand and the increasingly, even aggressively secularising forces at work in Europe today on the other, challenging and even ridiculing our faith.

When a civilisation loses its faith, it loses its future. When it recovers its faith, it recovers its future. For the sake of our children, and their children not yet born, we ”” Jews and Christians, side by side ”” must renew our faith and its prophetic voice. We must help Europe to recover its soul.

The idea of religious leaders saving the euro and the EU sounds absurd. What has religion to do with economics, or spirituality with financial institutions? The answer is that the market economy has religious roots. It emerged in a Europe saturated with Judeo-Christian values. In the Hebrew Bible, for instance, material prosperity is a divine blessing. Poverty crushes the human spirit as well as the body, and its alleviation is a sacred task.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, * Religion News & Commentary, --European Sovereign Debt Crisis of 2010, Economy, Euro, Europe, History, Judaism, Other Faiths, Religion & Culture, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Gallup–U.S. Underemployment in Mid-December Similar to a Year Ago

Underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 18.4% in mid-December, as measured by Gallup without seasonal adjustment. This is up slightly from 18.1% at the end of November and similar to the 18.5% of a year ago.

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Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Corporations/Corporate Life, Economy, Labor/Labor Unions/Labor Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

(ENS) Episcopal clergy arrested after entering Trinity Church property

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Posted in * Anglican - Episcopal, * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, Economy, Episcopal Church (TEC), Law & Legal Issues, Parish Ministry, Politics in General, Stock Market, TEC Parishes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, Urban/City Life and Issues

Jordan Ballor–How Christians Ought to "Occupy" Wall Street (and All Streets)

What this means is that there are Christians who already occupy Wall Street every day in their occupations as businessmen and women, bankers and investors, traders and executives, secretaries and receptionists, janitors and security guards. The church’s responsibility to these “occupiers” is to provide them with the moral and spiritual formation necessary to be faithful followers of Christ every day in their productive service to others.

A group of business and ministry leaders in the UK articulated this in a recent letter to The Times of London, in which they observed, “Many Christians today work within mainstream business, attempting to be ‘salt and light’. Others run organizations . . . that are committed to using business and finance to bring social benefits, raise living standards and create jobs.” Through these kinds of efforts such business leaders “are part of the broader effort of the Church to reform capitalism by going to the root of the problem: the human heart.”

Christians therefore must occupy the world in their occupations, doing all their work as Christians, whatever it is, “whether in word or deed,” as the Apostle Paul instructs, “in the name of the Lord Jesus, giving thanks to God the Father through him” (Col. 3:17 NIV). In this way the church finds its most significant and transformative cultural engagement through its affirmation of the daily work of Christians who already occupy Wall Street (and all streets).

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Posted in * Culture-Watch, * Economics, Politics, Economy, Ethics / Moral Theology, Labor/Labor Unions/Labor Market, Politics in General, Religion & Culture, Stock Market, The Banking System/Sector, Theology

(World) A record number of churches are likely facing foreclosure

Church foreclosures are at an all-time high. Since 2008 more than 200 churches and other religious organizations have faced foreclosure, according to real estate services firm CoStar Group. In the decade before 2008, church foreclosures were rare, averaging less than 10 per year.

Tim Trainor, a spokesman for CoStar, said 2011 is so far the worst yet, including the “highest dollar volume” ever in the second quarter of 2011, when 20 properties totaling more than $27 million went into foreclosure.

These foreclosures are likely just the tip of the iceberg. No one really knows how many churches not officially in foreclosure are on the brink. Take, for example, The Church at South Las Vegas. The church started in 2001 by Pastor Benny Perez now has more than 4,000 in regular Sunday morning attendance. But the church also has a $53,000 per month mortgage payment, and it can’t sell any of its real estate because that real estate is now worth at least $5 million less than what the church paid for it.

Read it all.

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, Economy, Housing/Real Estate Market, Parish Ministry, Religion & Culture, Stewardship, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

The Bishop of Huntingdon's Sermon at the Huntingdonshire District Council Christmas Carol Service

…the principle I have just tried to set out for you, of giving ourselves to and for others, is not just about religion. There’s been a lot of talk about building the Big Society this year, and unfortunately the very phrase has become something of a political football, and been prejudiced too by the need to make such cuts. The fact remains, though, that 2012 has to be the year when we start to work together for the common good, or stay stuck in the gloom. Anything that is going to happen for good is likely to be bottom-up not top-down.

