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Guest LAW

Remarks by Assistant Secretary for Financial Institutions

Michael S. Barr

CFED Asset Learning Conference

 

Hello, it is great to be here with all of you. What an amazing assemblage of people who care deeply about all Americans being able to save, build assets, and invest in their future and our country's future. The feeling of power and energy in this room is palpable. Thank you to Andrea and the Corporation for Enterprise Development for inviting me to speak with you today.

 

When President Obama came into office a little more than 18 months ago, our financial markets were frozen, our economy was shrinking, and we were facing the worst economic crisis since the Great Depression. We were losing nearly 800,000 jobs a month. Small businesses were closing their doors. Home prices were in free fall. The President broke the back of the financial crisis, stabilized the housing market, and restarted economic growth. Today, the Administration's efforts have stabilized our financial system, started the economy growing again, and reduced the widespread harm brought by the failed policies of the past.

 

Even though the economy is healing and businesses are starting to hire again, it will take time to fully heal the scars of the crisis. We were stuck in a deep hole, and millions of Americans are still suffering from the damage caused by the policies of the past.

 

Over the last decade, the poverty rate climbed to 14.3 percent. Now, 1 in 7 Americans lives in poverty. These families were the least prepared to handle the shock of the recession. Low and moderate income households usually have little or no savings to fall back on when they face a personal economic crisis, such as losing a job, a medical emergency, or the need for a major car repair. These realities are something many of you know all too well. You have seen this first hand with the families you work with.

 

Enabling low- and moderate-income families to build assets will not solve all of these issues, but it will help create greater financial stability for individuals and families. It will allow families to invest in their future by helping them build retirement savings, save for an education, or save to buy a house. Financial stability and the ability to invest in the future is a pragmatic imperative for American families.

 

This administration has moved forward aggressively with asset building initiatives for low-and moderate-income Americans. We, in partnership with many of you, are building the solid foundation required to encourage and empower people to save for the short and long term. Asset building requires three significant components: financial education, financial access, and consumer protection.

Financial Education is critical. People need the financial skills and knowledge to help them make good decisions. The Treasury Department in conjunction with the Financial Literacy and Education Commission has recently issued a draft of core financial competencies. The development of core competencies is a fundamental step in establishing a clear understanding about what individuals should know and the basic concepts program providers should cover. Furthermore, the Core Competencies are particularly important in establishing a baseline of knowledge, which is crucial for both individuals and providers of financial education. This baseline of knowledge addresses the current lack of consistency in various financial literacy programs in identifying goals and objectives including how program success is measured, and what financial information and problem-solving skills participants can be expected to acquire.

 

There is also significant evidence to show that financial education is most effective when it is immediately relevant, is part of a financial decision, and there is a product or services that will allow the individual to carry out their decision, which brings us to the next key piece.

 

Financial education must go hand-in-hand with Financial Access. Individuals need the knowledge to make good financial decisions, but that knowledge is not helpful unless they have access to safe and affordable products. Likewise, if individuals have access, but a poor understanding of how to use the products or services, the chance for misuse or that they will be taken advantage of is much greater. Effective financial education and financial access combine together to create Financial Capability: The ability of individuals to make and execute good financial choices for themselves and their families.

 

I want to talk a bit more about access. First, there is access to basic financial services, because without basic financial access, asset building becomes much more difficult. Low- and moderate-income households in the United States often lack access to basic, mainstream financial services. An estimated 9 million households do not even have a bank account[1] -- the service that is usually the starting point for entry into the formal financial system. Without bank accounts, these families face high costs for conducting basic financial transactions through check cashers and other alternative financial services providers. These families find it more difficult to save and plan financially for the future. Living paycheck to paycheck leaves them vulnerable to medical or job emergencies that may endanger their financial stability, and a lack of longer-term savings undermines their ability to invest in continuing education, purchase a home, or send their children to college. Another 21 million households are underbanked, which means they have a bank account, but are not well served by those accounts and still rely on alternative financial services for money orders, check cashing, and pay-day loans.

 

Mainstream financial services providers have made some strides towards expanding access. But our financial services industry is still bifurcated, with mainstream financial services products inadequately tailored to the needs of the unbanked and underbanked or to low- and moderate- income households. As a result, these households too frequently do not or cannot avail themselves of the opportunities to build assets and create wealth that mainstream financial services products can give people.

 

Furthermore, the current product offerings of many banks are not meeting the needs of the unbanked and underbanked consumers. These products and services need to be able to meet the customers' needs with reasonable costs, and must also be sustainable for banks. Overdraft and other fees are one of the best examples of this mismatch. The FDIC did a terrific study of these programs in 2008, and its results were troubling. The FDIC found that overdraft fees hit low-income areas and households the most, and that 14% of account holders – those living paycheck to paycheck – pay over 90% of total non-sufficient funds (NSF) fees. Debit card transactions comprise the most frequent type of overdraft; in these cases, the amount of the transaction – a median of $20 – is generally lower than the size of the fee – a median of $27. If this loan – generally unasked for – is repaid in two weeks, the APR calculates to over 3,500 percent. In addition, the FDIC's National Survey of the Unbanked and Underbanked in 2009 examined the reasons that previous banked people closed their accounts. 20% of these account closures were due to too many overdrafts or bounced checks or service charges being too high. The previously banked are a significant segment of the unbanked, roughly 50%. These fees are driving low-income people out of the banking system.

 

Our discourse seems to be stuck in this current argument that there can only be a trade-off between banks making money and low-income customers having affordable and safe accounts, and that both cannot happen simultaneously. That is not right. Banks do need to be able to make a reasonable profit in this segment to have a long term sustainable solution to address the unbanked. There is a need to leap forward out of the current paradigm I described. That leap will be fueled by new product and service innovation. There has been significant movement in technology advances. Reloadable prepaid debit cards and bank accounts with only debit card access hold promise as a low-cost financial transaction tool. Mobile applications – such as texting to convey account information or facilitate remote check deposits – are growing and expanding service offerings with the potential to reduce costs.

 

The unbanked and underbanked currently spend billions of dollars on high-priced alternative financial services. The banking industry is undergoing changes and seeking to find new business models to grow and prosper. It appears that there is a great opportunity for innovation that can both address the needs of the unbanked and underbanked in a safe and affordable way, as well as provide profitable and sustainable products for banks. We hope that these innovations will both reduce the cost to serve the customer and provide services that better meet customers' needs.

 

We also need access to asset building resources. The nature and the amount of resources that are devoted to encouraging asset building have a significant impact on asset building. The vast majority of asset building resources benefit middle- and upper-income families, who are able to take advantage of tax subsidies that promote homeownership and retirement savings. There is a need to make more resources available to encourage low and moderate-income individuals to build assets and the Obama Administration is taking steps in that direction.

 

In addition, initiatives for access and asset building must build on what we have learned from behavioral economics about how people make financial decisions and what we can do to encourage them to save. We need to empower consumers to make good choices for themselves and their families. We need to recognize that inertia is a powerful part of human decision. Anything that we can do to create an automated aspect to savings decisions has a lasting impact. How choices are framed and ordered can also have big impacts, which requires us to be intentional about the architecture of choice; defaults are ubiquitous and powerful, so choose the default wisely, and people view gain and loss differently, so an assurance of safety can be an attractive draw to save. These are just a few of the lessons that behavioral economics has taught us about human behavior. These and other lessons should be considered wisely to access and asset building efforts.

The President's 2011 budget begins an effort to commit more resources to asset building for low- and moderate-income people. Let me highlight a few specific proposals.

 

Automatic IRAs would offer convenient access to tax-favored saving for workers whose employers do not currently offer a 401(k) or any other retirement saving plan. Currently, half of American workers have no opportunity to save for retirement at work. Under this proposal, most private sector employees working for employers with more than 10 employees who are not currently covered by a workplace retirement plan would be given the opportunity to save through regular payroll deposits that start and continue automatically, unless the worker elects out, and the savings would be deposited into the worker's own IRA. The employer would receive a temporary tax credit. The automatic IRA approach is intended to help these households save by overcoming the barrier of inertia.

 

Expansion and enhancement of the Saver's Credit will make it more valuable to lower income workers and to cover millions of additional households. The proposal would provide a uniform refundable 50% credit as a direct-savings match for low- and moderate-income workers who contribute to retirement-savings plans, whether or not they have any federal income tax liability. All eligible savers would receive equitable tax treatment.

 

We've proposed reform of asset limit rules that determine eligibility for public assistance programs, so they encourage, rather than discourage, saving. This enables low-income people on public assistance programs to build savings that can be used to invest in their future to help them climb out of poverty.

 

Our proposed Bank On USA initiative will encourage local and state collaborations between government, financial service providers, community organizations, and financial educators to address basic financial access issues and innovative savings approaches.

 

And the Administration has begun to take action on the great opportunity to improve the tax administration process while simultaneously providing opportunity for low- and moderate-income people to get access and build assets. That means:

 

1. Making tax time safer by licensing and examining tax preparers.

2. Eliminating the provision of the debt indicator to banks for use in making refund anticipation loans.

3. Undertaking a tax time account pilot that will launch in 2011, and will inform the structure and value of expanded tax time account efforts in the future.

4. Exploring how to allow individuals to pay for tax preparation directly out of their refund with proper fraud protection.

5. Improving the process to make it possible for people to save part or all of their tax refund by enabling direct purchase of savings bonds in the tax process.

 

All of these efforts must take place on a level playing field. That is why Consumer Protection is another critical building block to asset building for all. Without these changes long-term growth will be weakened and families, businesses, and taxpayers will be exposed to unnecessary risk. The pain our country has endured in the recent past should leave no doubt about the high-cost of failing to have either in place. The Administration worked in partnership with Congress to craft and pass the Dodd-Frank Act that the President signed into law. This law will deliver the financial reform and consumer protection we need. Thank you to all of you who worked in partnership with the Administration to pass this historic legislation.

 

One of the central aspects of this legislation is the creation of the Consumer Financial Protection Bureau, whose sole mission is to look out for American consumers and empower them with the clear and concise information they need to make the financial decisions that are best for them and their families. The Consumer Financial Protection Bureau will create a level playing field for all providers of consumer financial products and services, regardless of their charter or corporate form. It will ensure high and uniform standards across the market. It will help lead efforts to increase financial literacy. It will rein in misleading sales pitches and hidden traps, and foster competition on the basis of price and quality. In short it will enable markets to work fairly based on clear information.

 

At the Treasury Department, we have been working aggressively on the creation of this new bureau. We are determining how to consolidate core authorities that are currently fragmented across several federal agencies. We are working to ensure fairness and transparency for mortgages, credit cards, and other consumer financial services. We are taking a hard look at large nonbank providers of other consumer financial services, such as credit bureaus and debt collectors. We are planning for the provision of consumer assistance and education nationwide, including literacy programs, online resources, and a consumer complaints hotline. We are working to establish the offices that will focus on protecting military families and seniors that will exist within the Consumer Financial Protection Bureau. In sum, we are launching the Consumer Financial Protection Bureau to empower American families.

 

Those are the three major building blocks to help spur asset building for all: financial education, financial access, and consumer protection.

 

There is another building block that is as important, if not more important, than all the rest. This is the Asset Building Movement. That is all of you. You are what has gotten us to this moment. We have accomplished so much and have the opportunity to accomplish much more. If it were not for all of you we would not be where we are today.

 

1.) You have organized people to fight for asset building policies.

 

2.) You have encouraged people to utilize programs that work. For example, tax time savings bonds, IDAs, and the EITC.

 

3.) You have supported local Bank On efforts to foster savings and build assets.

 

4.) You have innovated and taken good risks on new approaches.

 

5.) You have demonstrated that the best ideas for getting to scale are ones that are sustainable for businesses as well as individuals.

