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Tuesday, August 23, 2011

Can we Grow the Economy Any More?

Kevin Drum had an interesting post yesterday in which he collected a list of theories for why it's difficult to grow the economy any more:
  1. The basic Rogoff/Reinhart observation that financial collapses due to asset bubbles just take a long time to work through. Given the size of the 2008 collapse, historical evidence suggests that it's going to take five or six years to recover, and that's that.
  2. The Tyler Cowen "Great Stagnation" hypothesis. We've picked through all the low-hanging economic fruit over the past century, and like it or not, we're now entering an extended period of low productivity growth because we're not inventing lots of cool new stuff.
  3. The related (I think) investment drought hypothesis. Ben Bernanke famously ascribed the housing bubble partly to a "savings glut" from overseas, and the flip side of that is an investment drought. The reason financial assets became so popular is that, even with all that money sloshing around the system, there simply weren't very many high-quality investment opportunities available in firms that make real-world goods and services, and that hasn't changed.
  4. The peak oil theory. Production of oil has pretty much maxed out, which means that every time the economy gets moving it will create a spike in oil prices, which will send the global economy back into recession. We're now in a continual oil-fueled boom/bust cycle that limits our long-term growth rate.
  5. The Michael Mandel contention that increased consumption simply leaks out of the economy to China and other countries. Stimulating consumption in the U.S. just won't do much for the American economy if all those extra dollars mostly get spent on overseas goods and services.
  6. Various structural explanations that suggest the United States has an increasing number of workers who flatly don't have the skills to do anything useful in the modern economy — a problem that was temporarily masked by the housing bubble and was only fully exposed when the economy collapsed. This takes various forms, both weak (workers can be retrained but it will take a while) and strong (forget it, they're simply useless).
  7. The self-serving group of partisan hack theories: regulatory uncertainty is the real problem, taxes are too high, the EPA is strangling America, hyperinflation is just around the corner, markets are cowering in fear of future deficits, etc. etc.
Of these, I subscribe to versions of 1, 4, 5, and 6.  But let me comment first on the ones I don't agree with.

As a working inventor for Silicon Valley I think 2) doesn't pass the sniff test - inventors and entrepreneurs are all manically dreaming up robots, speech and vision processing algorithms, automated driving systems, information retrieval and processing systems, etc, etc: all of which will eventually be sold to corporations with an ROI calculation that basically looks at how many people would be paid how much to do the job now and then demonstrates that paying the startup for the new technology will involve a lower ultimate cost (and probably higher reliability too).  Silicon Valley is currently in flat-out sprint mode - hardly a sign of nothing worth inventing or commercializing.

I think 3) is a symptom not a cause.  Interest rates are low in developed countries because it's hard to grow, not the other way around.  And like Kevin I see 7) as partisan rationalizations rather than genuine theories.

1) I completely agree with - historically we've seen that major leveraged booms (like the 1920s in the US or the 1980s in Japan) tend to end in tears and take a long time to recover from.  Still, if that was our main problem it would be soluble by massive government borrowing and stimulus.  This is roughly the Paul Krugman view of the world - that 1) is the overwhelming problem and that it could be solved if only the intransigent political system would get with the program.

However, I also subscribe to 4) - the view that energy supply is a short-term-indispensible input to economic activity and that the liquid fuel component of the energy supply is currently constrained enough that significant bursts of economic growth will quickly run into this constraint and trigger oil price shocks.  We've had two of those now in the last few years (2005-2008 and 2010-2011) and I've no doubt we'll see more.  These have a strong tendency to be triggers for recessions or slowdowns.  To Krugmanites this is an inconvenient fact to be more-or-less ignored but to me it's a central fact of our times.

If 1) and 4) were our only problems the solution would be "Green Stimulus": a massive program of investment in alternative energy and energy efficiency measures.  By having the government borrow a bunch of money and use it to subsidize plugin-hybrids, electric cars, windmills, solar panels, etc, etc we could create a bunch of jobs now in the short term while setting ourselves on course to remove our oil dependence over the course of a couple of decades.  Things would probably still be very tricky in the short term: we have huge sunk investments in buildings, infrastructure, and vehicles that are organized for cheap oil and those can only be changed out slowly.  In the meantime, create too much economic activity and it will still trigger an oil shock.  But we'd be moving in a better direction.  Not, of course, that there's any chance of the current political system delivering this, but let's keep going with what we could do if we were smarter.

So then we have the problem of 5) too.  The Chinese have cheap labor, cheap capital, cheap coal, and are buying US assets to keep their currency cheap too.  This causes multiple problems for the "Green Stimulus" plan - one is that because US manufacturing is struggling to compete with Chinese manufacturing, a lot of the jobs would undoubtedly leak to China.  Secondly, a large scale Green Stimulus would leave the US with an even bigger sovereign debt than it would otherwise have and it's unclear to me how safe it is for an economically uncompetitive US to try to navigate coming decades with a huge public debt.

So then it's tempting to say capital controls and import restrictions (at least with respect to China).  Of course the Chinese would retaliate but since they already have capital controls and they are the ones running the big surplus perhaps we stand more to gain than to lose here at present.