If we are going to do that we are going to need to engage together, and in three ways. To make them easy to remember, all three things begin with P. We are going to need to get our hands dirty and share in growing new provision for our communities. Christ came into the same regular world that you and I live in, and got stuck in. Whether it is care for the isolated and vulnerable, places for young people to hang out safely, transport for rural places, lunch clubs or language classes, there are a whole raft of practical bits of provision that we need to hang onto and if necessary recreate together. We have a great tradition of community action together ”“ and the churches have by and large played their part well ”“ but did you know that nationally 60% of men born in 1946 were members of local organisations when they were in their 30s, but by 1970 that figure had dropped to just 8%? 2012 is surely the year to reverse that trend….Together we can get things done.

Read it all.

Posted in * Anglican - Episcopal, * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, * International News & Commentary, Anglican Provinces, Church of England (CoE), CoE Bishops, Economy, England / UK, Parish Ministry, Preaching / Homiletics, Religion & Culture, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Young Veterans return home to scant Jobs

In Afghanistan, Cpl. Clayton Rhoden earned about $2,500 a month jumping into helicopters to chase down improvised explosive devices or check out suspected bomb factories.

Now he lives with his parents, sells his blood plasma for $80 a week and works what extra duty he can get for his Marine Corps Reserve unit.

Cpl. Rhoden, who is 25, gawky and polite with a passion for soldiering, is one of the legions of veterans who served in combat yet have a harder time finding work than other people their age, a situation that officials say will grow worse as the United States completes its pullout of Iraq and as, by a White House estimate, a million new veterans join the workforce over the next five years.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Defense, National Security, Military, Economy, Iraq War, Labor/Labor Unions/Labor Market, Young Adults

Brene Brown: The Power Of Vulnerability

But as hard and, frankly, as weird as it’s been at times, I didn’t trade in my mantra, nor did I give up on what I learned from the research: Vulnerability is not weakness, nor is it optional. We can’t opt out of the uncertainty, exposure, and emotional risks that are woven through our daily experiences. Like it or not, vulnerability is coming, and we have to decide if we’re going to open up to it or push it away.

The only choice we really have is how we’re going to respond to feeling vulnerable. And contrary to popular belief, our shields don’t protect us. They simply keep us from being seen, heard, and known.

If there’s anything I’ve learned over the past decade and experienced firsthand over the last year, it’s this: Our willingness to own and engage with our vulnerability determines the depth of our courage and the clarity of our purpose.

Read it all (her emphasis).

Posted in * Culture-Watch, * Economics, Politics, Corporations/Corporate Life, Economy, Pastoral Theology, Psychology, Theology

An incredibly important Speech by Dallas Federal Reserve Board President Richard Fisher

I maintain that no matter how much cash you have on your balance sheet, or how compliant your banker might be, or how cheap the cost of money, you will not commit substantial capital to expanding your payroll or investing significant amounts to expand plant and equipment until you know what it will cost you to run your business; until you know how much you will be taxed; until you know how federal spending will impact your customer base; until you know the cost of employee health insurance; until you are reassured that regulations that affect your business will be structured so as to incentivize rather than discourage expansion; until you have concrete assurance that the fiscal “fix” the nation so desperately needs will be crafted to stimulate the economy rather than depress it and incentivize job creation rather than discourage it; or until you are reassured that the sinkhole of unfunded liabilities like Medicare and Social Security that Republican- and Democrat-led congresses and presidents alike have dug will be repaired so that our successor generations of Americans will prosper rather than drown in dark, deep waters of debt.

My colleague Sarah Bloom Raskin””one of the newest Fed governors, and a woman possessed with a disarming ability to speak in non-quadratic-equation English””recently used the example of the common kitchen sink to illustrate a point. I am going to purloin her metaphor for my description of our present predicament. You give a dinner party. The guests leave and you are washing the dishes. When you are done, you notice the remnants of the party are clogging the sink: bits of food, coffee grinds, a hair or two and the like. You have two choices. You can reach down and scoop up the gunk, a distinctly unpleasant task. Or you can turn the water on full blast, washing the gunk down the drain, providing immediate relief from both the eyesore and the distasteful job of handling the mess. You look over your shoulder to make sure your kids aren’t looking, and, voilà, you turn the faucet on full blast, washing your immediate troubles away.

From my standpoint, resorting to further monetary accommodation to clean out the sink, clogged by the flotsam and jetsam of a jolly, drunken fiscal and financial party that has gone on far too long, is the wrong path to follow. It may provide immediate relief but risks destroying the plumbing of the entire house. It is a pyrrhic solution that ultimately comes at a devastating cost. Better that the Congress and the president””the makers of fiscal policy and regulation””roll up their sleeves and get on with the yucky task of cleaning out the clogged drain.

Read it all (emphasis mine).

Posted in * Culture-Watch, * Economics, Politics, Economy, Federal Reserve, History, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government