Health Scare

   Throughout America, fewer men have health insurance than women. Moreover, "There are more uninsured working-age adults than uninsured children," according to the U.S. Census.
   Only 50 of the 3,143 counties in the United States ( 1.6 percent) can say that most of their population have health insurance. Only 50 counties can say that fewer than 10 percent of the working-age population are uninsured. In some counties, more than half (52.5 percent) of adults have no health insurance.

  On a state level, the Census analysis found that as many as 25 percent of a state's population under age 65 have no health insurance. Uninsured rates varied from a low of 4.9 percent to 25.7 percent. And in some counties, the proportion of those under 65 without health insurance was as high as 46 percent.
   On a county level, the median uninsured rate for people of working age (18 to 64) was 21.5 percent. For those under 19, the county median was 7.7 percent, the report said.
   The analysis covered health insurance availability during 2011. In every state, the report said, the uninsured rate was highest for Hispanics, followed by non-Hispanic blacks. Moreover, low-income groups were more likely to lack health insurance. On a county level, the uninsured rate ranged from 10.7 percent to 43.6 percent, and for blacks, the range of those without health insurance was from 6.6 percent to 29.1 percent.

  Texas leads the nation in the number of those without health insurance -- more than 25 percent of its population. Florida, Nevada, New Mexico, Oklahoma, Alaska, Georgia, Montana, Mississippi, California, Arkansas and Louisiana follow with uninsured rates of 20 percent of more.
   Only Massachusetts, home of Romneycare, the statewide mandate for universal health coverage, posted less than 5 percent of its population as lacking health coverage. 

   All data are from 2011. Whether things have improved measurably in less than two years is another question. Meanwhile, here's a link to the full Census Bureau report:   
http://www.census.gov/did/www/sahie/data/2011/SAHIE_Highlights_2011.pdf

Keep Spending

   There's more good news today about American economic recovery, as the number-crunchers reported increases in income and spending by consumers.
   In July, according to the Bureau of Economic Analysis, personal income rose by $14.1 billion, disposable income by $21.7 billion, and consumption expenditures by $16.3 billion. The jumps are not as high as those recorded for June, according to revised estimates for that month, but the trend is still upward.
   Even so, the spending increase could be attributed to more mothers going back to work, and more families relying on food stamps. The Census Bureau reported those elements in the same survey that found a drop in home ownership.

Roundup

   Recovery accelerated in the U.S. during the second quarter, even as central banks held to a low rate policy to continue an economic stimulus. Homeownership in America has declined, however, from a peak of 69 percent of all households a decade ago to 65 percent now.
   In Washington, the government said GDP grew by 2.5 percent in the second three months of this year, up from 1.1 percent in the first quarter.  An earlier estimate put second quarter growth at 1.7 percent. Primary driver of the increase was consumer spending, the government said.
   In Britain, the new governor of the Bank of England said interest rates will stay low, with a central bank target of 0.5 percent, until the unemployment rate drops to 7 percent.
   The Federal Reserve has been holding to its policy of keeping interest rates low, even as it suggests it might pull back from stimulus efforts if things go well. The governor of the Bank of England, however, says he is not ready to ease off stimulus efforts.

Subsidizing Wal-Mart

   Wal-Mart is the largest private-sector employer in America, yet many of its workers are on public assistance, such as food stamps and Medicaid -- health care for the poor. This means that government is subsidizing corporate profits. It also means that the bargain you think you're getting isn't a bargain at all, since you're paying in other ways -- tax dollars for public assistance programs.
   The company has some 1.4 million workers, including part-timers. One survey put the average pay for sales associates at $8.85 an hour, which means many make less than that, or get the legal federal  minimum of $7.25 an hour. And if they work only part-time, that means they are not likely to get any benefits.
     So someone who works 20 hours a week gets $155, with a take-home net of less than that. Nationwide, according to the Department of Labor, 22 states set a minimum wage the same as the federal mandate, 19 states have minimum wage rates higher than the federal law, five states (all in the South) have no minimum wage law, and another four set a minimum wage rate lower than the federal. And if a person works fewer than 40 hours in a week, they can be treated as part-time employees and thus not be eligible for company benefit programs.
   To be fair, in many areas, labor market conditions drive the minimum wage higher than the legal minimum, but often that's still not enough to live on.
   So a person can put in 39 hours in a week, earn about $280 at the minimum wage level, take home less than that, and try to support a family.
   Can it be done?  Perhaps. But that's a yearly total of $14,560, assuming the employee works all 52 weeks, and does not take a vacation. Federal guidelines, set by the Department of Health and Human Services, put the income level for a household of two persons at $15,510, and for a family of four at $23,550.
   Do the math. Even if that employee is paid $10 an hour, the yearly total is $20,280 for a full 52 weeks, no vacation, and that's still below the government poverty level. Can a worker support a spouse and two children on that income? Not without food stamps or rent assistance, much less Medicaid for health care.