But then there's 6) in which I also strongly believe.  In Silicon Valley, currently, it's extremely hard to hire good people because the demand for them is so strong.  Decent engineers, product managers, finance people, salespeople, etc, etc are absolutely guaranteed a job.  There's no question the lack of more such people is a constraint on the growth of many firms in the valley.  Meanwhile the national employment/population ratio for male high-school dropouts ages 25-54 is down to 50%.  The only roles I can imagine for such folks in a high-tech company is as the janitors or the guys that cut the lawn outside.  There's just a very limited number of those positions (and iRobot is doing its best to eliminate the ones that remain).

So even if we could transition to a bright green economy of the future, and neutralize the Chinese threat, I'm still really struggling to see how it could provide employment, and thus meaning, to the lives of the lower percentiles of the education/intellect distribution.  But without being able to do that, I struggle to see how we can have a decent society (or even a stable one).

buck smith said...

Regarding number 7 I think there is some opportunities there. Look at what has happened in the Gulf since BP spill

And the government could by leasing more of the land it owns for drilling (the Rockies and the West, ANWR, offshore east coast) cause a significant amount of jobs and investment activity to occur.

Glenn said...

This post seems to considerably reduce the self confessed gap between your view and the Archdruid's

Bob Carver said...

"The Chinese have cheap labor, cheap capital, cheap coal, and are buying US assets to keep their currency cheap too."

Inflation in China is pushing them rapidly toward cost parity with the US. By 2014, the US will have a cost advantage compared to China, especially if you consider the cost of transporting goods from China to the US.

"By having the government borrow a bunch of money and use it to subsidize plugin-hybrids, electric cars, windmills, solar panels, etc, etc we could create a bunch of jobs now in the short term while setting ourselves on course to remove our oil dependence over the course of a couple of decades."

It's not necessary for the government to borrow money. They can loan it into existence just as they've done for the banks. A National Infrastructure and Entrepreneurial Bank would issue loans to inventors at 0% rates with a long term payback period.

There are solutions to our problems. Those solutions threaten the current holders of wealth and will not be implemented until the weathholders feel there is no other solution.

Burk Braun said...

Frankly, I disagree with every one of your points, at least as far as they apply to unemployment. Economic growth is subject to input constraints like fuel shortages, (4), but employment is not. Everyone can be put to work doing useful things if we want to- there is purely a lack of will, not of resources.

1: Financial collapse only affects wider economic growth due to bad policy. If loss of credit and confidence is not made up by state capital and spending, then it is our own fault for shooting ourselves in the feet. This damage is entirely self-inflicted, both on the front end from lack of regulation of the industry, and on the back end from insufficient cleanup policy.

3: As above. The world is absolutely awash with money. The problem is motivating people to invest it productively. It is a solve-able problem.

5: The dollars we send overseas are free money. We print it, they stockpile it. And they send us goods in return. We should enjoy it while we can, (and not let them export their unemployment), by printing whatever is needed for our own growth plus our trade deficits. Someday, when China decides to actually use their dollars, we will get them back in the form of trade, and export more and gain that employment.

6: Have you seen all the trash on the streets? How are we doing on global warming and green enegy? How are we doing on habitat restoration and parks maintenance? We have plenty of work for all skill levels, if we wish to employ people. This is entirely a political matter, not one of economics.

kjmclark said...

Krugman has said he thinks the energy constraint is real. He later said that it isn't an inconvenient fact to be ignored, but rather something that will help prod us in the right direction. That's been a fairly consistent point of free-market economists for quite a while. If peak oil is a problem (and many of them agree that it is), the solution is to have oil prices rise and let markets work through the problem. For them, it's not an existential crisis, it's a resource problem that should be resolved just like other resource problems - through higher prices.

Krugman thinks we're in a liquidity trap right now, and anything that gives monetary policy traction - including inflation through energy prices - is not, at the moment, a bad thing. And in the next paragraph, you point out the solution Krugman has suggested too. He was pretty irate for a week or two about the NJ Governor's decision to cancel a long-planned rail bridge.

Where you differ is that Krugman would just as soon see more stimulus spending even if it weren't intended to deal with peak oil and climate change. I think you would see that as wasted money. OTOH, there are a lot of conservatives who think that peak oil is the liberal apocalypse myth, and climate change is a socialistic plot. So Krugman is probably right that we'd have to take the pointless stimulus with the valuable stimulus to make any progress.

Burk Braun said...

Incidentally, here is a discussion of what more aggressive #1 policy would look like.

BS said...

The current administration proposal is to invest in roads and bridges. This is counterproductive to decreasing reliance on foreign oil. Investing in rail and renewable energy seems like a wiser choice.

It is time to implement a buy american policy (tariffs?). ESLR just went bankrupt and ENER is not far behind. Lots of potential US made panels going away. How stupid is that?

rks said...

I had a eureka moment the other day when I worked out that it is the change in the cost of oil production, not the change in the price of oil, that kills the world economy. The argument is here: http://grampsgrumps.blogspot.com/2011/08/how-peak-oil-destroys-world-economy.html.

Stuart Staniford said...