 

6.) Statistics and evaluation are important and what good programs should be built on, but you have also told the individual stories of success that move people to action.

 

Thank you again for the opportunity to speak with you today. You are all amazing and we look forward to working together with you to build a Stronger America. An America where working hard and playing by the rules means security for our families and hope for our future. Where firms compete based on price and quality, not tricks and traps. Where old fashioned values of thrift are rewarded. And where once again America leads the world. Thank you very much.

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Guest LAW

Secretary of Treasury Timothy F. Geithner Remarks at the Brookings Institution

 

This weekend, finance officials from around the world will gather in Washington, along with the senior management of the International Monetary Fund and World Bank. The G-20 Finance Ministers and Central Bank Governors meet in Korea later this month, followed by the G-20 Heads of State in November.

 

I want to outline our objectives for these meetings.

 

A period of unprecedented international cooperation

 

Two years ago, the world economy was in the grip of an economic crisis on a scale not seen since the Great Depression.

 

The United States and its partners in other leading economies, in an unprecedented feat of peacetime economic cooperation, joined forces to launch a powerful, dramatic response.

 

Together, we put in place a powerful program of financial support – classic fiscal measures of tax cuts and investment, combined with monetary policy actions by central banks, and a variety of creative actions to stabilize our financial systems – to bring the global economy out of freefall and on a path to growth.

 

We mobilized hundreds of billions of dollars in financial support for and through the international financial institutions for investments in emerging and developing economies.

 

We committed to keep markets open to trade and investment, and together we honored that commitment in the face of strong political pressure.

 

We came together to embrace a common framework for reform of the global financial system.

We passed sweeping reforms of the U.S. financial system, and the world's central banks and supervisors reached agreement just two weeks ago on a very tough set of global standards for capital to limit leverage in the major global financial institutions.

 

These decisions required considerable trust and political resolve. And they have been effective in restarting economic growth and stabilizing financial markets. Global trade is now almost back to pre-crisis levels.

 

Each of our economies is stronger today than would otherwise have been possible, because of the effectiveness of this joint strategy. And the financial reforms now underway will substantially reduce the risk of damage from future financial crises.

 

The Growth Challenge

 

What are the main challenges ahead?

 

The most important policy question we confront together is how to strengthen the pace of growth and repair, and how to do so in a way that provides the basis for a more balanced and therefore more sustainable global economic recovery.

 

This is not a challenge that is best resolved by nations acting independently. In the heat of the crisis, we all recognized that our actions would be more powerful if we acted together. Even though the most dangerous part of the crisis is behind us, we are still in a place where we can achieve better overall growth outcomes if we make policy in a cooperative framework.

 

I want to offer a few suggestions on the policy challenges ahead in three areas: growth, exchange rate cooperation, and reform of the architecture of economic cooperation.

 

First, on economic growth. The IMF forecasts the world economy will grow at a respectable annual rate of around four percent in 2011. Growth is very strong in many of the major emerging economies. In the major advanced economies, however, output and employment are still substantially below the pre-crisis levels, and the pace of recovery has been slower, with economic growth now running at a pace that is close to potential growth rates and not rapid enough to repair quickly the substantial economic damage remaining from the crisis.

 

Economic recoveries that follow financial crises are typically slower than those that follow other types of recessions. This is because of the headwinds to growth that are generated by the necessary adjustments in asset prices and in reducing financial leverage. As financial institutions rebuild their balance sheets and households reduce debt and raise savings, spending is slower to recover. Firms, cautious after being burned by the financial panic, are less willing to invest and to hire because of uncertainty about future strength in demand for their products.

 

Different economies face different challenges and different constraints on the scope for economic policy to strengthen growth. However, concern about the near-term limits to more growth-oriented economic policies are greatly exaggerated. Most of us still have the capacity to take additional actions that would improve both short-run and long-run growth prospects.

 

The greatest risk to the world economy today is that the largest economies underachieve on growth. We need to continue providing well-targeted support for the recovery in the near term even as we put in place plans to help ensure fiscal sustainability over the longer term.

 

And for the recovery to be sustainable, there must also be a change in the pattern of global growth. For too long, many countries oriented their economies toward producing for export rather than consuming at home, counting on the United States to import many more of their goods and services than they bought of ours.

 

The United States will do its part to achieve this adjustment. Private savings have increased significantly, and, as the recovery strengthens, we will bring down our fiscal deficits to a sustainable level.

 

But as America saves more, countries overly reliant on exports to us for their own growth will need to change their policies, or else global growth will slow and all of us will be worse off. Countries that chronically run large surpluses need to undertake policies that will boost their domestic demand.

 

The flexibility each major economy has to provide a greater catalyst to growth in the near term or to slow the pace of near-term fiscal restraint depends on the size of its long-term fiscal problems and the credibility of its plans to address those problems over the medium term. Even if the risks to a sustained global recovery look relatively low, it makes sense for policy makers in the major economies to continue to focus on strengthening growth, rather than risking a premature shift to restraint.

 

That brings me to the second policy challenge: we believe it is very important to see more progress by the major emerging economies to more flexible, more market-oriented exchange rate systems. This is particularly important for those countries whose currencies are significantly undervalued.

This is a problem because when large economies with undervalued exchange rates act to keep the currency from appreciating, that encourages other countries to do the same.

 

This sets off a damaging dynamic, described first by my former colleague Ted Truman, as "competitive non appreciation." Over time, more and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies. The collective impact of this behavior risks either causing inflation and asset bubbles in emerging economies, or else depressing consumption growth and intensifying short-term distortions in favor of exports.

This is a multilateral problem. It is unfair to countries that were already running more flexible regimes and let their currencies appreciate. And it requires a cooperative approach to solve, because emerging economies individually will be less likely to move, unless they are confident other countries would move with them.

This problem exposes once again the need for an effective multilateral mechanism to encourage economies running current account surpluses to abandon export-oriented policies, let their currencies appreciate, and strengthen domestic demand. This is a necessary complement to the adjustments being undertaken by countries running current account deficits. A cooperative rebalancing of policy in this direction would be better for overall growth.

 

This issue was well-known to the group of economists who gathered in Bretton Woods, New Hampshire, to refashion the war-ravaged global financial system in 1944. The Articles of Agreement of the IMF, drafted at that conference, contain a now-obscure paragraph calling on the Fund to issue reports on countries with "scarce currencies"--what today we would call countries running persistent surpluses--"setting forth the causes of the scarcity and containing recommendations designed to bring it to an end." That clause now reads like a relic of a bygone monetary era. But the problem it was drafted to address--the threat to global financial stability posed by persistent, large surpluses--is as salient today as it was then.

This brings me to a third issue on the international agenda, the reform of the architecture of economic cooperation.

 

When the world's leaders met in London in April of 2009 and then in Pittsburgh in September that year to set a strategy for confronting the crisis, they agreed to begin work on a new "Framework" for global growth and to reform the architecture for cooperation.

 

The Framework, called the "Framework for Strong, Sustainable and Balanced Growth," was designed to create stronger incentives for rebalancing growth, as the world recovered from the crisis, with higher savings in countries like the United States, complemented by reforms to strengthen domestic demand in surplus countries like China, other emerging economies, Germany, and Japan.

 

Alongside this "Framework" we agreed to give emerging economies a greater stake in the most important institutions for economic and financial cooperation, to increase the resources available to the international financial institutions, and to make the G-20 the centerpiece of cooperation, replacing the role traditionally played by the G-7.

 

We agreed to pursue these two paths in parallel. Each involved a change in the rights and responsibilities of the major economies, both emerging and advanced.

 

We have made some progress on the "Framework," but that achievement is at risk of being undermined by the limited extent of progress toward more domestic demand-led growth in the surplus countries and by the extent of foreign exchange intervention as countries with undervalued currencies lean against the pressures for appreciation.

 

On the governance front, we are now making progress toward agreement on a very important set of reforms to create a stronger IMF. These changes would strengthen the financial position of the Fund, allow it to respond more quickly and forcefully to future crises, and give the fastest growing emerging economies greater weight in the institution and a greater share of seats on the Board.

 

We want to make sure these changes go far enough in rebalancing rights and responsibilities of the members of the institutions. And for this reason, an agreement to modernize the governance of the IMF needs to be accompanied by more progress in encouraging countries, particularly the surplus countries, to pursue more market-oriented exchange rate policies and policies that will reduce reliance on exports and strengthen domestic demand.

 

We will be exploring with the other major economies some suggestions on how best to advance these objectives.

 

I want to conclude by emphasizing that we recognize the special responsibility of the United States for contributing to a more stable global financial system and a more balanced and sustainable pattern of growth.

 

We have moved aggressively to do our part to help bring the world out of crisis. We are working very hard to repair our financial system, to fix what was broken, and to reduce the future risk of financial crises here at home. We have seen a very significant increase in private savings by households. Our external deficit has fallen sharply, and we are financing at home a much larger share of the fiscal deficits we inherited.

 

We still have a lot of challenges ahead of us to strengthen growth and to restore fiscal sustainability. And we expect to work closely with Congress in the months ahead on how best to move forward.

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Guest August

Here is some good economic news, manufacturer orders increased in September by 2.1%, according to the Census Bureau. This is the biggest increase since January. It also appears that the summer slowdown is in the sector's past. The report released today is quite positive.

 

http://www.census.gov/manufacturing/m3/

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This is the type of news I would like to see everyday. Thank you Intel...

 

Intel Corporation announced today that the company will invest between $6 billion and $8 billion on future generations of manufacturing technology in its American facilities. The action will fund deployment of Intel’s next-generation 22- nanometer (nm) manufacturing process across several existing U.S. factories, along with construction of a new development fabrication plant (commonly called a “fab”) in Oregon. The projects will support 6,000 to 8,000 construction jobs and result in 800 to 1,000 new permanent high-tech jobs. “Today’s announcement reflects the next tranche of the continued advancement of Moore’s Law and a further commitment to invest in the future of Intel and America,” said Intel President and CEO Paul Otellini. “The most immediate impact of our multi-billion-dollar investment will be the thousands of jobs associated with building a new fab and upgrading four others, and the high-wage, high-tech manufacturing jobs that follow.”

 

The PC industry is achieving a significant milestone this year with 1 million PCs shipping per day. The upgraded fabs create the capacity for the continued growth of the PC market segment and additional computing markets Intel is addressing, such as mobile and embedded computing.

 

The new investments reinforce Intel’s leadership in the most advanced semiconductor manufacturing in the world. Intel’s brand-new development fab in Oregon – to be called “D1X” – is scheduled for R&D startup in 2013. Upgrades are also planned for a total of four existing factories in Arizona (known as Fab 12 and Fab 32) and Oregon (known as D1C and D1D).

 

“Intel makes approximately 10 billion transistors per second. Our factories produce the most advanced computer technology in the world and these investments will create capacity for innovation we haven’t yet imagined,” said Brian Krzanich, senior vice president and general manager of Intel’s Manufacturing and Supply Chain. “Intel and the world of technology lie at the heart of this future. Contrary to conventional wisdom, we can retain a vibrant manufacturing economy here in the United States by focusing on the industries of the future.”

 

While Intel generates approximately three-fourths of its revenues overseas, it maintains three-fourths of its microprocessor manufacturing in the United States. This new investment commitment also allows the company to maintain its existing manufacturing employment base at these sites.

 

This new capital expenditure follows a U.S. investment announcement made in February 2009 to support state-of-the-art upgrades to its manufacturing process. Those upgrades resulted in 32nm process technology which has already produced computer chips being used today in PCs, servers, embedded and mobile devices around the world. Intel’s first 22nm microprocessors, codenamed “Ivy Bridge,” will be in production in late 2011 and will boost further levels of performance and power efficiency. By continuing to advance manufacturing process technology, additional features and functions can be integrated and enable devices with sleeker designs, higher performance and longer battery life at lower costs for users.

