Free Internet Press Newsletter - Monday October 20 2008 - (813)

Monday October 20 2008 edition
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U.S. Deficit Rises And The Consensus Is To Let It Grow 2008-10-20 03:49:39 Like water rushing over a river’s banks, the federal government’s rapidly mounting expenses are overwhelming the federal budget and increasing an already swollen deficit. The bank bailout, in the latest big outlay, could cost $250 billion in just the next few weeks, and a newly proposed stimulus package would have $150 billion or more flowing from Washington, D.C., before the next president takes office in January. Adding to the damage is that tax revenues fall as the economy weakens; this is likely just as the government needs hundreds of billions of dollars to repair the financial system. The nation’s wars are growing more costly, as fighting spreads in Afghanistan. And a declining economy swells outlays for unemployment insurance, food stamps and other federal aid. The extra spending, a sore point in normal times, has been widely accepted on both sides of the political aisle as necessary to salvage the banking system and avert another Great Depression. “Right now would not be the time to balance the budget,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan Washington, D.C., group that normally pushes the opposite message. Confronted with a hugely expensive economic crisis, Democratic and Republican lawmakers alike have elected to pay the bill mainly by borrowing money rather than cutting spending or raising taxes. While the borrowing is relatively inexpensive for the government in a weak economy, the cost will become a bigger burden as growth returns and interest rates rise. Read The Full Story As Oil Prices Fall, Push For Alternative Energy May Ease 2008-10-20 03:49:15 Just four months ago, a conference here on electric cars drew four times as many people as expected. District fire marshals ordered some of the crowd to leave, and the atmosphere was more like that of a rock concert than an energy conference. A brief film depicted an electric car owner driving off with a beautiful woman to the strains of "The Power of Love" while her original companion struggles to pay for gasoline. The audience cheered. One discordant note in the series of enthusiastic speeches came from Bill Reinert, one of the Toyota Prius designers. He cautioned that designing and ramping up production of a new car takes five years. "If oil goes down to $60 or $70 a barrel and gasoline gets back to $2.50 a gallon, and that very possibly could happen," he said, "will that demand stay the same or will we shift back up?" It didn't take five years to hit those numbers. One type of oil shock has given way to another. Even more swiftly than the price of oil rose, it has tumbled to the range that seemed far-fetched when Reinert spoke and oil was more than $130 a barrel. Now that drop threatens a wide variety of game-changing plans to find alternatives to oil or ways to drastically reduce U.S. consumption. "Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off," said Greg Kats, a managing director of Good Energies, a multibillion-dollar venture capital firm that invests in global clean energy. The credit crisis is compounding that threat by making it more difficult to finance capital-intensive projects, whether they are new auto assembly lines or solar panels or wind turbines. General Motors has been touting the Chevy Volt as the first mass-marketed, plug-in hybrid vehicle. GM, which has been holding merger talks with Chrysler, believes the project will help justify federal financing. It hopes to deliver the car by the end of 2010. Read The Full Story Colin Powell Endorses Obama 2008-10-19 14:47:28 Barack Obama won the coveted endorsement of Colin Powell this morning and his campaign announced it had raised a staggering $150 million in September, giving the Democratic front-runner two big boosts heading into the final weeks of the presidential campaign. Powell hailed the Illinois senator as a "transformational figure" and expressed disappointment in the negative tone of Republican John McCain's campaign, as well as his choice of Alaska Gov. Sarah Palin as running mate. Powell said both Obama and McCain were qualified to serve as commander in chief, but not Palin. He also suggested Obama was better suited to handle the nation's economic problems and build its stature around the world. Powell, 71, a retired Army general who served as President Bush's first secretary of state, delivered his endorsement in an appearance this morning on NBC's "Meet the Press." "We need a president that will not just continue, even with a new face and some changes and with some maverick aspects, will not just continue basically the policies that we have been following in recent years," said Powell, a Republican who served in three Republican administrations. Read The Full Story Analysis: An Arduous Transition Awaits Next President 2008-10-19 02:58:11 If Sen. Barack Obama wakes up as the president-elect on Nov. 5, he will immediately assume responsibility for fixing a shredded economy while the Bush administration is still in office. If Sen. John McCain wins the election, he will face an imminent confrontation over spending with a Democratic Congress called back into special session with the goal of passing a new economic stimulus package. Either way, the 77-day period between Election Day and Inauguration Day, traditionally known simply as the transition, is sure to present difficult challenges to a new president buffeted by intense forces, political and economic, without any chance to recover from the long and bruising campaign. The challenge of putting the country back on a sound financial track has altered what under the best of circumstances would have been a frenzied period spent forming a new government. Instead, Obama or McCain will be forced to assemble a new administration even as he helps shape policies to ward off further declines in the economy. Whoever is the new president will be under intense pressure from his own allies to live up to his campaign promises. Antiwar groups would press Obama to start the process of ending the war in Iraq, and conservatives would demand tax cuts from McCain. Either side would want to know that its candidate has an agenda to enact on his first day in the White House. With the outcome of the election still in doubt, neither campaign is eager to discuss plans for that day or the transition that precedes it, other than to acknowledge the urgent circumstances the 44th president will confront. "I don't think he's thinking about [Inauguration Day on] January 20," said one top Republican involved in the McCain campaign. "He's thinking about November 5." Read The Full Story