Krugman has acknowleged resource constraints to varying degrees at different times. However, this seems to be a fair summary of his recent views:

Technology continues to advance; resource shortages are not severe enough to pose a major constraint; climate change is terrifying in its long-run implications, but hasn’t inflicted much damage yet. The only major problem we have right now is the one that was supposed to be easy to solve: a simple lack of adequate demand. And we’re totally failing in our response.

I take "the only major problem" as evidence for my view that "This is roughly the Paul Krugman view of the world - that 1) is the overwhelming problem and that it could be solved if only the intransigent political system would get with the program. "

James said...

I think you really nail it, Stuart.

I'm a big fan of Krugman but I think that Stuart is right to criticism him on 4). I can only argue that Krugman is at least better than the average economist in appreciating the danger of peak oil.

No doubt 5) is something of a problem - and I think it is worth noting that every econ 101 textbook uses this as an explanation of why greater government spending on infrastructure does more to stimulate the economy out of recession than do tax cuts.

As for 6), it reminds me that I was more strongly in favour of "red in tooth and nail" capitalism until I watched the documentary "Manda Bala", which convinced me that the successful cannot afford to ignore the plight of the unsuccessful.

Michael Cain said...

2) I read Tyler as being focused on consumer things that (a) changed people's lives and (b) employed large numbers of people in production and support. When I walk around my house, the things that satisfy those conditions that wouldn't be conceptually recognized by someone from the mid-1960s are personal computers and the associated software. And even many of the things that computers do would be recognizable: word processing, spreadsheets, e-mail are all analogs of things that had already been invented. The insides of things have changed dramatically, thanks to large scale integrated circuits, and the way things are made has changed drastically, but much of it is still the "same" stuff; an iPod and a transistor radio fulfill the same function. Whether SV is currently creating a revolution depends on the perspective you take; is a car that can drive itself something new, or just a cheaper chauffeur?

4) Energy transitions will be the defining issue of the first quarter of this century. Looking back, people will ask, "Were you blind? All that bickering about Social Security and Medicare and gay marriage while you ignored the whole deal about keeping the lights on for your kids and grandkids?"

6) This one, particularly if the strong form holds, will be the most interesting. In the US since WWII, the basic social contract has been "Business will be relatively lightly regulated and taxed (relative to the standards of the rest of the developed world), and in exchange will provide everyone who needs a job with one that pays at least a marginally living wage." The strong form of (6) implies that the agreement is no longer workable. Historically, restructuring of social contracts has usually been a remarkably messy affair.

kjmclark said...

Not exactly fair. He left off one word and you took off four. He clarifies climate change with "yet", and "major problem" with "right now", but didn't say "yet" WRT resource shortages. And as I said, a lot of economists think resource constraints could be a problem but rising prices will generally deal with it.

But you left off "we have right now". He's not talking about ten or even five years from now. From his perspective, solve the jobs problem now and let energy prices rise. The energy constraints aren't bad enough "right now" to bring things crashing down, and isn't that pretty much what we're seeing? High gas prices are encouraging higher fuel economy, as you yourself said they would several years ago.

He discussed his views in more depth in a column a few years ago. The point I took from that is that he thinks of it as an economic challenge, and not an immediate one. The immediate problem is the jobs situation, and I'd add (as I always do, living less than 40 miles from downtown Detroit), the potential for civil unrest.

Greg said...

What Burk said. (I'm getting repetitive!) Additions:

I'd like to add number 8, concentration of income, to the list. Demand is weak because real income is not growing noticeably for 60% - 75% of the population. It's that simple, really.

Actually, make that number 0, not 8.

On no. 2: you had it right with the word "eventually". Not now.

But the things that Silicon Valley is inventing are, by and large, substitutes for labour, not complements. They don't enable large numbers of people to do qualitatively new things, or lower the cost of existing services with high price elasticity. And they're not doing it this year, either.

The exception is cell phones. They are helping to lift hundreds of millions of Asians and Africans out of abject poverty. This will eventually (that word again!) create demand for things that Americans do... but not for a decade or so.

On 4, it's not just oil. As Krugman has pointed out, and Jeremy Grantham breathlessly hyped to the max, we're in another commodity super-cycle such as we had in the 1970s. Food, textiles and various minerals have also risen in price. Will the price rise eventually lead to a price crash, as in the 80s and 90s? I don't know. But the rise has helped reduce real incomes.

On 6, it may be hard to hire software engineers, etc., in Silicon Valley because people have memories.

Everyone remembers the dot-com bubble and crash, and everyone can see another bubble forming. Yes, you can get a job ... but for how long? The "social contract" is well and truly dead in SV. Better to find work in a more stable industry, like health care.

William T said...

I think that #3 is quite relevant - in effect, capital is "sticky" and tends to accumulate to the few who already have it. We're now at a point where a few have far too much capital to effectively utilize, while a large number of people (global, even national) have literally not enough to participate in the economy (hence #6 and perhaps #1). As you say, there are trillions sloshing around the world, being used to buy loans or other financial products - rather than doing anything "useful".

dr2chase said...

I thought someone had studied #5, even at the state level, and concluded that there was enough local stickiness to make it worthwhile even on a state-by-state level (i.e., enough Massachusetts stimulus stays in Massachusetts, to make it worthwhile, even though it is also good for New Hampshire and other neighboring states).