 

 

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Guest Bennett Gamble

Statement of Secretary of Labor Hilda L. Solis on October employment numbers

 

WASHINGTON — Secretary of Labor Hilda L. Solis issued the following statement on the October 2010 Employment Situation report released today:

 

"This past October, nonfarm payroll employment increased by 151,000 jobs, with 159,000 jobs added in the private sector. The unemployment rate remained unchanged at 9.6 percent.

 

"One year ago, I reported an unemployment rate of 10.1 percent — the highest rate we had seen since 1983. Since then, the actions taken by the Obama administration have lowered unemployment by half a point, reflecting in more than 1.1 million jobs created in the private sector this year.

 

"While the economy continues to grow, there is more work that needs to be done to get Americans back to work. Everyone agrees on the problem. Both parties must now come together to solve it.

 

"With millions of Americans still looking for work, now is not the time to cut key safety net programs like Unemployment Insurance. The Emergency Unemployment Compensation program is set to expire at the end of November. If that happens, 2 million people will lose benefits in December and 6 million by the end of next year.

 

"While we are on the path of job creation, we cannot forget the millions of Americans who, through no fault of their own, are still unemployed and looking for work. Safety net programs like the Unemployment Insurance program have long been known to be a cost-effective way of keeping families afloat during difficult economic periods, while also serving to boost the overall economy.

 

"With nearly five job seekers for every job opening, many people will necessarily have to rely on the Unemployment Insurance system until the economy returns to pre-recession levels. We should not allow Americans to suffer when they have done nothing wrong.

 

"Making progress on the very serious problems facing this country will require everyone to put politics aside and work together to continue to create jobs, grow the economy and provide temporary help to those who are looking for work. I look forward to playing a constructive role in that process."

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Guest LAW

The Federal Reserve Board on Thursday established the Office of Financial Stability Policy and Research and appointed Board economist J. Nellie Liang as its director.

 

The office will bring together economists, banking supervisors, markets experts, and others in the Federal Reserve who will be dedicated to supporting the Board's financial stability responsibilities. The office will develop and coordinate staff efforts to identify and analyze potential risks to the financial system and the broader economy, including through the monitoring of asset prices, leverage, financial flows, and other market risk indicators; follow developments at key institutions; and analyze policies to promote financial stability. It will also support the supervision of large financial institutions and the Board's participation on the Financial Stability Oversight Council.

 

"The Office of Financial Stability Policy and Research brings together a skilled group of people with a wide range of expertise to focus solely on financial stability," Federal Reserve Chairman Ben S. Bernanke said. "The financial stability team will play an important role in implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, in our oversight of systemically important financial institutions, and in our overall surveillance of the financial markets and the economy. I am pleased that such a strong economist and leader as Nellie is leading this group."

 

Liang joined the Board in 1986, acting most recently as a senior associate director in the Division of Research and Statistics. In that role, she has led a group of economists focused on the intersection of economics and finance, including oversight of capital markets, financial institutions, consumer finance, and financial flows. Liang was a key participant in crafting the Federal Reserve's response to the financial crisis and helped lead the Supervisory Capital Assessment Program, or bank stress tests, which helped increase public confidence in the banking system in 2009. Liang has a Ph.D. in economics from the University of Maryland and an undergraduate degree in economics from the University of Notre Dame.

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Guest LAW

Remarks by the President to U.S.-India Business Council and Entrepreneurship Summit

 

THE PRESIDENT: Thank you very much. (Applause.) Please, everyone be seated. Good afternoon, everyone. Namaste. Thank you all for an extraordinarily warm welcome. And before I get started, I just want to acknowledge some outstanding public servants, some wonderful dignitaries who are in the room. Anand Sharma, our Commerce and Industry Minister here in India. (Applause.) Khurshid Salman, the Minister of Corporate Affairs and Minority Affairs, who’s here. (Applause.) Dr. Montek Singh Ahluwalia, State Planning Commission Deputy Chairman. (Applause.) Gary Locke, who is the Secretary of Commerce for the United States. (Applause.) Terry McGraw, the chairman of the U.S.-India Business Council. (Applause.) Hari Bhartia, the president of the Confederation of Indian Industries. (Applause.) And Rajan Bharti Mittal, president of the Federation of Indian Chambers of Commerce and Industry. (Applause.)

 

On behalf of my wife Michelle and myself, thank you to the people of Mumbai and the people India for the incredible hospitality you have already shown just in the few hours since I've arrived in this magnificent country.

 

We are especially honored to be here as you celebrate Diwali. (Applause.) Some of you may know this. Last year, I was honored to become the first American President to help celebrate the Festival of Lights in the White House. (Applause.) And I know that today, families are lighting their Diyas and giving thanks for their blessings and looking ahead to the new year. So to all of you who are observing this sacred holiday here and around the world, Happy Diwali and a Saal Mubarak. (Applause.)

 

I want to thank all the organizations that have brought us together today, as well as the business leaders, the CEOs, the government officials who have joined us here in Mumbai. I just had some incredibly productive discussions with American business leaders and Indian entrepreneurs, and today I want to speak with you about why we all benefit from the strengthening ties between our nations.

 

This is my first trip to India, but this will be my longest visit to another country since becoming President. (Applause.) And that’s because I believe that the relationship between the United States and India will be one of the defining and indispensable partnerships of the 21st century.

 

Our nations are the two largest democracies on Earth. We are bound by a common language and common values; shared aspirations and a shared belief that opportunity should be limited only by how hard you’re willing to work, only by how hard you are willing to try. Trade and commerce between our people has been happening for centuries -- even before we were independent nations. Indian immigrants crossed oceans to work on farms in the United States, and later generations came to practice medicine, and do cutting-edge research, and to start businesses. American researchers, in turn, partnered with Indian scientists to launch the Green Revolution that transformed life for generations of Indians. Americans have helped build India, and India has helped to build America.

 

Today, your country is one of the fastest-growing economies in the world. And while there are many amazing success stories and rapidly expanding markets in Asia, the sheer size and pace of India’s progress in just two decades is one of the most stunning achievements in human history. (Applause.) This is a fact. Since your reform of the licensing raj and embrace of the global economy, India has lifted tens of millions of people from poverty and created one of the largest middle classes on the planet.

 

You are now a nation of rapid growth and rising incomes and massive investments in infrastructure and energy and education. In the coming decades, you will be the world’s most populous nation, with the largest workforce and one of the largest economies in the world. Now, undoubtedly, that means that the United States and India will engage in a healthy competition for markets and jobs and industries of the future. But it also offers the prospect of expanded commercial ties that strongly benefit both countries.

 

The United States sees Asia -– and especially India -– as a market of the future. We don’t simply welcome your rise -– as a nation, and a people -- we ardently support it. We want to invest in it. And I’m here because I believe that in our interconnected world, increased commerce between the United States and India can be and will be a win-win proposition for both nations. (Applause.)

 

I realize that for some, this truth may not be readily apparent. I want to be honest. There are many Americans whose only experience with trade and globalization has been a shuttered factory or a job that was shipped overseas. And there still exists a caricature of India as a land of call centers and back offices that cost American jobs. That's a real perception. Here in India, I know that many still see the arrival of American companies and products as a threat to small shopkeepers and to India’s ancient and proud culture.

 

But these old stereotypes, these old concerns ignore today’s reality: In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards in both our countries. And that is the truth. (Applause.)

 

As we look to India today, the United States sees an opportunity to sell our exports in one of the fastest-growing markets in the world. For America, this is a jobs strategy. As we recover from this recession, we are determined to rebuild our economy on a new, stronger foundation for growth. And part of that foundation involves doing what America has always been known for: discovering and creating and building the products that are sold all over the world. That’s why I’ve set a goal of doubling America’s exports over the next five years -– because for every $1 billion in exports, thousands of jobs are supported at home.

 

And already, our exports to India have quadrupled in recent years -– growing much faster than our exports to many other countries. The goods we sell in this country currently support tens of thousands of manufacturing jobs across the United States -– from California and Washington to Pennsylvania and Florida. And that doesn’t even include all the American jobs supported by our other exports to India -– from agriculture to travel to educational services.

 

As we speak, American-made machinery is helping India improve its infrastructure, including the new airport here in Mumbai where I landed this morning. This year, there was a new sight on India’s highways -– American-made Harley-Davidson motorcycles. (Laughter.) A growing number of American-made aircraft are taking flight in your skies. And soon, there will be more.

 

That’s because today, just moments before I arrived here, several landmark deals were sealed between the United States and India. Boeing, one of America’s largest companies, is on track to sell India dozens of commercial and cargo aircraft. General Electric, another American company, will sell more than a hundred advanced jet engines. And I’m pleased that two U.S. firms are finalists for a major locomotive tender. Now, these are just a few of the more than 20 deals being announced today, totaling nearly $10 billion in U.S. exports. (Applause.)

 

From medical equipment and helicopters to turbines and mining equipment, American companies stand ready to support India’s growing economy, the needs of your people, and your ability to defend this nation. And today’s deals will lead to more than 50,000 jobs in the United States -- 50,000 jobs. (Applause.) Everything from high-tech jobs in Southern California to manufacturing jobs in Ohio.

 

Now, these are major deals that are significant for both our nations. But our trade relationship is not just about what America sells India. It’s also about Indian investment in America is doing. Indian investment in America is among the fastest growing of any country. In recent years, Indian companies have invested billions of dollars in the United States -- in American machinery, manufacturing, mining, research, technology. Today, these investments support tens of thousands of American jobs.

 

And at the same time, hundreds of American companies -- including many small businesses -- are investing in India; not just in telecommunications, but in industries from clean energy to agriculture. This means more choices for Indian consumers and more jobs for Indians and Americans.

 

Our relationship is also about more than the goods that we sell or the investments we make -- it’s about the innovative partnerships we forge in the name of progress. Before I came here, I had a fascinating meeting. I met with business leaders from both our countries, including some incredibly young Indian entrepreneurs. And what’s fascinating is the way that they are now partnering to take technology that has had one application and use in the United States and found entirely new uses and new businesses models here, in India.

 

They’re working together to make cell towers across India that can run on solar, and not diesel. They’re putting American technology into Indian electric cars. They’re trying to bring new filtration systems and clean drinking water to rural India; and they're trying to develop better drugs for diseases like malaria. These are examples of American companies doing well and Indian companies doing well.

 

And these partnerships remind us that by pursuing trade and commerce, we are unleashing the most powerful force the world has ever known for eradicating poverty and creating opportunity -- and that's broad-based economic growth.

 

Now, despite all this progress, the economic relationship between the United States and India is still one of enormous untapped potential. Of all the goods that India imports, less than 10 percent come from the United States. Of all the goods that America exports to the world, less than 2 percent go to India. Our entire trade with your country is still less than our trade with the Netherlands -– this is a country with a smaller population than the city of Mumbai. As a result, India is only our 12th largest trade partner.

 

I have no doubt that we can do better than that -– we can do much better. There’s no reason this nation can’t be one of our top trading partners. And that’s why we want to work together with you to remove the barriers to increased trade and investment between our nations.

 

In the United States, we’re committed to doing our part. With India and our other G20 partners, we’ve resisted the protectionism that would have plunged the global economy even deeper into recession. Today, our country remains one of the most open economies in the world. And while I make no apologies about doing whatever it takes to encourage job creation and business investment in America, I still work to make sure our efforts don’t unfairly target companies and workers from this nation or any nation.