  Therefore, the government is subsidizing Wal-Mart profits.
  
  In its defense, the company has claimed that the average hourly wage for all its employees is $12.78, and only 5 percent of its workers were on Medicaid.
   Again, do the math. At $12.78 an hour, assuming two weeks (unpaid) vacation, that's a yearly total of $25,560, just a tad more than the federal poverty level of $23,550 for a family of four.
   And if "only" 5 percent of its 1.4 million employees are on Medicaid, that's 70,000 people getting government-sponsored health care because they don't earn enough to get their own, or their employer doesn't provide a health care insurance plan.
   That's 70,000 people too many, especially while the Walton family, owners of the Wal-Mart chain, enjoys a net worth of an estimated $100 billion. There are just six heirs to the Walton fortune, according to published reports, and their net worth is more than nearly half of all other American households combined -- the lower half, of course.

Fiscal Infatuation

   The siren call of cost-cutting to balance a national budget continues to whine its way through the semi-conscious thought of the True Believers. Despite the lessons of history and long experience that budget-cutting only builds more obstacles on the road to prosperity, the True Believers invent new names to label the old, unworkable strategies. 
   Fiscal consolidation and sequester are just the latest examples of relabeling to disguise an old product that may sell well to the 1 percent who don't need it, but is distasteful to the 99 percent, who won't buy it.

   It's a universal issue, not limited to America, but based on economic principles and observed history. And you don't have to stay home to find examples.

   Consider this analysis:

   "Heightened domestic uncertainty, government underspending, and a difficult external environment have contributed to a marked economic slowdown.
   "In the short term, the government needs to overcome recent budget under-spending and allow a higher budget deficit later this year, to the extent that revenues are lower due to the slowdown. Further monetary loosening, coupled with measures to strengthen the transmission mechanism, also appears warranted. Political stability together with greater clarity on government policies would also help reduce business uncertainty."

   Sound familiar? It's an analysis with recommendations that are needed in America, but it's not about America. It's from a critique by the International Monetary Fund about current economic issues in the East European Republic of Georgia. The economy has slowed there, for the reasons given.
   Comparisons to other nations can be dicey, but some economic principles are universal. One is that government intervention is imperative when an economy falters, remembering that government should step back when business and consumer confidence and activity resumes.

Double Cruz

   What's next for the Birthers?

   A Texas newspaper has reportedly found and printed the birth certificate of Republican Senator and Tea Party darling Ted Cruz, a potential presidential aspirant. It seems he was born in Canada, and his father was a native of Cuba who was working in Calgary at the time. News reports said this revelation puts a damper on the senator's presidential hopes, much as the Birthers claimed that Barack Obama was not an American citizen because he was supposedly not born in America, and moreover, his father was from Kenya.
   To be rational, the same standard should apply to all, whether Democrat or Republican, liberal or conservative, Tea Party firebrand or pragmatic centrist. And the same standard should have been applied to Sen. John McCain, the GOP nominee in 2008, who was born in Panama.
   In fact, applying the same standard -- specified in the Constitution -- means that all three qualify as "natural born citizens" of the United States. The Constitution does not require that the candidate be "native born."
   Sen. Cruz is a natural born citizen, because his mother was American. President Obama qualifies because his mother was American. And both of Sen. McCain's parents were American. His father was military, stationed in the Panama Canal Zone.
   It doesn't matter where a future candidate was born, as long as one of the parents was an American citizen.
   But facts and history have never interfered with ranting by virulent opponents.
   The latest act by the ranting opponents of Obama is a movement for impeachment. But so far, no specifics have been brought up.
   The Constitution specifies that a president can be impeached for "high crimes and misdemeanors." What are they? What are the details of the allegations?