I'm a little skeptical of "green stimulus", at least in the form that you describe it. Cars are inherently wasteful because of their size; better to work on why people aren't comfortable in/on much smaller vehicles (everything from bicycles, to e-scooters, to motorcycles and golf carts). My understanding is that the #1 problem is overwhelmingly (perceived) safety. You can fix that with stimulus, but it is different. Whether this is a net stimulus is hard to tell, because if you are riding around on a vehicle 1/10th size of an automobile, it's little surprise that it takes less employed-person input to produce it. On the other hand, reduced oil consumption will help soften any oil shocks -- so which item is more important?

Christopher Minson said...

Great post. Very accurate IMO.

I also spent a career in the valley, but left it three years ago. Relocated my family overseas to a (hopefully) somewhat safer place. The writing is on the wall, but few want to admit it.

The equation isn't solvable and the US - and the rest of the world in varying degrees - is looking at a hard fall. I think this will severely test our political system. It simply isn't constructed to correctly analyze and deal with interlocking issues of this magnitude. Worse, the leadership is partisan and almost entirely composed of lawyers. I can't think of a worse group to deal with these issues.

I suggest silicon valley won't look so nice in a few years ti e. Reality will eventually intrude.

yvesT said...

Good summary of Krugman view with the extract you put Stuart, also noticed that one and was quite amazed I must say.

To me overall if the US doesn't reinvent its cities shapes and concept, not much chance to survive ...

dcomerf said...

Krugman's correct in his prescriptions. If we're to have a solution to resource constraints then we need prices to go in the 'right' way. Demand frictions and liquidity traps mean the prices go in the 'wrong' way c.f. oil price at $30 in 2009.

yvesT said...

"If we're to have a solution to resource constraints then we need prices to go in the 'right' way."

And best way to accelerate the move is to put taxes on raw materials closest to these constraints, typically oil right now : and the US keeping its ridiculously low level of gas taxation, if anything, shows its level of commitment towards total economic suicide.
Make part of these "taxes" revenues directly redistributed if necessary like in (2) below :

g said...

"lower percentile of the education/intellect distribution"...WOW! that is ignorant. i am in that male demographic you cite. i gotta say you have no clue what you are talking about. i was workin at 12. i was a drop out at 16. that is real. seriously...high school is so irrelevant to the real world--experts say as much--and only serves to pattern thought and action. and i realized it and acted on that at 16. seriously. smoke weed everyday.

if you took a random sampling of "future expectations" among silicon valley professionals and the "lower percentile of the education/intellect distribution" which do you imagine would reflect your own view--perhaps stated differently--or that of the cargo cultist? Which would be better prepared for your future? if you wanna know how we will live in a future without money,ask someone who lives without money. technology is not the solution, technique is. the current arrangements blow. why would one want to perpetuate them?

Stuart Staniford said...

What would be your preferred way of referring to your demographic?

Also: I can certainly understand why you would think current arrangements blow - what are your thoughts on what should happen instead?

ulfat said...

It is a good summary, which has culminated in an unstated conclusion that the system has come to the end of its life. The only solution is for the system to incorporate welfare as a necessity to allow it to function, but is rejected politically. China that should expand domestic consumption is not doing so and is relying on the US consumer for its growth, which again accelerates the failure of the system.


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2011 December 14 05:04:57 UTC

Versión en Español

Earthquake Details

  • This event has been reviewed by a seismologist.
Location 7.518°S, 146.767°E
Depth121.2 km (75.3 miles)
Distances89 km (55 miles) SSW of Lae, New Guinea, PNG
123 km (76 miles) ENE of Kerema, New Guinea, PNG
221 km (137 miles) NNW of PORT MORESBY, Papua New Guinea
2308 km (1434 miles) NNW of BRISBANE, Queensland, Australia
Location Uncertaintyhorizontal +/- 12.9 km (8.0 miles); depth +/- 6.2 km (3.9 miles)
ParametersNST=470, Nph=482, Dmin=212.6 km, Rmss=0.76 sec, Gp= 11°,
M-type="moment" magnitude from initial P wave (tsuboi method) (Mi/Mwp), Version=9
  • Magnitude: USGS NEIC (WDCS-D)
    Location: USGS NEIC (WDCS-D)
Event IDusc00076e5
  • Did you feel it? Report shaking and damage at your location. You can also view a map displaying accumulated data from your report and others.

Earthquake Summary

Small globe showing earthquakeSmall map showing earthquake

Earthquake Summary Poster

Tectonic Summary

The Eastern New Guinea Region earthquake of December 14, 2011, occurred as a result of oblique-normal faulting deep beneath eastern Papua New Guinea, near the northern edge of the Australian Plate. Earthquakes in this geographical region are associated with the large-scale convergence of the Australia and Pacific plates, and with the complex interactions of several microplates between the two, most notably the South Bismarck plate, the Solomon Sea plate, and the Woodlark plate. At the latitude of this event, the Australian plate moves towards the east-northeast with respect to the Pacific plate at a rate of approximately 10 cm/yr.