 

And to further increase our exports to places like India, we’re marshalling the full resources of the United States government to help our companies sell their goods and services in other markets. We’re increasing export financing for small and medium-sized businesses. We’re being a better advocate for our businesses. We’re increasing our trade missions. In fact, my Secretary of Commerce, Gary Locke, will be leading another trade mission to India in the next few months. And we’re reforming our export control system, so that even as we strengthen our national security, we make sure that unnecessary barriers don’t stand in the way of high-tech trade between our countries. Today, I’m pleased to announce that we will work with India to fundamentally reform our controls on exports, which will allow greater cooperation in a range of high-tech sectors and strengthen our nonproliferation efforts. (Applause.)

 

So we're taking the necessary steps to strengthen this relationship. India can also do its part. Over the past two decades, it has become much easier for companies to do business and invest here in India. It was striking talking to some of the American CEOs who are here who’ve come frequently over decades and seen the incredible progress that's been made. But I don't think it’s any secret that infrastructure, regulatory barriers and other issues of uncertainty still pose some serious challenges.

 

Today, India is making major investments in its infrastructure and creating greater transparency to support growth and entrepreneurship. Going forward, that commitment must be matched by a steady reduction in barriers to trade and foreign investment -– from agriculture to infrastructure, from retail to telecommunications. Because in a global economy, new growth and jobs flow to countries that lower barriers to trade and investment.

 

These are steps we can take together to strengthen the economic ties between our nations -– ties that hold incredible promise for our people and our future -– the promise of new jobs, new industries and new growth. Whether or not that promise is fulfilled depends on us -– on the decisions we make and the partnership we build in the coming years.

 

We must admit it won’t always be an easy road, but as I stand here today, I can tell you that I’m absolutely confident we will meet this challenge because -- (applause) -- because in our two nations, I see the fundamental ingredients to success in the 21st century.

 

I’m confident because we both cherish the entrepreneurial spirit that empowers innovation and risk-taking, and allows them to turn a good idea into a new product or company that changes the world. And we have examples of Indian entrepreneurs and American entrepreneurs sitting right here who’ve already begun to do that.

 

And I’m confident because we both know that for those businesses to thrive, our nations need to invest in science and technology, in research and development, and an infrastructure for the 21st century.

 

I’m confident because we both recognize that knowledge is the currency of the future, and that we must give our children the skills and education that success requires in a global economy. (Applause.)

 

And I’m confident because our countries are blessed with the most effective form of government the world has ever known: democracy. (Applause.) Even if it can be slow at times. Even if it can be messy. Even if, sometimes, the election doesn’t turn out as you’d like. (Laughter and applause.)

 

For we know that when governments are accountable to their people, their people are more likely to prosper; and that, over the long run, democracy and economic growth, freedom in the political sphere and freedom in the economic sphere go hand in hand. We believe that. (Applause.)

 

What gives me the most confidence about our future is our greatest resource -– the drive and ingenuity of our people: workers and entrepreneurs- students and innovators; Indians and Americans, including the nearly 3 million Indian Americans who bind our nations together. (Applause.)

 

For despite all the sweeping changes of the last few decades –- from the reform of the licensing raj to the technological revolutions that continue to shape our global economy -– it has been people who have driven our progress. It is individual men and women like you who put their shoulder to the wheel of history and push. An American scientist who discovers an agricultural breakthrough. An Indian engineer who builds the next-generation electric car. A small business owner in Detroit who sells his product to a new company in New Delhi. And all the Mumbaikars who get up every day in this City of Dreams to forge a better life for their children –- from the boardrooms of world-class Indian companies to the shops in the winding alleys of Dharavai.

 

This is the spirit of optimism and determination that has driven our people since before we were nations -– the same spirit that will drive our future. And that's why I’m thrilled to be in India and with you here today. And that's why I’m confident that we can and will forge new economic partnerships and deliver the jobs and broad-based growth that our peoples so richly deserve. And I am absolutely certain that the relationship between the United States and India is going to be one of the defining partnerships of the 21st century.

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Guest AMTDA

September U.S. manufacturing technology consumption totaled $399.76 million, according to AMTDA, the American Machine Tool Distributors’ Association and AMT - The Association For Manufacturing Technology. this total, as reported by companies participating in the USMTC program, was up 66.1% from August and up 156.8% when compared with the total of $155.69 million reported for September 2009. With a year-to-date total of $2,090.27 million, 2010 is up 74.1% compared with 2009.

 

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

 

“September 2010 was a watershed in the recovery from the recession of 2008-9. The 1,992 units sold this month is the highest number since September of 2008 and demonstrates the resilience and staying power of the U.S. manufacturing base,” said Peter Borden, AMTDA President. “More remarkably, this was done while many factories are running below the capacity levels that require capital goods purchases, despite the tight credit, and in spite of questions about government debt and potential tax increases. The catalysts of the successful IMTS, the weaker dollar, and the passage of bonus depreciation paid surprising and long awaited dividends.”

 

The United States Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of manufacturing technology, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment. Analysis of machine tool consumption provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

 

U.S. manufacturing technology consumption is also reported on a regional basis for five geographic breakdowns of the United States.

 

Northeast Region

 

Manufacturing technology consumption in the Northeast Region in September stood at $64.44 million, 66.3% higher than August’s $38.76 million and 77.3% above the September 2009 total. The year-to-date total of $362.73 million was 53.4% more than the comparable figure for 2009.

 

Southern Region

 

September manufacturing technology consumption in the Southern Region totaled $66.85 million, up 119.9% when compared with the $30.40 million total for August and up 389.4% when compared with September a year ago. The $308.65 million 2010 year-to-date total was 86.4% higher than the total for the same period last year.

 

Midwest Region

 

At $121.80 million, September manufacturing technology consumption in the Midwest Region was 49.0% more than August’s $81.75 million and up 157.6% when compared with last September. The $629.19 million 2010 year-to-date total was 84.4% above the 2009 total at the same time.

 

Central Region

 

Manufacturing technology consumption in the Central Region in September stood at $114.99 million, 77.0% more than the August total of $64.95 million and 238.3% higher than the total for September 2009. With a year-to-date total of $561.03 million, 2010 was up 94.0% when compared with 2009 at the same time.

 

Western Region

 

With a total of $31.68 million, September Western Region manufacturing technology consumption was up 27.5% when compared with August’s $24.84 million and up 29.8% when compared with September a year ago. At $228.66 million, 2010 year-to-date was 36.0% higher than the comparable figure a year ago.

 

http://www.amtda.org

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Guest ISM

Economic activity in the manufacturing sector expanded in December for the 17th consecutive month, and the overall economy grew for the 20th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

 

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector continued its growth trend as indicated by this month's report. We saw significant recovery for much of the U.S. manufacturing sector in 2010. The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle. Additionally, manufacturers that export have benefitted from both global demand and the weaker dollar. December's strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011."

 

PERFORMANCE BY INDUSTRY

 

Of the 18 manufacturing industries, 11 are reporting growth in December, in the following order: Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Textile Mills; Plastics & Rubber Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Chemical Products. The four industries reporting contraction in December are: Nonmetallic Mineral Products; Paper Products; Printing & Related Support Activities; and Miscellaneous Manufacturing.

 

WHAT RESPONDENTS ARE SAYING ...

 

* "Company outlook looks positive into 2011. Solid revenue growth across the globe driven by strong volume in Q3 and Q4 2010." (Chemical Products)

* "We continue to see strong demand for our product in Europe and Asia." (Electrical Equipment, Appliances & Components)

* "The end of the year is surprisingly busy." (Computer & Electronic Products)

* "Business remains slow, while vendors clamor for increases that should have no foundation in economics." (Nonmetallic Mineral Products)

* "Strong pressure still exists on raw material prices in almost every area. It is unclear as to whether they can get them." (Plastics & Rubber Products)

 

COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY

Commodities Up in Price

 

Aluminum (4); Brass; Caustic Soda (5); Chemicals (3); Copper (5); Copper Based Products (2); Corn (4); Corrugated Containers (10); Diesel; Electronic Components; Gasoline; High Density Polyethylene; Natural Gas*; Nickel (2); PET; Plastic Resins (2); Polyester; Polyethylene (4); Resins (2); Soybean Oil (2); Stainless Steel (2); Starch; Steel (4); Steel Products; Sulfur; Tin Plate; Titanium Dioxide (2); and Wheat.

 

Commodities Down in Price

 

Natural Gas* (2) is the only commodity reported down in price.

 

Commodities in Short Supply

 

Cocoa Powder (4) is the only commodity reported in short supply.

 

Note: The number of consecutive months the commodity is listed is indicated after each item.

* Reported as both up and down in price.

 

PMI

 

Manufacturing continued to grow in December as the PMI registered 57 percent, an increase of 0.4 percentage point when compared to November's reading of 56.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

 

A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 20th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 17th consecutive month. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (57.3 percent) corresponds to a 5.1 percent increase in real gross domestic product (GDP). In addition, if the PMI for December (57 percent) is annualized, it corresponds to a 5 percent increase in real GDP annually."

 

New Orders

ISM's New Orders Index registered 60.9 percent in December, which is an increase of 4.3 percentage points when compared to the 56.6 percent reported in November. This is the 18th consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

 

The 10 industries reporting growth in new orders in December — listed in order — are:

 

Apparel, Leather & Allied Products; Primary Metals; Furniture & Related Products; Computer & Electronic Products; Machinery; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Transportation Equipment. T

 

The four industries reporting decreases in new orders in December are:

 

Nonmetallic Mineral Products; Paper Products; Chemical Products; and Printing & Related Support Activities.

 

Production

ISM's Production Index registered 60.7 percent in December, which is an increase of 5.7 percentage points from the November reading of 55 percent. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. This is the 19th consecutive month the Production Index has registered above 50 percent.

 

The nine industries reporting growth in production during the month of December — listed in order — are:

 

 

Apparel, Leather & Allied Products; Computer & Electronic Products; Primary Metals; Furniture & Related Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Machinery; Transportation Equipment; and Chemical Products.

 

 

The six industries reporting a decrease in production in December — listed in order — are:

 

 

Nonmetallic Mineral Products; Paper Products; Textile Mills; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; and Printing & Related Support Activities.

 

Employment

ISM's Employment Index registered 55.7 percent in December, which is 1.8 percentage points lower than the 57.5 percent reported in November. This is the 13th consecutive month of growth in manufacturing employment. An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

 

Of the 18 manufacturing industries, nine reported growth in employment in December in the following order:

 

 

Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; and Paper Products.

 

 

The five industries reporting a decrease in employment during December are:

 

Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Printing & Related Support Activities; and Textile Mills.

 

http://www.ism.ws/ISMReport/?navItemNumber=4892

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This is great news. If enough Americans believe that we should be making jobs in the United States it will happen. Patriotic peer pressure.

 

http://online.wsj.co...2618821224.html

 

U.S. manufacturing, viewed as a lost cause by many Americans, has begun creating more jobs than it eliminates for the first time in more than a decade.As the economy recovered and big companies began upgrading old factories or building new ones, the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997, government data show. That total will grow again this year, according to economists at IHS Global Insight and Moody's Analytics.

 

Among others, major auto makers—both domestic and transplants—are hiring. Ford Motor Co. announced last week it planned to add 7,000 workers over the next two years. The economists' projections for this year—calling for a gain of about 2.5%, or 330,000 manufacturing jobs—won't come close to making up for the nearly six million lost since 1997. But manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years, these economists say.

 

After a steep slump during the recession, manufacturing is "the shining star of this recovery," says Thomas Runiewicz, an economist at IHS. He expects total U.S. manufacturing jobs this year to rise to about 12 million. Currently, manufacturing jobs account for about 9% of all U.S. nonfarm jobs; the average pay for those jobs is roughly $22 an hour, or nearly twice the average for service jobs, according to government data.

Edited by Luke_Wilbur

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Guest Oldsmobile 442

Is this good news or bad? I think it's a double edged sword as middle class and affluent Chinese perceive American made products as superior to Chinese made products.