   Impeachment is a tough case to make. It must originate in the House of Representatives, and then a trial is held in the Senate, presided over by the Chief Justice of the Supreme Court. (You could look it up; it's in the Constitution.)
   Impeachment has only been done twice against a President, and in neither case was there a conviction. The first to be impeached was Andrew Johnson, but conviction failed in the Senate. The second was against Bill Clinton, and that too failed in the Senate.
   The case against Andrew Johnson, a Southerner, was brought largely by Northerners who felt the President was too sympathetic to the defeated South after the Civil War.
   The case against Bill Clinton depended largely on whether he lied about his alleged sexual liaisons. Whether that qualifies as a "high crime or misdemeanor" is another issue.
   To be fair, Richard Nixon was not impeached. Articles of impeachment were approved by a House committee, but Nixon resigned before the full House could vote on them, so there was no impeachment, and consequently no Senate trial.

   Facts, of course, don't always get in the way of partisan politics.

Media Elite

   Newspapers reflect public opinion more than they mold it.

   Liberal: "The Wall Street Journal is one of the most biased newspapers in the country."
   Conservative: "Yeah, but it's my kind of bias."

   If you can't beat 'em, join 'em.

   Now we see the hypocrisy inherent in the system.

   So Newt Gingrich is joining CNN as the cable news outfit revives "Crossfire," its political debate program.
   Conservatives have been bashing what they call the "lamestream liberal elite media" for supposedly propagandizing readers and viewers with loony liberal ideas and not supporting their ideas.
   How do we know this? Because the so-called lamestream liberal media outlets have been reporting all their charges and allegations as well as their conservative views.
   While it may be true that reporters and editors in general tend to be liberal and publishers tend to be conservative, when it comes to writing news stories for Page One, both sides agree that documenting Truth is paramount.
   The odd thing is that the loudest complaints about liberal bias in the media are duly reported in that same media.
   So where's the bias?

   Conservatives protest that the allegedly liberal elite lamestream media fail in their duty to report on conservative views. Yet these same protests, as well as the views, are duly printed in newspapers and broadcast on TV and radio talk shows.
   Conservatives worry that if someone is not an advocate for their position, that person is therefore an adversary -- an enemy to be assailed at every opportunity. But reporters are neither advocates nor adversaries. Objectivity may not be possible in a human, but neutrality is.
   In any case, the concept of a free press means that both conservatives and liberals can publish their views. And the concept of free speech carries with it the right not to listen.
   So it is with newspapers. If readers don't like the coverage or the writing, they go elsewhere. Or they complain to the publisher and editor, and when enough complaints come in and/or enough readers, viewers and advertisers to away, the newspaper changes its coverage and writing style. And if reporters and editors don't like the new coverage and writing style, they too go elsewhere.

   A publisher may indeed try to impose his personal views on news coverage, but in doing so runs the risk of losing readers, subscribers, advertisers, reporters and editors -- in effect, the entire business. A newspaper is, at root, a business.
   That's why the Washington Post Co. sold its newspaper. For various reasons, the newspaper division wasn't making enough money to satisfy corporate stockholders.
   Whether new owner Jeff Bezos will try to impose his personal political views on the way stories are covered remains to be seen. But there's a risk in doing so. Unless, of course, the publisher's personal views match those of readers, subscribers, advertisers, reporters and editors. Then everyone prospers.

   Meanwhile, newspapers -- as well as broadcast media, including cable channels such as Fox News, MSNBC, CNN, BBC, plus those owned and operated by firms based in Paris, Moscow and Tokyo, and newcomer Al Jazeera America -- all succeed or fail based on their ability to attract readers and viewers who approve of their coverage. And in turn, more readers mean more advertisers, and thus more income.
   Each is free to choose a political framework for their news coverage, or to be neutral. Either way, that choice will influence their success or failure.