The depth of the December 14 earthquake implies that it occurred in subducted or foundered lithosphere. Although there is still not complete geophysical consensus on the location and configuration of subducted plates in the region, the location of the earthquake is consistent with it occurring in a subducted fragment of the Solomon Sea plate that is bent about an approximately east-west axis and subducting both to the north and to the south or southwest. In northern Papua New Guinea, approximately 80 km to the north of the December 14 event, clear north-directed subduction of the Solomon Sea plate beneath the South Bismarck plate occurs, with the associated Wadati-Benioff zone active to depths of over 600 km beneath the Bismarck Sea to the northeast of New Guinea. The location of the December 14 earthquake would place it in the gently south-southwest dipping segment of the Solomon Sea plate.

Papua New Guinea experiences a moderate-to-high rate of seismic activity, with almost 50 events of M6 or larger occurring within 250 km of today's event since 1973. Nearby (within 100 km), only one large earthquake has occurred at depths greater than 100 km - a magnitude 7.3 earthquake 60 km to the west at 180 km depth in 1963.

Earthquake Information for Papua New Guinea

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The earthquake locations and magnitudes cited in NOAA tsunami statements and bulletins are preliminary and are superseded by USGS locations and magnitudes computed using more extensive data sets.

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text:
Picking Over Test Results

    For several years now, the Montauk School Board has been trying to get specific numbers and test scores for students from the Montauk School District. Members wanted to know how the students were doing compared to their counterparts and how many were dropping out of high school before graduation.
    Adam Fine, the East Hampton High School principal, visited the board on Tuesday to help. Armed with a 12-page booklet outlining performance assessments from 2011, he said there are now 925 students attending the high school, 150 of whom are from Montauk.
    He said that the state’s 2-percent cap on property tax increases that went into effect last year prevented the East Hampton district from replacing several teachers who retired. “We’re bursting at the seams right now. I’m not looking forward to the budget this year,” he said.
    With the exception of earth science and trigonometry, Montauk students are doing well on testing. In algebra 2-trigonometry, 56 percent of Montaukers passed their Regents exams, in comparison to 60 percent over all at the high school. “We’re making a huge push to improve this,” the principal said.
    In earth science, 59 percent of Montauk students passed, versus 73 percent overall. In geometry, 87 percent of Montauk students had passing grades, compared to 79 percent schoolwide. Last year was the first that the school made an effort to push the students into geometry, Mr. Fine said. “Your scores are good, very good. We’re still acclimating them.”

About Dropouts
    The dropout rate has decreased to what Mr. Fine called a very minimal amount, he said in response to a question from Patti Leber, a Montauk School Board member. The problem with some of the district’s students is that they want to start working on fishing boats right away, he said. But he discourages that, he said, and tries to explain the value of getting at least a two-year college degree.
    “That’s my battle with some of the Montauk kids. I tell them there is an inherent value in getting a degree. It’s a hard sell,” Mr. Fine said.
    When asked how Montauk students perform socially and athletically, the principal said they were fine. All students have some way of identifying their hometowns, he said, and even if he doesn’t know where the students come from, it’s easy to tell from the sweatshirts and other apparel they wear, which are often plastered with “Montauk.”
    “They maintain their hometown identities, but the bottom line is once they’re here, they’re all Bonac,” he said.


text:
Democrats Make Their Picks

Members of the East Hampton Town Democratic Committee carefully tallied votes for town board candidates during a nominating convention on May 15 at St. Michael’s Lutheran Church in Sag Harbor. Morgan McGivern