 

 

GM sells more cars in China than US

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Guest Al

It is good for GM, but does nothing here. All the profits remain in China. GM is no longer an American company. GM is a transnational company with factories across the globe.

 

I do not believe that U.S. manufacturing is growing at that rate. There are toolers and machinist over in the United States anymore.

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Guest Desert Rat
Guest LAW

The President is motivated to work with all sides.

 

Remarks by the President to the Chamber of Commerce

U.S. Chamber of Commerce Headquarters, Washington, D.C.

 

11:30 A.M. EST

 

THE PRESIDENT: Thank you very much. Please, have a seat. Thank you very much, Tom, for the gracious introduction. I want to make a few other acknowledgments. To Tom Bell, the Chamber Board President, thank you for helping to organize this. There are some members of my administration I want to make sure are introduced. My Chief of Staff, Bill Daley, is here. (Applause.) Senior advisor Valerie Jarrett, who is interfacing with many of you and has gotten terrific advice from many of you, is here as well. Secretary Ray LaHood, our Transportation Secretary. Ambassador Ron Kirk, who is working hard to get trade deals around the world. Our Small Business Administration Administrator Karen Mills. My director of the National Economic Council, Gene Sperling, is here. And I also want to make mention, Fred Hochberg, our Export-Import Bank Chairman; Elizabeth Littlefield, the Overseas Private Investment Corporation President. And I also want to acknowledge a good friend, Paul Volcker, the outgoing chair of the President’s Economic Recovery Advisory Board. Thank you all for being here. (Applause.)

 

Now, Tom, it is good to be here today at the Chamber of Commerce. I’m here in the interest of being more neighborly. (Laughter.) I strolled over from across the street, and look, maybe if we had brought over a fruitcake when I first moved in, we would have gotten off to a better start. (Laughter.) But I’m going to make up for it.

 

The truth is, this isn’t the first time I’ve been to the Chamber, or the first time that we’ve exchanged ideas. Over the last two years, I’ve sought advice from many of you as we were grappling with the worst recession most of us have ever known. It’s a recession that led to some very difficult decisions. For many of you, that meant restructuring and branch closings and layoffs that I know were very painful to make. For my administration, it meant a series of emergency measures that I would not have undertaken under normal circumstances, but that were necessary to stop our economy from falling off a cliff.

 

Now, on some issues, like the Recovery Act, we’ve found common cause. On other issues, we’ve had some pretty strong disagreements. But I’m here today because I am convinced, as Tom mentioned in his introduction, that we can and we must work together. Whatever differences we may have, I know that all of us share a deep, abiding belief in this country, a belief in our people, a belief in the principles that have made America’s economy the envy of the world.

 

America’s success didn’t happen overnight, and it didn’t happen by accident. It happened because [of] the freedom that has allowed good ideas to flourish, that has allowed capitalism to thrive; it happened because of the conviction that in this country hard work should be rewarded and that opportunity should be there for anybody who’s willing to reach for it. And because it happened at every juncture in our history -- not just once, not just twice, but over and over again -- we came together to remake ourselves; we came together as one nation and did what was necessary to win the future. That is why I am so confident that we will win the future again.

 

That’s the challenge that we face today. We still have, by far, the world’s largest and most vibrant economy. We have the most productive workers, the finest universities and the freest markets. The men and women in this room are living testimony that American industry is still the source of the most dynamic companies, and the most ingenious entrepreneurs.

 

But we also know that with the march of technology over the last few decades, the competition for jobs and businesses has grown fierce. The globalization of our economy means that businesses can now open up a shop, employ workers and produce their goods wherever an Internet connection exists. Tasks that were once done by 1,000 workers can now be done by 100 or in some cases even 10. And the truth is, as countries like China and India and Brazil grow and develop larger middle classes, it’s profitable for global companies to aggressively pursue these markets and, at times, to set up facilities in these countries.

 

These forces are as unstoppable as they are powerful. But combined with a brutal and devastating recession, these forces have also shaken the faith of the American people -- in the institutions of business and government. They see a widening chasm of wealth and opportunity in this country, and they wonder if the American Dream is slipping away.

 

They wonder if the middle class, rather than expanding as it has through our lifetimes, is in the midst of an inexorable contraction. And we can’t ignore these concerns. We have to renew people’s faith in the promise of this country –- that this is a place where you can make it if you try. And we have to do this together: business and government; workers and CEOs; Democrats and Republicans.

 

We know what it will take for America to win the future. We need to out-innovate, we need to out-educate, we need to out-build our competitors. We need an economy that’s based not on what we consume and borrow from other nations, but what we make and what we sell around the world. We need to make America the best place on Earth to do business.

 

And this is a job for all of us. As a government, we will help lay the foundation for you to grow and innovate and succeed. We will upgrade our transportation and communication networks so you can move goods and information more quickly and more cheaply. We’ll invest in education so that you can hire the most skilled, talented workers in the world. And we’ll work to knock down barriers that make it harder for you to compete, from the tax code to the regulatory system.

 

But I want to be clear: Even as we make America the best place on Earth to do business, businesses also have a responsibility to America.

 

I understand the challenges you face. I understand you are under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders and the pressures that are created by quarterly reports. I get it.

 

But as we work with you to make America a better place to do business, I’m hoping that all of you are thinking what you can do for America. Ask yourselves what you can do to hire more American workers, what you can do to support the American economy and invest in this nation. That’s what I want to talk about today –- the responsibilities we all have -- the mutual responsibilities we have -- to secure the future that we all share.

 

Now, as a country, we have a responsibility to encourage American innovation. I talked about this quite a bit at my State of the Union.

 

Companies like yours have always driven the discovery of new products and new ideas. You do it better than anybody. But what you also know is that it’s not always profitable to -- in the short-term, at least -- for you to invest in basic research. It’s very expensive, and the payoffs are not always clear and they’re not always localized. And that’s why government has traditionally helped invest in this kind of science, planting the seeds that ultimately grew into technologies from the computer chips to the Internet.

 

That’s why we’re making investments today in the next generation of big ideas -– in biotechnology, in information technology and in clean energy technology. We’re reforming our patent system so innovations can move more quickly to market. Steve Case is heading up a new partnership called Startup America to help entrepreneurs turn new ideas into new businesses and new jobs. And I’ve also proposed a bigger, permanent tax credit for all the research and development your companies do in this country. I believe that is a priority.

 

We also have a responsibility as a nation to provide our people with -- and our businesses -- with the fastest, most reliable way to move goods and information. The costs to business from outdated and inadequate infrastructure is enormous. And that’s what we have right now -- outdated, inadequate infrastructure.

 

And any of you that have been traveling to other countries, you know it, you see it, and it affects your bottom lines. That’s why I want to put more people to work rebuilding crumbling roads, rebuilding our bridges. That’s why I’ve proposed connecting 80 percent of the country with high-speed -- to high-speed rail, and making it possible for companies to put high-speed Internet coverage in the reach of virtually all Americans.

 

You understand the importance of this. The fact is, the Chamber of Commerce and the AFL-CIO don’t agree on a whole lot. Tom Donohue and Richard Trumka are not Facebook friends. (Laughter.) Well, maybe -- I don’t think you are anyway. (Laughter.) I didn’t check on this, but -- but they agree on the need to build a 21st-century infrastructure. And I want to thank the Chamber for pushing Congress to make more infrastructure investments, and to do so in the most cost-effective way possible: with tax dollars that leverage private capital, and with projects that are determined not by politics, but by what’s best for our economy.

 

Third responsibility that we have as a nation is to invest in the skills and education of our young people. If we expect companies to do business and hire in America, America needs a pool of trained, talented workers that can out-compete anybody in the world. And that’s why we’re reforming K-12 education; that’s why we’re training 100,000 new math and science teachers; that’s why we’re making college more affordable, and revitalizing our community college system.

 

Recently I visited GE in Schenectady, which has partnered with a local community college. And while students train for jobs available at the nearby GE plant, they earn a paycheck and they’ve got their tuition covered. And as a result, young people can find work, GE can fill high-skill positions, and the entire region has become more attractive to businesses. It’s a win-win for everybody, and it’s something we’re trying to duplicate across the country.

 

Now, to make room for these investments in education, in innovation, in infrastructure, government also has a responsibility to cut spending that we just can’t afford. That’s why I’ve promised to veto any bill that’s larded up with earmarks. That’s why I’ve proposed that we freeze annual domestic spending for the next five years. Understand what this means. This would reduce the deficit by more than $400 billion over the next decade, and bring this spending -- domestic discretionary spending -- down to the lowest share of our economy since Eisenhower was president. That was a long time ago.

 

Now, it’s not going to be enough. We’re going to have to do more. Because the driving force on our deficits are entitlements spending. And that’s going to require both parties to work together, because those are some tough problems that we’re going to have to solve. And I am eager to work with both parties and with the Chamber to take additional steps across the budget to put our nation on a sounder fiscal footing.

 

By stopping spending on things we don’t need, we can make investments in the things that we do need, the same way families do. If they’ve got a fiscal problem, if they’ve got to tighten their belt, they don’t stop paying for Johnny to go to college. They cut out things they don’t need, but they still make investments in the thing that are going to make sure we win the future. And that’s what we have to do as a country: make some smart choices -- tough choices, but smart ones.

 

Now, in addition to making government more affordable, we’re also making it more effective and more consumer-friendly. We’re trying to run the government a little bit more like you run your business -- with better technology and faster services. So in the coming months, my administration will develop a proposal to merge, consolidate and reorganize the federal government in a way that best serves the goal of a more competitive America. And we want to start with the 12 different agencies that deal with America’s exports. If we hope to help our businesses sell more goods around the world, we should ensure we’re all pulling in the same direction. And frankly, with 12 different agencies in charge, nobody is in charge. So we’re going to fix that as an example of how we can make a government that’s more responsive to the American people and to American businesses.

 

Which brings me to the final responsibility of government: breaking down some of the barriers that stand in the way of your success. As far as exports are concerned, that means seeking new opportunities and opening new markets for your goods. And I will tell you I will go anywhere anytime to be a booster for American businesses, American workers and American products. We recently signed -- (applause) -- and I don’t charge a commission. (Laughter.)

 

We recently signed export deals with India and China that will support more than 250,000 jobs here in the United States. We finalized a trade agreement with South Korea that will support at least 70,000 American jobs. And by the way, it’s a deal that has unprecedented support from business and labor, Democrats and Republicans. That’s the kind of deal that I will be looking for as we pursue trade agreements with Panama and Colombia, as we work to bring Russia into the international trading system. Those are going to be our top priorities because we believe Americans have the best products and the best businesses, and if we’re out there selling and we’re out there hustling, there’s no reason why we can’t do a lot better than we’re doing right now when it comes to our exports.

 

Now, another barrier government can remove -- and I hear a lot about this from many of you -- is a burdensome corporate tax code with one of the highest rates in the world. You know how it goes: because of various loopholes and carve-outs that have built up over the years, some industries pay an average rate that is four or five times higher than others. Companies are taxed heavily for making investments with equity, yet the tax code actually pays companies to invest using leverage. As a result, you’ve got too many companies ending up making decisions based on what their tax director says instead of what their engineer designs or what their factories produce. And that puts our entire economy at a disadvantage. We need something smarter, something simpler, something fairer. That’s why I want to lower the corporate rate and eliminate these loopholes to pay for it, so that it doesn’t add a dime to our deficit. And I’m asking for your help in this fight. I think it can be done.

 

Which brings me to the last barriers we’re trying to remove, and those are outdated and unnecessary regulations. I’ve ordered a government-wide review, and if there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them.

 

Already we’re dramatically cutting down on the paperwork that saddles businesses with huge administrative costs. We’re improving the way FDA evaluates things like medical devices, to get innovative and lifesaving treatments to market faster. And the EPA, based on the need for further scientific analysis, delayed the greenhouse gas permitting rules for biomass.