   As for conservative complaints about allegedly unfair or biased coverage by major news outlets, the complainants are free to start their own newspapers or TV operations, and attempt to attract readers of their own mind. Or they can try to make use of the many that are already operating.
   But if they want to reach the neutral and undecided public, they need to stop chanting bias and talk to the neutral reporters.

Warming Cycle

   There is no doubt that global warming is happening. The issue is how much people contribute to it, and how they can back off.

   It doesn't take a scientist to know that the earth's climate is changing. Many can remember ice skating on the town pond, and photos show people skating on Central Park Lake in Manhattan.
   That doesn't happen anymore.
   Many can remember when mockingbirds were never seen north of Virginia. Today, they are seen in Northern New Jersey all year.
   Experts have documented warming cycles on the earth over many millennia, with dinosaur fossils found in cold-weather areas that could not have supported semi-tropical life forms eons ago.
   Oil found in Alaska or in Middle Eastern desert areas means that millions of years ago they were lush with carbon-based plant life forms.
   Satellite photos show dry land that once was covered by glaciers.
   This week, yet another scientific study confirmed that the overall temperature of the earth is rising, and that human activity is the major contributor, as carbon-based fuels send up gasses to form a sort of greenhouse to keep heat closer to the earth's surface.

   So what is a major consequence of global warming? Rising sea levels, as polar ice caps melt. And a major consequence of rising sea levels is coastal flooding.

   Of the ten major cities worldwide that are most vulnerable to coastal flooding from rising sea levels, five are in America -- all in the East and South.
   A new study by the World Bank listed Boston, New York, Tampa, Miami and New Orleans as at the highest risk of damage from coastal flooding.
   The top ten, worldwide, according to the World Bank, are 1/ Guangzhou, China; 2/ Miami; 3/ New York; 4/ New Orleans; 5/ Mumbai, India; 6/ Nagoya, Japan; 7/ Tampa; 8/ Boston; 9/ Shenzen, China, and 10/ Osaka, Japan.

   "Coastal defenses reduce the risk of floods today," said World Bank senior economist Stephane Hallegatte, but they also attract population and more building, thus putting them at greater risk if the defense fails or if an event overwhelms the defense.
   That's what happened in New Orleans as Hurricane Katrina hit, and the most sorely affected were the poor. Moreover, this is true worldwide, Hallegatte wrote. "The poor are most at risk as rapid urbanization has pushed them into the most vulnerable neighborhoods, often in low-lying areas and along waterways prone to flooding," the economist wrote.

Ominosity

   Universal health care is on its way, and corporate America is already making adjustments.
   To hear some of the broadcast headlines, however, news of these adjustments can be scary, as reporters latch onto single aspects that can be ominous and result in a simplistic story.

   So let's put a little context into the UPS announcement that it's dropping health insurance for some 15,000 spouses of its employees.
   First, it applies only to spouses of management employees in America, not to union workers or overseas employees. UPS has a total of almost 400,000 employees, and some 33,000 spouses are covered by UPS policies.
   Second, of those 33,000, some 15,000 have their own jobs, and their companies also offer health insurance. 
   Third, the federal law known as Obamacare requires companies to offer some sort of health insurance coverage to its employees, or pay a penalty.
   Fourth, working spouses who also have their own coverage as well as UPS coverage are double-dipping.
   Fifth, if they don't have health insurance, they soon will, as their employers  follow the law.

   Therefore, UPS  calculates it can save money as these working spouses pick up health insurance from their own employers.
   As things stand now, many companies are saving money by not providing health insurance, since these 15,000 spouses are covered by UPS-sponsored group policies.
   In effect, UPS is saying these other companies are getting a free ride and not paying their fair share. Under the new law, they'll have to pony up.

Human Capital

   Education is more than acquiring information. Wisdom comes with knowing how to use that information.
   Skill is more than learning techniques and developing talent. Art arrives when skill and talent merge to produce something of value and beauty.

   Society honors the value of education when it encourages its citizens to acquire information and develop talent so that everyone produces things of value, whether these things are pencils, cars or sculpture; music, novels or drama; furniture, lighting fixtures or computer programs. Whether designing, building or using things of value, this is the nature of human capital. and society prospers when investing in human capital yields a bountiful return.