The nomination of Zachary Cohen for East Hampton Town councilman from the floor at the Democrats’ nominating convention on May 15 made for some tense moments for Job Potter and Kathee Burke-Gonzalez, the candidates favored by the party’s screening committee. In the end, Mr. Potter and Ms. Burke-Gonzalez prevailed.
    They will share the top of the ticket with Larry Cantwell, the outgoing East Hampton Village administrator, who is also running on the Independence Party line.
    Until earlier this month, Mr. Cohen, who lost his 2011 bid for town supervisor by just 15 votes, was hotly pursing the Democrats’ nomination for supervisor again, but in the wake of the screening committee’s announcement earlier this month that it would back Mr. Cantwell, he withdrew his name from consideration. On the morning of May 15, he said he had “urged everyone to support Larry.”
    At the convention, held this year at St. Michael’s Lutheran Church in Amagansett, members of the Democratic Committee who disagreed with the screening committee’s recommendations could offer alternate nominations. Chuck Hitchcock of Springs nominated Mr. Cohen for councilman and Mary Miller of Montauk seconded.
    “The past two years have been very painful for all of us in East Hampton,” Mr. Hitchcock said, reflecting on Mr. Cohen’s narrow loss in 2011. He said Mr. Cohen “has done his homework and is ready to begin work on Jan. 1” and called him “an electable, intelligent, and caring individual who will make an excellent town board member.”
    When the votes were cast, it was clear many agreed. Mr. Cohen received support from committee members representing 10 of the town’s 19 election districts.
    Two committee people represent each district, with their votes weighted according to the number of Democrats who voted in the last gubernatorial election in the district. Some seats are vacant. If one of the two was absent at the convention on May 15, the remaining committee person held all the votes for the district and could not split them between more than two town board candidates. Michael O’Neill, for example, was the only one representing Election District 11 in East Hampton, the third largest in town, giving him 368 votes to bestow on each of his choices. With the other largest districts each represented by two committee people, that made Mr. O’Neill the most powerful man in the room.
    He at first said he wanted to split his votes between Mr. Potter, Mr. Cohen, and Ms. Burke-Gonzalez, but when he was reminded of the rules, he asked for more time to consider his choice. When the vote came back around to him, he named Mr. Cohen and Ms. Burke-Gonzalez, saying it was clear that Mr. Potter already had the votes to win nomination.
    Kathy Cunningham, president of the Quiet Skies Coalition and executive director of the Village Preservation Society of East Hampton, was also nominated from the floor for town board. “She is a leader” who “strongly supports the same Democratic ideals that we do,” said Naomi Salz, who nominated her.
    Jim McMillan, who seconded the nomination, called Ms. Cunningham’s accomplishments “vast and impressive” and praised her tenacity in fighting for what she believes in. “She won’t stop, which is great. That is exactly what we need.”
    Despite support for both floor nominations, Mr. Potter and Ms. Burke-Gonzalez won fairly decisively. Mr. Potter was a town councilman for eight years and served on the town planning board before that. Ms. Burke-Gonzalez, the outgoing president of the Springs School Board, has served on that board for nine years and is a former member of the Democratic Committee.
    In nominating Mr. Potter, Rameshwar Das described him as “a communicator who brings people together” and said he will bring “competence, stability, and calm” to the town board.
    “He’s the only candidate who has won a seat on the town board before,” said Kammy Wolf, who seconded the nomination. “We know we are getting a record of success.”
    In his acceptance speech later, Mr. Potter thanked the committee for supporting him and said he was “humbled and grateful because you know me, and you have an idea of what I’m going to do in office.” It is time, he said, for the town board to again work cooperatively and to build public support for its initiatives. “The good things that are done are done with public support,” he said.
    Arlene Coulter said she had been asking Ms. Burke-Gonzalez to run for seven or eight years and was thrilled she had finally decided it was time. “She is so good, so effective, so hard-working,” she said in nominating her.
    “For years and years I have wanted her to run for town board,” said Phyllis Mallah, who seconded the nomination. “I wanted her to run for anything in the town.”
    “We have what it takes to lead,” Ms. Burke-Gonzalez said in accepting the nomination. East Hampton is “a special place for special people, but there’s no place for special interests.” She promised to “work hard and always take the high ground.”
    The committee unanimously supported Mr. Cantwell’s nomination. “You have brought to this convention a sense that we have not had in the 30 years I’ve been on the Democratic Committee,” said Larry Smith, who nominated him, calling him “one of the most well-qualified . . . candidates in East Hampton Town’s history.” Mr. Cantwell has been the East Hampton Village administrator for 31 years and served on the town board and as an elected bay constable before that.
    For town justice, the screening committee supported Steven Tekulsky, an East Hampton attorney who ran in the past for justice, but Joe Giannini, an attorney from Springs and a committee member, was nominated from the floor. Committee people from five election districts, including some with the most votes, supported him, but it was not enough for a win over Mr. Tekulsky, whom Bill Taylor called “not only the most qualified candidate, but the most electable candidate.”
    Speaking to the crowd at the end of the convention, Mr. Cantwell congratulated “every person who wanted to be a candidate but was not nominated,” and praised Mr. Cohen, Ms. Cunningham, and Mr. Giannini, as well as his running mates, for their dedication to the town. “Zach, I respect your work for the community, for the Democratic Party, and your efforts running for supervisor,” he said to loud applause. “I invite you to become part of our team to help us lead East Hampton into the future.” He issued the same invitation to Ms. Cunningham and Mr. Giannini.
    “I do hope that will happen and I think I have a lot to offer,” Mr. Cohen said yesterday. “I took Larry at his word. I’ve already lent my support as needed to the campaign committee and some of them have graciously accepted.”
    The committee nominated Eugene DePasquale to run again for town assessor and it cross-endorsed Carole Brennan for town clerk and Steve Lynch for highway superintendent. Both are also running on the Independence and Republican tickets. For town trustee, the committee nominated two incumbents, Deborah Klughers and Stephen Lester, as well as Cate Rogers, Bill Taylor, Edwin Geus, Afton DiSunno, Ira Barocas, and Brian Byrnes.


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Batu Night Spectacular

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Batu Night Spectacular

BNS or Batu Night Spectacular is one of tourism attraction in Batu city. Located in 30 KM on western part of Malang city or 30 minutes drive. Regarding the name, Batu Night Spectacular is open daily for night tourism attractive, it open from 15.00 PM until 02.00 AM. Hence, for those who want to spend the night enjoying the different nuance and fresh air in Batu, BNS is highly recommended to be visit.

The entry fee for BNS is only Rp. 10.000 per person and the visitors will enjoy the facilities inside the venue. Like any other recreational place, BNS have some things to be offered like, the flying bicycle, horror theme spot, the longest go-cart circuit, drag race and slalom, and many more.

BNS also supported by his unique location in the highlands, in other side you can enjoy the “mini Malang” scenery. The sparkling lights at night in Marvelous Malang will escort your leisure time in some cafes. Look around for 4-D cinema, the food court, and the dancing fountains. Please go to night market then find your need, and local souvenirs there. At the food court you can find the musical stage to accompany your meals.