 

I’ve also ordered agencies to find ways to make regulations more flexible for small businesses. And we’ve turned a tangle of fuel economy regulations and pending lawsuits into a single standard that will reduce our dependence on foreign oil, save consumers money at the pump and give car companies the certainty that they need -- all negotiated by the various stakeholders without the need for congressional legislation.

 

But ultimately, winning the future is not just about what the government can do for you to succeed. It’s also about what you can do to help America succeed.

 

So we were just talking about regulations. Even as we eliminate burdensome regulations, America’s businesses have a responsibility as well to recognize that there are some basic safeguards, some basic standards that are necessary to protect the American people from harm or exploitation. Not every regulation is bad. Not every regulation is burdensome on business. A lot of the regulations that are out there are things that all of us welcome in our lives.

 

Few of us would want to live in a society without rules that keep our air and water clean; that give consumers the confidence to do everything from investing in financial markets to buying groceries. And the fact is, when standards like these have been proposed in the past, opponents have often warned that they would be an assault on business and free enterprise. We can look at the history in this country. Early drug companies argued the bill creating the FDA would “practically destroy the sale of … remedies in the United States.” That didn’t happen. Auto executives predicted that having to install seatbelts would bring the downfall of their industry. It didn’t happen. The President of the American Bar Association denounced child labor laws as “a communistic effort to nationalize children.” That’s a quote.

 

None of these things came to pass. In fact, companies adapt and standards often spark competition and innovation. I was travelling when I went up to Penn State to look at some clean energy hubs that have been set up. I was with Steve Chu, my Secretary of Energy. And he won a Nobel Prize in physics, so when you’re in conversations with him you catch about one out of every four things he says. (Laughter.)

 

But he started talking about energy efficiency and about refrigerators, and he pointed out that the government set modest targets a couple decades ago to start increasing efficiency over time. They were well thought through; they weren’t radical. Companies competed to hit these markers. And they hit them every time, and then exceeded them. And as a result, a typical fridge now costs half as much and uses a quarter of the energy that it once did -- and you don’t have to defrost, chipping at that stuff -- (laughter) -- and then putting the warm water inside the freezer and all that stuff. It saves families and businesses billions of dollars.

 

So regulations didn’t destroy the industry; it enhanced it and it made our lives better -- if they’re smart, if they’re well designed. And that’s our goal, is to work with you to think through how do we design necessary regulations in a smart way and get rid of regulations that have outlived their usefulness, or don’t work.

 

I also have to point out the perils of too much regulation are also matched by the dangers of too little. And we saw that in the financial crisis, where the absence of sound rules of the road, that wasn’t good for business. Even if you weren’t in the financial sector it wasn’t good for business. And that’s why, with the help of Paul Volcker, who is here today, we passed a set of common-sense reforms.

 

The same can be said of health insurance reform. We simply could not continue to accept a status quo that’s made our entire economy less competitive, as we’ve paid more per person for health care than any other nation on Earth. Nobody is even close. And we couldn’t accept a broken system where insurance companies could drop people because they got sick, or families went into bankruptcy because of medical bills.

 

I know that folks here have concerns about this law. And I understand it. If you’re running a business right now and you’re seeing these escalating health care costs, your instinct is if I’ve got even more laws on top of me, that’s going to increase my costs even more. I understand that suspicion, that skepticism.

 

But the non-partisan congressional watchdogs at the CBO estimate that health care tax credits will be worth nearly $40 billion for small businesses over the next decade -- $40 billion, directly to small businesses who are doing the right thing by their employees.

 

And experts –- not just from the government, but also those commissioned by the Business Roundtable –- suggest that health insurance reform could ultimately save large employers anywhere from $2,000 to $3,000 per family -- your employees and your bottom line.

 

I’ve said in the State of the Union and I’ll repeat here today: I am willing and happy to look at other ideas to improve the law, including incentives to improve patient safety and medical malpractice reforms. And I want to correct a flaw that’s already placed an unnecessary bookkeeping burden on too many small businesses, and I appreciate the Chamber’s help in doing that.

 

But we have to recognize that some common-sense regulations often will make sense for your businesses, as well as your families, as well as your neighbors, as well as your coworkers. Of course, your responsibility goes beyond recognizing the need for certain standards and safeguards. If we’re fighting to reform the tax code and increase exports to help you compete, the benefits can’t just translate into greater profits and bonuses for those at the top. They have to be shared by American workers, who need to know that expanding trade and opening markets will lift their standards of living as well as your bottom line.

 

We can’t go back to the kind of economy and culture that we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class. That’s not something necessarily we can legislate, but it’s something that all of us have to take responsibility for thinking about. How do we make sure that everybody’s got a stake in trade, everybody’s got a stake in increasing exports, everybody’s got a stake in rising productivity? Because ordinary folks end up seeing their standards of living rise as well. That’s always been the American promise. That’s what JFK meant when he said, “A rising tide lifts all boats.” Too many boats have been left behind, stuck in the mud.

 

And if we as a nation are going to invest in innovation, that innovation should lead to new jobs and manufacturing on our shores. The end result of tax breaks and investments can’t simply be that new breakthroughs and technologies are discovered here in America, but then the manufacturing takes place overseas. That, too, breaks the social compact. It makes people feel as if the game is fixed and they’re not benefiting from the extraordinary discoveries that take place here.

 

So the key to our success has never been just developing new ideas; it’s also been making new products. So Intel pioneers the microchip, then puts thousands to work building them in Silicon Valley. Henry Ford perfects the assembly line, and then puts a generation to work in the factories of Detroit. That’s how we built the largest middle class in the world. Those folks working in those plants, they go out and they buy a Ford. They buy a personal computer. And the economy grows for everyone. And that’s how we’ll create the base of knowledge and skills that propel the next inventions and the next ideas.

 

Right now, businesses across this country are proving that America can compete. Caterpillar is opening a new plant to build excavators in Texas that used to be shipped from Japan. In Tennessee, Whirlpool is opening their first new U.S. factory in more than a decade. Dow is building a new plant in Michigan to manufacture batteries for electric vehicles. A company called Geomagic, a software maker, decided to close down its overseas centers in China and Europe and move their R&D here to the United States. These companies are bringing jobs back to our shores. And that’s good for everybody.

 

So if I’ve got one message, my message is now is the time to invest in America. Now is the time to invest in America. (Applause.) Today, American companies have nearly $2 trillion sitting on their balance sheets. And I know that many of you have told me that you’re waiting for demand to rise before you get off the sidelines and expand, and that with millions of Americans out of work, demand has risen more slowly than any of us would like.

 

We’re in this together, but many of your own economists and salespeople are now forecasting a healthy increase in demand. So I just want to encourage you to get in the game. As part of the bipartisan tax deal we negotiated, with the support of the Chamber, businesses can immediately expense 100 percent of their capital investments. And as all of you know, it’s investments made now that will pay off as the economy rebounds. And as you hire, you know that more Americans working will mean more sales for your companies. It will mean more demand for your products and services. It will mean higher profits for your companies. We can create a virtuous circle.

 

And if there’s a reason you don’t share my confidence, if there’s a reason you don’t believe that this is the time to get off the sidelines –- to hire and to invest -– I want to know about it. I want to fix it. That’s why I’ve asked Jeff Immelt of GE to lead a new council of business leaders and outside experts so that we’re getting the best advice on what you’re facing out there –- and we’ll be holding our first meeting two weeks from now, on the 24th. So you can get your emails in early, with your ideas, with your thoughts about how we keep moving forward to create this virtuous cycle.

 

Together, I am confident we can win the competition for new jobs and industries. And I know you share my enthusiasm. Here’s one thing I know. For all the disagreements, Tom, that we may have sometimes on issues, I know you love this country. I know you want America to succeed just as badly as I do.

 

So, yes, we’ll have some disagreements; and, yes, we’ll see things differently at times. But we’re all Americans. And that spirit of patriotism, and that sense of mutual regard and common obligation, that has carried us through far harder times than the ones we’ve just been through.

 

And I’m reminded, toward the end of the 1930s, amidst the Depression, the looming prospect of war, FDR, President Roosevelt, realized he would need to form a new partnership with business if we were going to become what he would later call the “arsenal of democracy.” And as you can imagine, the relationship between the President and business leaders during the course of the Depression had been rocky at times. They’d grown somewhat fractured by the New Deal.

 

So Roosevelt reached out to businesses, and business leaders answered the call to serve their country. After years of working at cross purposes, the result was one of the most productive collaborations between the public and private sectors in American history.

 

Some, like the head of GM, hadn’t previously known the President, and if anything had seen him as an adversary. But he gathered his family and he explained that he was going to head up what would become the War Production Board. And he said to his family, “This country has been good to me, and I want to pay it back.” I want to pay it back.

 

And in the years that followed, automobile factories converted to making planes and tanks. And corset factories made grenade belts. A toy company made compasses. A pinball machine maker turned out shells. 1941 would see the greatest expansion of manufacturing in the history of America. And not only did this help us win the war; it led to millions of new jobs and helped produce the great American middle class.

 

So we have faced hard times before. We have faced moments of tumult and moments of change. And we know what to do. We know how to succeed. We are Americans, and as we have done throughout our history, I have every confidence that once again we will rise to this occasion; that we can come together, we can adapt and we can thrive in this changing economy. And we need to look no further than the innovative companies in this room. If we can harness your potential and the potential of your people across this country, I think there’s no stopping us.

 

So thank you, God bless you, and may God bless the United States of America. (Applause.)

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Guest Manny

Outsourcing is not an accident—and winner-take-all politics doesn’t happen because the government is a neutral party. Far too often, lawmakers collude with CEOs and Big Banks to rig our laws—and our whole economic system—in unfair ways that redistribute wealth upward.

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Guest EDA

The U.S. Economic Development Administration (EDA) today applauds President Obama's fiscal year (FY) 2012 Budget proposal for investing in what makes America stronger and cutting what we cannot afford. The President's proposal invests $40 million in EDA to develop a new Regional Innovation Program targeting 'Growth Zones' to foster collaboration across the federal government to build regional innovation clusters based upon the inherent strengths of local communities. EDA is the only agency in the federal government with the exclusive mission to help create and retain jobs and leverage private investment in the nation's regions.

 

"The U.S. Economic Development Administration plays an important role in the national agenda to enhance America's long-term competitiveness and spur job creation," said U.S. Assistant Secretary of Commerce for Economic Development John Fernandez. "While sacrifices are needed to put the country on a fiscally sustainable path, we are confident that the investments President Obama has proposed for EDA for FY 2012 will jumpstart our efforts to accelerate regional economic growth and help the United States win the future."

 

The new Regional Innovation Program included in the FY 2012 proposal is outlined in the recent reauthorization of the America COMPETES Act and will play a critical role in supporting EDA's efforts to foster regional innovation clusters, promote the export potential of America's regions, and encourage the development of a 21st century innovation infrastructure. The multi-agency initiative will support a nationwide competition encouraging communities across the nation to develop and implement regional strategies that build on assets and link to drivers of regional economic growth to stimulate job creation, business expansion and entrepreneurship, and regional prosperity. The 20 strongest strategic plans will be funded by EDA.

 

Focused on fiscal discipline, the President's budget eliminates the U.S. Department of Commerce's Trade Adjustment Assistance for Firms program. In assessing how government can be smarter and leaner, the administration determined that the EDA can better coordinate this assistance through its regional offices. The Commerce Department as a whole is well positioned to address the issues faced by firms impacted by foreign trade, and EDA's Economic Adjustment Assistance program - which receives an increase of $46.3 million in the FY 2012 budget - will support these firms as well. The Economic Adjustment Assistance program is flexible and provides a wide range of technical, planning, and public works and infrastructure assistance to regions experiencing adverse economic changes that occur suddenly or over time.