   But to justify the investment in human capital that education offers, expected future earnings must be greater than the present earnings that the student/worker must forgo. He or she must be willing to put off present earnings in the hope of gaining higher future earnings.
   Today, however, students often have to borrow tuition money, and unless there are assurances that the rate of interest on these loans is low enough to be affordable, and the expected future earnings high enough to justify the expense and risk, the investment may not be worth pursuing.
   And it's not just higher education -- college or specialized trade schools -- that are key. For some products, high skill levels don't matter. For other products, location matters greatly.

   So there will be a need for skilled hand-work on high-end products. They will be niche markets, carrying high prices that reflect the quality of the product as well as the wage cost for highly skilled craft workers. Robotic manufacturing can be done in many places, but even here, there will be a need for skilled operators of the machines.
   Meanwhile, it's becoming increasingly clear that America must pay closer attention to the education of its workers, whether they be engineers or academics, teachers or firefighters, police or military, civil service or farmhands, truck drivers or mechanics, airline pilots or cotton pickers.

   How important is this issue? Important enough so that the President is going an a bus tour to promote a plan to "make college more affordable, tackle rising costs, and improve value for students and their families." Why? Because, he said in a mass emailing, "the average student taking out loans to pay for education graduates with more than $26,000 in debt."
   That's equivalent to more than a year's salary for a beginning teacher. And some put the debt level far higher, especially for engineering or science graduates of prestige schools.

   As for the political opposition, this question must be asked: How can anyone be against education, when it has been documented many times that there is a direct correlation between education and income, and that an educated society is a freer society?
   We haven't heard much from conservatives recently about Obama's education plan, but here's what Rick Santorum reportedly said more than a year ago about the idea of making college more accessible to all Americans: "President Obama wants everybody in America to go to college. What a snob."
   "Liberal college professors," according to Santorum, are dangerous, because they are teaching communism disguised as equal opportunity. "Where does the social engineering stop?" Santorum protested.
   All would be better, according to conservative preaching, if people simply follow the doctrine and not bother to think for themselves. But critical thinking is a keystone of education, and that may be why the Radical Righteous oppose mass education. If anyone's going to educate the masses, this attitude goes, it will be them. And as Rush Limbaugh might put it, "I'll do your thinking for you."

   The goal of this blog is not to demand agreement, but to provoke thought, because belief without thought endangers freedom.

BRIC Aback

   News items:  For a while, the four BRIC countries -- Brazil, Russia, India and China -- were supporting worldwide economic growth as richer nations stumbled. But now the BRICs are slowing, and despite some reports, the richer nations are not taking up the slack.
   The Federal Reserve Board's Open Market Committee admitted that real GDP growth in the U.S. "was weaker, on net, in the first half of the year than had been anticipated." Fed staffers still hope, however, that things will pick up during the second half of 2013. And growth in Japan has not been what it was.
   Uneasy investors in India drove the rupee to a record low while they waited for the Fed report on its meeting three weeks ago. 
      
   Meanwhile, on the home front, the National Association of Realtors said Wednesday that existing home sales in America leaped in July, and the median price is still hopping at a double-digit pace over the year.
   Even though mortgage rates are up -- the NAR reported that the average rate for a 30-year, fixed rate home loan was 4.37 percent, from 4.07 percent in June, the highest level in two years -- NAR chief economist Lawrence Yun said several other conditions may offset the loss of some buyers.
   Initially, rising rates were a good incentive to close a deal, Yun noted, but "further rate increases will diminish the pool of eligible buyers."

   On the whole, there has been some good news and some not-so-good news, but overall, the picture in the crystal ball is still cloudy.
   Meanwhile, employment remains a major issue in America. You can't buy a home without a job.

Health Care

Insurance only works when everyone participates

   Some folks claim caring for the sick is too heavy a burden, and unfair to the healthy. Others say the cost of health care should be borne by those who use it. Unfortunately, altruism is not as widespread as it could be, and often the burden of caring for the long-term sick falls to family members, who may have to quit working to devote themselves to care-giving.
   That, however, conflicts with the second concept, that of cost. When sick people cannot work, they are unable to pay the cost of health care. And if healthy family care-givers quit work, they become unable to contribute to their own basic necessities.
   Meanwhile, healthy people often tend not to purchase health insurance, because since they are healthy, they have no medical expenses, and therefore no need of insurance. This, however, only drives up the insurance premiums for those who do participate, and when that cost gets too high, they drop out.
   Another argument is that those without insurance can go to hospital emergency rooms when they get sick, since hospitals are required by law to care for everyone regardless of their ability to pay or whether they have insurance. Result: These costs are passed on to others, either to those who pay directly, or through higher premiums for those who do have health insurance.