When the night is getting dark, the visitors can enjoy the bright colorful lantern in many shapes and hues. Those lanterns are place in Lanterns Garden with colorful steps among the wet grasses. The lanterns are in the shape of cute things like heron, dragonfly, garden of roses, swan or else.

Moreover, in BNS you can find great experience through the laser show at a giant screen, it will give you another sensations. The screen is about 50 feet above us, the visitors are invited to enjoy their space tour.

Your night will be unforgettable by enjoying the different BNS and have a great experience on it.

More info visit

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Food Safety 3079501466_2e47f588e1

Published on August 8th, 2012 | by Jennifer Kaplan

Rusty Razor Blade Found in Jolly Rancher Candy and Other Food Fears Come True

Amy Hu was reaching for a blue Jolly Rancher when she spotted something white in the bag “which didn’t make sense…” And, boy was she right.

If stories of radioactive oatmeal don’t make you want to grow all your own food, maybe what you find in food made by others according to Huffington Post, Amy Hu from California reached into a bag of Jolly Ranchers and found an old, nasty razor blade half of which was covered in white tape. Not until Hu’s husband posted a photo on Hershey’s facebook page did the candy giant respond. The remedy: offering Hu three bags of free candy. Ugh.

You can read the entire story in HuffPo, but if you really want to have fun, check out the 30 (yes, 30!) photos in the slide show of other mealbreakers (defined as: nasty, non-edible surprises found in food while it is being eaten; often lawsuit-provoking, sometimes fabricated, always disgusting) highlighted at the bottom of the HuffPo post.  The slide show shows your worst gross food fears come true including photos of a dead mouse baked into a loaf of bread and a deep-fried insect stuck to the a McDonalds hash brown.

Just 30 more reasons to know where your food comes from …

Image Credit: Creative Commons photo by Jo Naylor

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About the Author

is a former marketing consultant who decided, at the age of fifty, to turn her hand to creative non-fiction. Jennifer continues to write about sustainable food and wine, the intersection of food and marketing and food politics for EatDrinkBetter.com and is the author of Greening Your Small Business (November 2009, Penguin Group (USA)). She was been named one of The 16 Women You Must Follow on Twitter for Green Business. She has four kids, a dog, a hamster and an MBA - follow her on and .

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A Daughter's Homecoming

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Gabriella Carlini loves her family. But when she returns to Lyndon Point, Washington, to help save their restaurant, she's not sure she's the right person for the job. She's spent her adult life avoiding her heritage. What she needs is a new chef to take the heat off her. Talented and experienced, Zachary Davenport seems to be the answer to her prayers. But he's also a handsome complication. Gabi has always put love on the back burner. Will Zach show her that love and family should always be on the menu?

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An American Duchess

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At the height of the Roaring Twenties, New York heiress Zoe Gifford longs for the freedoms promised by the Jazz Age. Headstrong and brazen, but bound by her father's will to marry before she can access his fortune, Zoe arranges for a brief marriage to Sebastian Hazelton, whose aristocratic British family sorely needs a benefactor.

Once in England, her foolproof plan to wed, inherit and divorce proves more complicated than Zoe had anticipated. Nigel Hazelton, Duke of Langford and Sebastian's austere older brother, is disgraced by the arrangement and looks down upon the raucous young American who has taken up residence at crumbling Brideswell Abbey. Still reeling from the Great War, Nigel is now staging a one-man battle against a rapidly changing world—and the outspoken Zoe represents everything he's fighting against. When circumstances compel Zoe to marry Nigel rather than Sebastian, she does so for love, he for honor. But with Nigel unwilling to change with the times, Zoe may be forced to choose between her husband and her dreams.

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European Commission - Growth

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New rules on Payment Services for the benefit of consumers and retailers Objavljeno: 08/08/2013

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European Commission

Press release

Brussels, 24 July 2013

New rules on Payment Services for the benefit of consumers and retailers

In order to adapt EU payments market to the opportunities of the single market and to support the growth of the EU economy, the European Commission adopted today a package including:

  • A new payment Services Directive ("PSD2")
  • A proposal for regulation on interchange fees for card-based payment transactions

Internal Market and Services Commissioner Michel Barnier said: "Today, the payment market in the EU is fragmented and expensive with a cost of more than 1% of EU GDP or €130 billion a year. These are costs our economy cannot afford. Our proposal will promote the digital single market by making internet payments cheaper and safer, both for retailers and consumers. And the proposed changes to interchange fees will remove an important barrier between national payment markets and finally put an end to the unjustified high level of these fees."

Vice President Joaquín Almunia added: "The interchange fees paid by retailers end up on consumers' bills. Not only are consumers generally unaware of this, they are even encouraged through reward systems to use the cards that provide their banks with the highest revenues. Complementing the enforcement of antitrust rules, the regulation capping interchange fees will prevent excessive levels of these fees across the board. A level playing field will be created for payment services providers, new players will be able to enter the market and offer innovative services, retailers will make big savings by paying lower fees to their banks, and consumers will benefit through lower retail prices."