 

Over the last year, EDA has taken significant steps to make the agency leaner, smarter and more efficient. It underwent a comprehensive reorganization to remove barriers to success and developed new regional strategies that will put the U.S. economy on stronger footing. The department's Office of Innovation and Entrepreneurship is now housed within EDA, which works to build vibrant ecosystems that support and promote innovation and entrepreneurship and accelerate the commercialization of new ideas from the lab to the marketplace. Last October, EDA also announced several important changes to its grant application and review process to ensure it is as efficient, transparent and competitive as possible.

 

About the U.S. Economic Development Administration (www.eda.gov): The mission of the U.S. Economic Development Administration (EDA) is to lead the federal economic development agenda by promoting competitiveness and preparing the nation's regions for growth and success in the worldwide economy. An agency within the U.S. Department of Commerce, EDA makes investments in economically distressed communities in order to create jobs for U.S. workers, promote American innovation and accelerate long-term sustainable economic growth.

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Guest LAW

Sen. Bernie Sanders (I-Vt.) told a Senate panel today it is time for an aggressive national initiative to rebuild crumbling roads, bridges and railroads.

 

A member of the Senate Environment and Public Works Committee, Sanders spoke at a hearing on a long-term reauthorization of highway, transit and highway safety programs.

 

In addition to addressing a backlog of needed repairs, the investment would create jobs at a time of lingering high unemployment caused by the worst economic crisis since the Great Depression. “Millions of people have lost their jobs as a result of Wall Street greed. We have a record-breaking deficit. The middle class is disappearing, and the gap between the very rich and everybody else is growing wider,” Sanders said. “In my view, it is high time that we create millions of jobs rebuilding our deteriorating infrastructure.”

 

Both the Treasury Department and the White House Council of Economic Advisers have concluded that well-designed infrastructure investments raise economic growth and productivity, and have significant spillover effects on economic development, energy efficiency, public health and manufacturing. The studies found that the majority of jobs created are in the construction sector, which – with an unemployment rate of more than 22 percent – has been particularly hard hit during the recession.

 

The need for added investment is clear, Sanders said.

 

In Vermont, he noted, some railroads operate on infrastructure that has been in use since the Civil War. Thirty-five percent of Vermont’s 2,700 bridges are either “structurally deficient or functionally obsolete,” and more than half of those have structural deficiencies.

 

Nationwide, he added, a 2009 report by the American Society of Civil Engineers gave America's roads, public transit and aviation a grade of “D” and concluded that $2.2 trillion would have to be invested to get to a “passable” condition.

 

Despite a history of leading the world in transportation innovations from the transcontinental railroad to the Interstate highway systems, the United States has recently lost ground. The U.S. invests only half as much of its gross domestic product on infrastructure projects as Europe and only about one-quarter of what the Chinese invest.

 

Sitting side by side at the committee witness table were AFL-CIO President Richard Trumka and U.S. Chamber of Commerce President Thomas J. Donohue. The longtime adversaries both urged Congress to invest more in America's infrastructure.

 

“There is a broad understanding that now is the moment to rebuild our crumbling infrastructure. Let’s go forward on this. We have an opportunity to do a whole lot for America,” Sanders concluded.

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Guest Katherine



Growth in the region's manufacturing sector picked up in February, according to the respondents to the Business Outlook Survey. Most of the broad indicators showed an improvement over their readings in January, and employment among reporting firms increased. The diffusion index of current activity increased to 35.9 from 19.3 in January. This is the highest reading since January 2004.

Increases in input prices continued to be widespread this month, and slightly more firms reported increases in prices for their own manufactured goods. The survey's broad indicators of future activity suggest that firms expect a continued expansion in activity over the next six months.

Special Questions: What impacts are recent increases in costs having, or expected to have, on the prices of your finished products over the next three months?

* Since the beginning of the year, 57 percent of the responding firms indicated some increase in prices for their own goods, with the most frequently cited range of increase between 3 and 4 percent.
* Fifty-nine percent indicated that they expect increases over the next three months, with the most frequently cited range also between 3 and 4 percent.
* Nearly 29 percent of firms reported currently experiencing shortages or delayed delivery of critical raw or intermediate products, with the most commonly cited products being steel or steel-related and other metals.

Higher Prices Are Reported

* Sixty-seven percent of the firms reported higher prices for inputs, compared with 54 percent in the previous month.
* Twenty-nine percent of firms reported higher prices for their own goods this month, compared to 26 percent in January.

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Guest gefitz

There was once a time when capitalists were allowed to take risks. Those risks brought us technology that were critical to the growth of our economy into what it used to be: the world leader.

 

With stockholders expecting instant return, as they have been brainwashed over the past 20 years to expect, who can blame them for looking and thinking short-term?

 

I'm a free market guy myself, but I don't see where there is any incentive to risk for any shareholder. And since the public is so anti-government spending...how the heck do we get anywhere?

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Guest AEM

U.S. 2010 construction machinery exports gain 28 percent to top $16.4 billion

 

The market for exports of U.S.-made construction machinery closed out 2010 with a gain of more than 28 percent compared to the previous year, for a total of $16.4 billion dollars’ worth of equipment sold worldwide, according to the Association of Equipment Manufacturers (AEM). The AEM North American-based international trade group consolidates U.S. Commerce Department data with other sources into a quarterly export trends report.

 

"Global trade is extremely important to our industry and export sales continue to sustain many companies as we still face a fragile domestic upturn," stated AEM Senior Vice President Al Cervero. "While these numbers are positive we have to remember they follow a 2009 decline of more than 38 percent."

 

"It's important to pass the pending free-trade agreements with Colombia, Korea and Panama to help manufacturers create more U.S. jobs by selling their products to international buyers," he added.

 

Export business to Europe gained 23 percent for a total $1.88 billion, and exports to Asia grew 10 percent and totaled $2.2 billion. Construction machinery exports to South America increased 31 percent in 2010 for a total $3.1 billion; and exports to Central America came in at $1.6 billion, a 24-percent increase.

 

The largest gain was to Australia/Oceania with a 66-percent increase for a total $1.6 billion. The only decline was to Africa with a 5-percent drop for $934 million worth of purchases. Construction machinery exports to Canada gained 39 percent and totaled $5.1 billion.

 

The top countries buying the most U.S.-made construction machinery in 2010 were:

 

(1) Canada - $5.1 billion, up 39 percent; (2) Australia - $1.5 billion, up 62 percent; (3) Mexico - $1.2 billion, up 25 percent; (4) Chile - $920 million, up 21 percent; (5) Brazil - $758 million, up 48 percent; (6) Colombia - $588 million, up 50 percent; (7) China - $499 million, up 2 percent; (8) Peru - $437 million, up 37 percent; (9) Belgium - $399 million, up 11 percent; (10) South Africa - $396 million, up 12 percent; (11) Russia - $333 million – up 60 percent; (12) Singapore - $299 million, up 40 percent; (13) Saudi Arabia - $227 million, down 4 percent; (14) Arab Emirates - $197 million, up 38 percent; (15) Germany - $197 million, up 34 percent.

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Guest AEM

U.S. 2010 farm equipment exports increase 12 percent to total $8.95 billion

 

U.S. exports of agricultural-related machinery totaled more than $8.95 billion in 2010, a gain of more than 12 percent compared to the previous year, according to the Association of Equipment Manufacturers (AEM). The AEM North American-based international trade group consolidates U.S. Commerce Department data with other sources into a quarterly export trends report.

 

"There is a growing need in developing countries to provide adequate energy and food supplies to sustain the world population, and agricultural equipment plays a vital role in boosting productivity to meet these needs," stated Charlie O’Brien, AEM vice president agricultural sector. "This increase in exports is encouraging after 2009 declines of more than 20 percent and reinforce the importance of global trade to U.S. farm equipment manufacturers."

 

South and Central America recorded the strongest gains. Farm equipment exports to South America grew 59 percent with purchases totaling $970 million, and exports to Central America gained 36 percent and totaled $882 million.

 

Farm equipment exports to Asia increased 24 percent for a total $800 million while Africa took delivery of $261 million worth of American-made agricultural equipment, an increase of 16 percent. Canada recorded farm equipment export purchases for 2010 of $3.1 billion, a 13-percent increase.

 

U.S. exports to Europe dropped 5 percent for a total $2.2 billion, and exports to Australia/Oceania declined 7 percent for a total $721 million.

 

The top countries buying the most U.S.-made farm machinery in 2010 were:

 

(1) Canada - $3.1 billion, up 13 percent; (2) Mexico - $720 million, up 35 percent; (3) Australia - $658 million, down 10 percent; (4) Germany - $356 million, up 2 percent; (5) Brazil - $338 million, up 85 percent; (6) China - $291 million, up 35 percent; (7) France - $273 million, down 20 percent; (8) United Kingdom - $255 million, up 2 percent; (9) Netherlands - $199 million, up 44 percent; (10) Argentina - $168 million, up 104 percent; (11) Belgium - $153 million, down 23 percent; (12) Russia - $151 million, up 20 percent; (13) Venezuela - $151 million, up 62 percent; (14) South Africa - $133 million, down 1 percent; (15) Ukraine - $116 million, up 26 percent.

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Guest LAW

Public-private partnership will expand access to advanced technologies, increasing competitiveness and creating high-quality jobs

 

Meeting with small business and manufacturing leaders at the White House today, Assistant to the President for Manufacturing Policy Ron Bloom, U.S. Chief Technology Officer Aneesh Chopra, and U.S. Assistant Secretary of Commerce for Economic Development John Fernandez announced a new public-private partnership that will deliver $4.5 million in grant funding to help small- and medium-sized manufacturers in the Midwest compete in the 21st century global economy. The grants – $2 million from the Commerce Department’s Economic Development Administration (EDA) and $2.5 million from private-sector partners – will catalyze development of state-of-the-art technologies that accelerate the design process, allowing these small- and medium-sized companies to become more competitive. Public and private-sector partners today signed a Memorandum of Understanding in support of the effort.

 

“President Obama has called for America to out-innovate, out-educate, and out-build the rest of the world in order to win the future,” Bloom said. “This partnership between the government and the private sector supports all three of those pillars to give our manufacturers the tools they need to compete and win.”

 

EDA awarded the grant to the Council on Competitiveness – a non-partisan group of CEOs, university presidents and labor leaders that works to advance economic prosperity – to form the National Digital Engineering and Manufacturing Consortium. The Consortium will use the funding to develop software, purchase time on supercomputers, and train small- and medium-sized manufacturers in the use of this technology, enabling them to design their own advanced manufacturing processes and products. This will be done in close collaboration with original equipment manufacturer (OEM) customers of these companies, thus ensuring that this cutting-edge technology will help both OEMs and their supply-chain partners in Ohio, Illinois, Indiana and Michigan.

 

“Today’s collaboration reflects the president’s commitment to reasserting the power of American ingenuity through support of advanced manufacturing,” Chopra said. “America’s small- and medium-sized manufacturers will directly benefit, as this effort will democratize access to digital manufacturing tools that have proven effective in reducing the time to design new products.”

 

“As U.S. manufacturers work to keep their competitive edge, government and the private sector are working together to foster a vibrant advanced manufacturing sector in the United States,” Fernandez said. “This important public-private partnership to strengthen manufacturing in the Midwest is an example of the type of investment that can help America win the future by out-innovating and out-competing the rest of the world.”

 

The goal of the initiative is to foster collaboration between large manufacturing firms and their small- and medium-sized supply chain manufacturers and provide advanced manufacturing modeling and simulation resources that use high-performance computing (HPC) technologies. HPC is a game-changing platform that will revolutionize the manufacturing process for small- and medium-sized enterprises. This cost-efficient method uses top-of-the-line technology to speed up the design cycle and quickly provide a realistic simulation of the final product. Increasing access to these advanced technologies and training, including modeling and simulation tools, will better prepare U.S. small manufacturers to out-build their global competitors.