   Net: Fewer people with health insurance, and higher premiums for those who do.
   Consider: The purpose of any insurance is to spread the cost so all may share the benefits. And this is true whether it be health insurance, automobile accident insurance, or -- in the area where insurance began -- marine insurance, where shippers got together and contributed to a pool to cover losses if any member lost a cargo at sea.

   Health care insurance is like public education. The costs are spread so all may benefit. Those without children pay a portion of school costs, partly to repay the benefits they themselves received when young, and partly as an investment for the future of society.

   Think of it as social insurance.

Social Capitalism

Use profits to help care for the general welfare, through programs sponsored by government.

   Economics is the study of what we do with what we've got. It is not an exact science, but examines how people in a society use what's available to them, and how that evolves over time.
   Modern economic study began with Adam Smith, and was extended by David Ricardo. Karl Marx applied the Hegelian dialectic to explain how it was evolving, and would inevitably lead to socialism. A major error, however, was in assuming that its evolution would then stop, since a socialistic society would be the best of all possible worlds, and full government/labor control would keep society safe. In the 20th Century, the theories of John Maynard Keynes dominated, which encouraged temporary government intervention to prevent or resolve catastrophe. Many, however, contest Keynesian economics and maintain that the government that governs best governs least.
   
   So economics is a social science. There are too many variables, especially human variables, for it to qualify as an exact science in the way that physics or chemistry are exact sciences. People do not always act or react in the same way to any given stimulus or set of circumstances. There are, of course, general trends, but there are no guarantees. We are all, at one time or another, outliers.

   In the 1970s, the study of economics was hijacked by the number-crunchers who tried to make it a "pure" science, like mathematics, chemistry or physics. But people and their behaviors cannot be reduced to strict patterns that follow the laws and principles of logic. We are, all of us, free spirits who on occasion indulge in group behavior patters or are swept up in the madness of crowds. At the least, we follow cultural maxims of what constitutes "acceptable" behavior -- most of the time. But we are free to deviate from these norms and pay whatever consequences there may be.
  In short, economics was and will remain a social science. The best we can to is describe the patterns of what people actually do, without attempting to reduce these patterns to immutable laws -- prescriptions of what people should and must do. That way madness lies.

   Economic predictions can sometimes be helpful, so long as we keep in mind the heroic assumption of ceteris paribus -- other things equal. That is, assuming nothing else changes, and remains the same, such and so will most likely happen. But because there are so many variables, other things seldom remain the same for long. Statistics can infer a probability, but that is at most a calculated guess, again assuming no change in any of the many variables.
   People, however, demand predictions, so economists supply them -- with cautions, much as weather forecasters do. Unfortunately, many people ignore the cautions.

   Classical economics claims that a free market, left alone, solves all conflicts and reaches an equilibrium of supply and demand. The Great Depression proved that was not enough. Some government was essential.
   Many conservatives, however, still maintain that the classical economic doctrine of a free market balance is best in the long run, allowing enough time for all the variables to adjust to changes. 
  As David Ricardo put it, in the long run, the economic body heals itself. However, "In the long run, we are all dead," as Keynes responded.
   Even so, the economic body grows and changes. Adam Smith described the economic body. Karl Marx noted that capitalism has within itself the "seeds of its own destruction," which would lead inevitably to socialism. Later, economist Joseph Schumpeter described the "creative destruction" aspect of capitalism, which meant that as an economic body grows and creates new material, it destroys the old.

   As in so many things, however, a greater truth is to found somewhere between the two extremes of totally free capitalism and fully controlled socialism. Let's call it social capitalism, where the efforts of the many are combined with the talents of the few -- or the talents of the many join the efforts of the few -- for the welfare of all.
   And that goal may call for a coordinator -- government -- to sponsor and administer the programs needed for the common weal.