  • The revised Payment Services Directive brings a number of new important elements and improvements to the EU payment market:
  • It facilitates and renders more secure the use of low cost internet payment services by including within its scope new so-called payment initiation services. These are services that operate between the merchant and the purchaser’s bank, allowing for cheap and efficient electronic payments without the use of a credit card. These service providers will now be subject to the same high standards of regulation and supervision as all other payment institutions. At the same time, banks and all other payment service providers will need to step up the security of online transactions by including strong customer authentication for payments.
  • Consumers will be better protected against fraud, possible abuses and payment incidents (e.g. in case of disputed and incorrectly executed payment transactions). Consumers may be required to face only very limited losses – up to a maximum of 50 EUR (vs 150 EUR currently)- in cases of unauthorised card payments.
  • The proposal increases consumer rights when sending transfers and money remittances outside Europe or paying in non-EU currencies.
  • It will promote the emergence of new players and the development of innovative mobile and internet payments in Europe for sake of EU competitiveness worldwide.

The Regulation on interchange fees, combined with the revised PSD, will introduce maximum levels of interchange fees for transactions based on consumer debit and credit cards and ban surcharges on these types of cards. Surcharges are the extra charge imposed by some merchants for the payment by card and are common notably for purchases of airline tickets. When interchange fees are capped for consumer cards, retailers’ costs for card transactions will be substantially reduced and surcharging will no longer be justified.

During a transition period of 22 months, caps on interchange fees for debit and credit cards will apply to cross-border transactions, i.e. when a consumer uses his card in another country, or when a retailer uses a bank in another country. Thereafter these caps will also apply to domestic transactions. The caps are set at 0.2% of the value of the transaction for debit cards and 0.3% for credit cards. These levels have already been accepted by competition authorities for a number of transactions with cards branded MasterCard, Visa and Cartes Bancaires. For the cards that are not subject to the caps (mainly commercial cards issued to businesses and three party schemes such as American Express or Diners), retailers will be able to surcharge for them or to refuse to accept them. In this way, the costs imposed by these expensive cards can be passed directly on to those who benefit from them rather than being borne by all consumers.

Interchange fees are included in the retailers' costs of receiving card payments and are ultimately paid by consumers through higher retail prices. They are unseen by consumers but cost retailers and ultimately consumers tens of billions of euros every year. The level of the interchange fees varies widely between the Member States, which suggests that they do not have a clear justification and create an important barrier between the national payment markets. Capping the interchange fees will reduce costs for retailers and consumers and help to create an EU-wide payments market. This should also encourage innovation and give more scope for payment providers to offer new services.

The review of the EU payments framework, especially the Payment Services Directive (PSD), and the responses to the Commission's Green Paper ‘Towards an integrated European market for card, internet and mobile payments’ in 2012 (see IP/12/11), led to the conclusion that further measures and regulatory updates, including adjustments to the PSD, are required. This would help the payments framework to better serve the needs of an effective European payments market, fully contributing to a payments environment which nurtures competition, innovation and security. Modernisation of the legislative framework for retail payments was also defined as one of the key actions of the Commission Single Market Act II.

This package responds to major changes in the way Europeans shop and pay. Almost every account holder in the EU possesses a debit payment card and 40% also own a credit card. 34% of EU citizens already shop on the internet and more than 50% possess a smartphone1,which allows them to access the world of mobile payments. Some economy sectors – like the travel industry – even make most of their sales on the internet2.

At the same time, the EU market for cards, internet and mobile payments remains fragmented and faces important challenges that hinder its further development and slow down the EU growth potential (such as divergent cost of payments for consumers and merchants, differences in technical infrastructures or the inability of payment providers to agree on the implementation of common technical standards).

Furthermore, while card payments are becoming more and more widespread, the still prevailing “interchange fees” (fees paid by banks to each other for each card payment) business model promotes high inter-bank fees and impacts costs for retailers and ultimately prices for consumers. It also prevents the emergence of new players.

For more information

See also MEMO/13/719

Contacts :

Antoine Colombani (+32 2 297 45 13)

Chantal Hughes (+32 2 296 44 50)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

Audrey Augier (+32 2 297 16 07)


text:
IEC Georgia held its 2012 Columbus graduation on July 9 at the with 38 graduates, their families, and area contractors in attendance.  Sixteen graduates attained their journeyman certification and are now ready to officially begin their career as electricians.

The celebration began with a catered buffet dinner. The graduates shared this occasion with family and friends as they listened to an uplifting speech from Jay Alexander, president of Alexander Electric.  Alexander thanked the 2012 graduates for all of their hard work and dedication to reach their accomplishment.  Alexander went on to add the importance of the support of family during this process.  This accomplishment is one to be celebrated together.

Betsy Ritch-Reed, president of Ritch Electric and IEC board member, presented certificates to the well-deserving graduates.  David Bill of Columbus Tech College recognized the instructors and this year’s recipient of the Academic Achievement award William Foster of Jordan Electric who maintained a 94.5% average throughout the entire apprenticeship training program.  Great job William Foster, you make a tough job look easy!

IEC appreciates each and every graduate completing the apprenticeship program, and IEC looks forward to witnessing more success they have to come.