 

“This pilot project exemplifies the potential for public-private partnerships to play a pivotal role in the growth of the U.S. economy,” said Council on Competitiveness President and CEO Deborah Wince-Smith. “Through this investment, the administration is joining with the private sector in recognizing the importance of modeling and simulation to the competitiveness of our small businesses and the health of our manufacturing base.”

 

The National Digital Engineering and Manufacturing Consortium is being coordinated by the Council on Competitiveness in collaboration with the National Center for Manufacturing Sciences, Inc., the National Center for Supercomputing Applications in Illinois, and the Ohio Supercomputing Center. Other partners that have provided the $2.5 million local match in funding include Purdue University, General Electric, John Deere, Lockheed Martin, Procter & Gamble, and the State of Ohio. In addition to the U.S. Department of Commerce, interagency partners include the Departments of Defense and Energy, NASA, the National Science Foundation, and the Small Business Administration.

 

Strengthening the capacity of small- and medium-sized manufacturers will result in a more skilled workforce, improved product quality, and job growth. The Obama administration is committed to building a 21st century manufacturing economy by supporting small business development to create the technologies and industries of the future. Last week, President Obama’s Council on Jobs and Competitiveness held its first meeting to discuss the best ways to continue the dialogue between government and the private sector, and what actions must be taken to improve competitiveness and economic opportunity for U.S. businesses.

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The U.S. unemployment is 8.9 percent.

 

http://bls.gov/news.release/empsit.nr0.htm

 

 

THE EMPLOYMENT SITUATION -- FEBRUARY 2011

 

 

Nonfarm payroll employment increased by 192,000 in February, and the unemployment

rate was little changed at 8.9 percent, the U.S. Bureau of Labor Statistics re-

ported today. Job gains occurred in manufacturing, construction, professional and

business services, health care, and transportation and warehousing.

 

Household Survey Data

 

The number of unemployed persons (13.7 million) and the unemployment rate (8.9

percent) changed little in February. The labor force was about unchanged over

the month. The jobless rate was down by 0.9 percentage point since November 2010.

(See table A-1.)

 

Among the major worker groups, the unemployment rates for adult men (8.7 percent),

adult women (8.0 percent), teenagers (23.9 percent), whites (8.0 percent), blacks

(15.3 percent), and Hispanics (11.6 percent) showed little or no change in February.

The jobless rate for Asians was 6.8 percent, not seasonally adjusted. (See tables

A-1, A-2, and A-3.)

 

The number of job losers and persons who completed temporary jobs, at 8.3 million,

continued to trend down in February and has fallen by 1.2 million over the past 12

months. The number of long-term unemployed (those jobless for 27 weeks or more)

was 6.0 million and accounted for 43.9 percent of the unemployed. (See tables A-11

and A-12.)

 

Both the civilian labor force participation rate, at 64.2 percent, and the employ-

ment-population ratio, at 58.4 percent, were unchanged in February. (See table A-1.)

 

The number of persons employed part time for economic reasons (sometimes referred

to as involuntary part-time workers) was essentially unchanged at 8.3 million in

February. These individuals were working part time because their hours had been cut

back or because they were unable to find a full-time job. (See table A-8.)

 

In February, 2.7 million persons were marginally attached to the labor force, up

from 2.5 million a year earlier. (These data are not seasonally adjusted.) These

individuals were not in the labor force, wanted and were available for work, and

had looked for a job sometime in the prior 12 months. They were not counted as

unemployed because they had not searched for work in the 4 weeks preceding the

survey. (See table A-16.)

 

Among the marginally attached, there were 1.0 million discouraged workers in February,

a decrease of 184,000 from a year earlier. (These data are not seasonally adjusted.)

Discouraged workers are persons not currently looking for work because they believe no

jobs are available for them. The remaining 1.7 million persons marginally attached to

the labor force in February had not searched for work in the 4 weeks preceding the sur-

vey for reasons such as school attendance or family responsibilities. (See table A-16.)

 

Establishment Survey Data

 

Total nonfarm payroll employment rose by 192,000 in February. Job gains occurred in

manufacturing, construction, and several service-providing industries. Since a recent

low in February 2010, total payroll employment has grown by 1.3 million, or an average

of 106,000 per month. (See table B-1.)

 

Manufacturing employment rose by 33,000 in February. Almost all of the gain occurred

in durable goods industries, including machinery (+9,000) and fabricated metal pro-

ducts (+7,000). Manufacturing has added 195,000 jobs since its most recent trough in

December 2009; durable goods manufacturing added 233,000 jobs during this period.

Construction employment grew by 33,000 in February, following a decline of 22,000 in

January that may have reflected severe winter weather. Within construction, specialty

trade contractors accounted for the bulk of the February job gain (+28,000).

Employment in the service-providing sector continued to expand in February, led by

a gain of 47,000 in professional and business services. Employment services added

29,000 jobs, and employment rose by 7,000 in management and technical consulting.

Within employment services, the number of jobs in temporary help services edged up

over the month.

 

Health care employment continued to increase in February (+34,000). Over the prior

12 months, health care had added 260,000 jobs, or an average of 22,000 jobs per month.

Transportation and warehousing employment increased by 22,000 in February, with half

of that gain in truck transportation (+11,000).

 

Employment in both state and local government edged down over the month. Local govern-

ment has lost 377,000 jobs since its peak in September 2008.

The average workweek for all employees on private nonfarm payrolls was unchanged at

34.2 hours in February. The manufacturing workweek for all employees rose by 0.1 hour

to 40.5 hours, while factory overtime rose by 0.2 hour to 3.3 hours. The average work-

week for production and nonsupervisory employees on private nonfarm payrolls increased

by 0.1 hour to 33.5 hours. (See tables B-2 and B-7.)

 

In February, average hourly earnings for all employees on private nonfarm payrolls

increased by 1 cent to $22.87. Over the past 12 months, average hourly earnings have

increased by 1.7 percent. In February, average hourly earnings of private-sector pro-

duction and nonsupervisory employees were unchanged at $19.33. (See tables B-3 and

B-8.)

 

The change in total nonfarm payroll employment for December was revised from +121,000

to +152,000, and the change for January was revised from +36,000 to +63,000.

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Industrial production decreased 0.1 percent in January 2011 after having risen 1.2 percent in December. In the manufacturing sector, output increased 0.3 percent in January after an upwardly revised gain of 0.9 percent in December. Excluding motor vehicles and parts, factory production rose 0.1 percent in January.

 

Market Groups

 

The production of consumer goods increased 0.1 percent in January. The index for consumer durables advanced 1.4 percent, and the index for consumer nondurables declined 0.3 percent. Within durables, the production of automotive products rose 3.0 percent and the output of miscellaneous consumer durables gained 0.6 percent, but the index for home electronics decreased 0.8 percent and the index for appliances, furniture, and carpeting fell 1.0 percent. Among consumer nondurables, the output of non-energy goods rose 0.2 percent, as solid gains in clothing, chemical products, and paper products were partly offset by a decline in the production of foods and tobacco products. The output of consumer energy products fell 2.0 percent in January after having risen 5.4 percent in December. The decline in energy production in January reflected drops both in the production of fuels and in residential sales by electric and natural gas utilities.

 

The output of business equipment rose 0.9 percent in January, and all of its major component indexes increased: Transit equipment advanced 1.2 percent, information processing equipment increased 0.6 percent, and industrial and other equipment gained 1.0 percent. The output of business equipment has risen in each of the past 11 months and in January stood 11.4 percent above its level 12 months earlier.

 

The production of defense and space equipment moved up 1.2 percent in January after having declined, on balance, over the previous four months.

Within nonindustrial supplies, the output of construction supplies fell 0.2 percent in January, but it was 7.2 percent above its year-earlier level. The production of business supplies declined 0.3 percent; a decrease in the output of commercial energy products more than accounted for the loss.

 

The production of materials fell 0.4 percent in January after having risen 1.5 percent in December. A decline of 0.6 percent in nondurable materials and a decrease of 1.0 percent in energy materials were partially offset by an increase of 0.5 percent in durable materials. The gains in durable materials were widespread across its major components. Among nondurables, the index for chemical materials, which jumped 3.2 percent in December, fell 0.9 percent in January, and the indexes for textile materials and paper materials each recorded smaller declines.

 

Industry Groups

 

Manufacturing output rose 0.3 percent in January after having increased 0.9 percent in December; the level of output in January was 5.5 percent above its year-earlier level. Capacity utilization for manufacturing was 73.7 percent, a rate 5.4 percentage points below its average for the period from 1972 to 2010.

 

The output of durable goods moved up 0.6 percent in January. A large gain was recorded in the index for motor vehicles and parts; smaller increases were recorded for many other industries, including fabricated metal products, machinery, computer and electronic products, aerospace and miscellaneous transportation equipment, furniture and related products, and miscellaneous manufacturing. Output decreased for wood products; nonmetallic mineral products; primary metals; and electrical equipment, appliances, and components.

 

Nondurable manufacturing declined 0.1 percent in January after having advanced 1.0 percent in December. The decline in production in January reflected decreases for food, beverage, and tobacco products; textile and product mills; printing and support products; and petroleum and coal products. The production of apparel and leather products moved up more than 1 percent, and the output indexes for paper, for chemicals, and for plastics and rubber products recorded smaller increases. The index for non-NAICS manufacturing industries, which comprises publishing and logging, rose 0.3 percent.

 

In January, mining output fell 0.7 percent, and capacity utilization declined to 88.1 percent, a rate 0.7 percentage point above its 1972-2010 average. After a sizable increase in December, the output of utilities dropped 1.6 percent in January, as production declined in both electric and natural gas utilities. The utilization rate for utilities fell to 81.2 percent.

 

Capacity utilization rates in January at industries grouped by stage of process were as follows: At the crude stage, utilization fell 0.8 percentage point to 88.6 percent, a rate 2.2 percentage points above its 1972-2010 average; at the primary and semifinished stages, utilization declined 0.3 percentage point to 73.2 percent, a rate 8.1 percentage points below its long-run average; and at the finished stage, utilization increased 0.3 percentage point to 74.7 percent, a rate 2.7 percentage points below its long-run average. Note: Preliminary Estimates of Industrial Capacity

 

The data in this release include preliminary estimates of industrial capacity for 2011. Measured fourth quarter to fourth quarter, total industrial capacity is projected to rise 1.2 percent this year after having declined 0.3 percent in 2010. Manufacturing capacity is estimated to increase 0.7 percent in 2011 following decreases of 0.2 percent last year and 1.2 percent in 2009. Mining capacity is estimated to rise 2.0 percent in 2011 after having been unchanged in 2010, and utilities capacity is projected to expand 3.6 percent this year, which is 2.1 percentage points faster than the rate of expansion recorded last year. These estimates will be updated with the publication on March 25, 2011, of the annual revision to industrial production, capacity, and capacity utilization.

 

Revision of Industrial Production and Capacity Utilization

 

The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on March 25, 2011. The revised IP indexes will incorporate detailed data from the 2009 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Data from selected editions of the Census Bureau's 2009 Current Industrial Reports and annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2009 will also be incorporated. The update will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications to the methods for estimating the output of an industry will affect the index from 1972 to the present.

 

Capacity and capacity utilization will be revised to incorporate additional data from the Census Bureau's Quarterly Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.

 

Once the revision is published, it will be available on the Board's website at www.federalreserve.gov/releases/G17. Further information on the revision can be obtained from the Board's Industrial Output Section (telephone number 202-452-3197). Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.

 

http://federalreserve.gov/releases/G17/Current/default.htm

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