In testifying yesterday before the House Committee on Agriculture, Jon Corzine, former head of failed MF Global — which took customers' funds for its own use when it had financial difficulties because of risky investments — expressed repeatedly his grief over what went wrong with his company, and his sympathy for the “plight” of his customers who lost millions if not billions of their money with its downfall: “Their plight weighs on my mind every day — every hour. And as the chief executive officer of MF Global at the time of its bankruptcy, I apologize to all those affected.”
Ron Paul has garnered support from a great variety of different groups, as well as from celebrities such as Vince Vaughn and Barry Manilow, and even hip hop performers Prodigy and KRS-One; however, perhaps one of the most interesting and welcome endorsements for the Texas Congressman came this week from an editorial in Forbes magazine.
After being asked about the walkout of a few of his students from his Economics 10 class on November 2, Harvard professor Greg Mankiw responded with an open letter in the New York Times. The walkout involved only about 30 or 40 of the 750 students who usually attend, he noted. In addition, some other students entered his class as a “counter protest,” and at least one of the original protesters returned to his class because he didn’t want to miss his lecture.
In his candid appraisal of the letter from Germany’s Angela Merkel and France’s Nicolas Sarkozy to the European Union meeting that starts Friday in Brussels, Dan Murphy makes clear that this summit will be different from the previous 20: This one is determined to override national sovereignty to save the euro. The core of the letter is the offer of the fatal alternative to the euro zone nations: Either give up essential sovereign control over your budgets to the EU, or destroy the euro.
In its second annual survey of the best- and worst-run states, 24/7 Wall St. noted some significant changes but the same message: “States can do a great deal to control their fate.”
When we studied U.S. history in high school and college, we were taught that during the Industrial Revolution working people in the United States were virtual slaves, mercilessly exploited by their employers. That spawned a strong labor movement, which raised factory workers from a state of destitution, and labor unions continue to wage a ceaseless struggle to prevent workers from once again being subjugated by their employers. But to what extent is this so-called “conventional wisdom” the result of union propaganda that has found its way into our educational establishment, rather than the result of a thorough analysis of the nature of labor unions and a comprehensive study of economic history? In other words, were we really being educated in our U.S. history classes, or were we actually being indoctrinated?
Many history textbooks that discuss the rise of the labor movement assume without question that there is an inherent conflict between employers and employees. This is based on the notion that each party will act in its own self-interest: Employers will want to employ the best workers available for the lowest wages possible, while workers will want to earn the highest wages possible for the least amount of effort. On closer inspection, however, one sees that employers and employees are not actually competitors. Rather than having an adversarial relationship with one another, their fundamental relationship is really based on cooperation and mutual benefit: The employer provides a job and the employee does the work. They must work together, because they are both trying to accomplish a common purpose, namely, the creation and delivery of some good or service for which there is a consumer demand.
On Tuesday, the European Commission for Competition reported that it will initiate an investigation into Apple, Inc. for alleged anti-competitive practices regarding the Cupertino, California, company’s negotiations with book publishers. Such an inquiry is authorized by Article 11(6) of the EU’s Anti-trust Regulation. That measure reads in relevant part:
UPDATE: The House passed the REINS Act by 241-184 at 5:30 PM on December 7.
In a purported effort to trim $3 billion in costs, the cash-strapped U.S. Postal Service (USPS) announced Monday it will move forward with a plan to terminate next-day delivery of first-class mail, including everything from letters to postcards to large envelopes. Facing the damning reality of bankruptcy, officials also plan to close the doors of more than half of the 461 processing facilities that have been vital to the effectiveness of next-day delivery.
Having lost 29 percent of its first-class mail volume in the last 10 years, USPS officials view a reduction in its network of post offices and processing centers as necessary to endure the stale economy and technological advances such as e-mail correspondence and online bill-paying that have burdened revenues.
"The fact of the matter is our network is too big. We’ve got more capacity in our network than we can afford," David Williams, vice president for network operations, asserted during a press conference Monday. "More importantly, we've got to set our network up so that when volume continues to drop, our network is nimble and flexible enough to respond to those volume losses." Williams assured that service standards would not change before next April.
The move would lower delivery standards for first-class mail for the first time in 40 years, as the distance between post offices and processing centers will broaden.
Last week’s announcement that the auto industry could add as many as 167,000 jobs by 2015 merely confirmed what some economists were saying: that lower wages allow car manufacturers to hire more people more profitably. As part of the agreement between the federal government and the unions in 2007, a lower tier of wages was created in order to halt the hemorrhaging of cash the carmakers were experiencing that led to the bailouts. The unions reluctantly agreed to accept the two-tier system, concluding that a lower-paying job was better than none at all.
Before the agreement, auto workers were making about $29 an hour, plus benefits (health insurance and a pension plan), which brought the total to $50 an hour or more. The onset of the recession pricked that “high wage bubble” which had been hidden prior to the recession. Under the 2007 agreement, entry-level workers were paid $14 to $16 an hour, plus benefits, bringing their total compensation to about $25 an hour. Although those wages affect only about one in every six workers, it was enough to allow Chrysler to turn a profit last quarter of $212 million, potentially setting the stage for its first profitable year since 2005.
At present it takes between 20 and 30 man-hours to produce a new vehicle. Chrysler’s costs are the lowest of the big three automakers, averaging about $1,250 per vehicle. And so the new wage pact agreed to early this fall will add only a few dollars to the overall price of a new car.