Migrating Alaska Pollock Create Potential For New Dispute With Russia 2008-10-19 02:57:46 America's biggest catch lands here in Dutch Harbor, Alaska, and at nearby ports every year: more than 2 billion pounds of Alaskan pollock to feed a global appetite for fish sticks, fast-food sandwiches and imitation crabmeat. The tightly managed Alaskan pollock fishery has been a rare success story in the U.S., which has seen the collapse of species such as New England cod and now imports 80% of its seafood. Yet the careful management that helped make Alaskan pollock a billion-dollar industry could unravel as the planet warms. Pollock and other fish in the Bering Sea are moving to higher latitudes as winter ice retreats and water temperatures rise. Alaskan pollock are becoming Russian pollock, swimming across an international boundary in search of food and setting off what could become a geopolitical dispute. Andrew Rosenberg, former deputy director of the National Marine Fisheries Service, expects the pollock to be a test case in an emerging pattern of fish driven by climate change across jurisdictional boundaries. Read The Full Story	Global Warming Linked To Disease 2008-10-20 03:49:28 When a 1991 cholera outbreak that killed thousands in Peru was traced to plankton blooms fueled by warmer-than-usual coastal waters, linking disease outbreaks to epidemics was a new idea. Now, scientists say, it is a near-certainty that global warming will drive significant increases in waterborne diseases around the world. Rainfalls will be heavier, triggering sewage overflows, contaminating drinking water and endangering beachgoers. Higher lake and ocean temperatures will cause bacteria, parasites and algal blooms to flourish. Warmer weather and heavier rains also will mean more mosquitoes, which can carry the West Nile virus, malaria and dengue fever. Fresh produce and shellfish are more likely to become contaminated. Heavier rainfalls are one of the most agreed-upon effects of climate change. The frequency of intense rainfalls has increased notably in the Midwest, the Northeast and Alaska, and the trend will accelerate, said the 2007 report of the United Nations' Intergovernmental Panel On Climate Change (IPCC). The consequences will be particularly severe in the 950 U.S. cities and towns - including New York, the District, Milwaukee and Philadelphia - that have "combined sewer systems," archaic designs that carry storm water and sewage in the same pipes. During heavy rains, the systems often cannot handle the volume, and raw sewage spills into lakes or waterways, including drinking-water supplies. Read The Full Story ING Bank Accepts 10 Billion Euro Dutch Cash Injection 2008-10-20 03:48:47 ING, the Dutch savings bank which has more than a million savers in the U.K., is to get a €10 billion capital injection from the Netherlands authorities, the latest bank to be affected by the global credit crisis. ING is the Netherlands' largest listed bank, with 85 million customers worldwide, and is one of the world's top 20 financial institutions. It operates under its own name in this country, and recently took control of 180,000 accounts from failed Icelandic banks Kaupthing Singer & Friedlander and Heritable Bank. ING has grown strongly in the U.K. on the back of its well-received savings products and has become a household name, regularly appearing in best-buy tables. It also took over the failed U.K. investment bank Barings in the 1990s. At a press conference tonight the Dutch finance minister, Wouter Bos, said the government would get preference shares in ING worth €10bn in return for the cash injection. The shares will pay the government annual interest of 8.5%. The Dutch government will also appoint two members of the bank's supervisory board - the equivalent of its board of directors. The bank is scrapping its dividend payout to shareholders and its senior executives have agreed to forfeit their annual bonuses and limit their pay-offs to a maximum of one year's salary. Read The Full Story In U.S., States Face New Budget Shortfalls 2008-10-19 02:58:21 Economists worry that shriveling tax revenues may signal the onset of a history fiscal crisis for state governments. Pared down spending plans just months ago may have been just the start. The moribund economy is drying up tax revenues more dramatically than expected, forcing 22 states, including California, to confront growing budget gaps. Some states have already eliminated jobs and services - and more cuts are likely. The new shortfalls - totaling at least $11.2 billion - come just months after numerous states enacted belt-tightening measures while writing their yearly budgets. Officials also adjusted their revenue projections downward to account for the slowing economy. In many cases, the actual revenue for the first quarter of the fiscal year, which began July 1, has proven to be even lower. The gaps "will almost certainly widen" as tax revenues continue to disappoint, according to the Center on Budget and Policy Priorities, a Washington think tank that compiled the state data in a report this month. Economists and other observers fear the numbers may signal the onset of a historic fiscal crisis for state governments. Read The Full Story Muqtada al-Sadr Urges Iraq Lawmakers To Reject U.S. Troop Deal 2008-10-19 02:57:57 Thousands of supporters rally in Baghdad. A statement from the Shiite cleric calls on parliament: "Do not betray your people." Shiite Muslim cleric Muqtada Sadr warned Iraqi lawmakers that approving a U.S. troop agreement would be tantamount to a betrayal of the Iraqi people, as his supporters rallied Saturday against the deal. As many as 20,000 protesters shouted, "No, no, America!" in a visceral display of the deep apprehension among Iraqis over the security pact that would extend the U.S. military presence in Iraq after a United Nations mandate expires in December. Iraqi officials, even those close to the Americans, have been reluctant to back a deal that could effectively label them a puppet of foreign powers. The government's close relationship with the Americans has enhanced the stature of Sadr, who has refused to cooperate with U.S. officials. "They have portrayed this agreement in a manner as if it would end the presence of the occupation on our land, but the occupiers will remain with their bases, and anyone who tells you that this agreement will make us sovereign is a liar," Sadr said in a statement that was read by Sheik Abdul Hadi Mohamedawi to a sea of people waving red, white and black Iraqi flags. "I know for a fact, my brothers in parliament, that you will favor the opinion of your people over the opinion of the occupier. Do not betray your people." Read The Full Story
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