Bankers: Be Warned

   If Robby the Robot were a Federal Reserve regulator, this would his message, translated to Robotese from the Fed announcement Monday: Bankers, be warned. Get your collective act together, because we'll be watching more closely.
   Large bank holding companies, the Fed said, have "considerably improved" their practices, but they have "more work to do" when it comes to setting up the capital they need to cope with economic and financial stress.
   So, the regulator emphasized, bankers need to "focus on the specific risks they could face under potentially stressful economic conditions."
   Federal Reserve evaluators surveyed their own observations over the past three years, and noted that they will add 12 firms to the 18 that participated in this year's Comprehensive Capital Analysis and Review. The review will deal with capital planning and risk accounting at firms with more than $50 billion in total assets.

   Comment: Such risk monitoring should have started before the crisis.

Political Doldrums

The Party of No could become the Party of Go.
Not as in "You guys go away and leave things to us,"
but as in "Let's go forward together."

   It may take a force of nature matching Hurricane Sandy to free the Republican Party from its doldrums of exclusionary politics.
   For several years, Tea Party supporters and their radical brethren have pushed the party ever further to the political right, convinced of the Great Truth of their beliefs to the exclusion of any dissenting voices.
   A consequence of this marginalization of those who disagree only thins their ranks and sends the True Believers further away from the mainland middle ground. Out to sea, as it were.
   This is not to say that right wing radicals never succeed in dominating a government and imposing their views on the general population. It has happened before. There is often more danger to individual freedoms from the Radical Right than from the Looney Left.
   It's a paradox, considering that the loudest chant from the right is about individual rights and freedoms. Yet taking them away is often what the Radical Right does. They believe that since they're right, everyone else must be wrong. No compromise and no surrender. Ever.
   "Better dead than Red" was a siren call in America some 60 years ago, and too often, that conclusion applied not to the speaker but to the leftist opposition. Any who disagreed with the Received Wisdom and Truth were deemed either looney or criminal, or both. At their most charitable, the True Believers deemed opponents misled and misguided, and in need of re-education.

   So to the point. Will there be someone stronger than the storm to persuade the Radical Righteous to come back to the political mainland, and work together for the common weal?

   Current TV ads promote the New Jersey Shore and its people as "stronger than the storm," who joined forces under Gov. Chris Christie's leadership to recover from weather damage and make the region a good vacation destination again.
   Christie has been riding the wave of approval generated by his aggressiveness on behalf of storm-battered New Jerseyans, and he's putting it to good advantage in his campaign for a second term as governor.

   The question now is whether Christie can use that post-storm popularity to steer the Republican Party out of its political doldrums and generate mainland popularity.

   In short, is Christie the political redeemer the GOP needs?

The Calculus of Living

What do they live on, and where?
   
   It's been well documented that people with more education get better jobs at higher pay than those with less than a high school diploma. But consider some numbers:

   More than 3 million people graduate from high school in the United States yearly, according to U.S. Census surveys, and two-thirds of them go on to college. Another 3 million finish college -- half with bachelor's degrees, and the rest with doctorates, master's or associate degrees.
   Not to toss around too many numbers too quickly, but clearly that means at least 3 million well educated people joining the American workforce every year -- probably more.
   Meanwhile, less than half the people in the workforce age 19 to 29 are working full time, although the official unemployment rate for those with bachelor's degrees is 3.8 percent. This, however, counts all those degree holders age 25 and older. The unemployment rate for those age 16 to 19 is 23.7 percent, the Labor Department said.

   Now consider this: The average hourly wage nationwide is about $24, which means weekly pay of about $900. And a useful financial guideline is that monthly housing costs should be approximately that of a weekly income.
   Now try renting an apartment for $900 a month, assuming you make that much. In other words, one week's pay equals one month's rent.

   Real estate agents typically handle rental units in the mid- to high-end range, and an inventory of available apartment rentals would count only those units. A quick scan of housing ads indicates that a one-bedroom apartment would cost at least $800 monthly, depending on the neighborhood, with many others in housing developments going for a lot more, in some areas for as much as $2,000 monthly. Moreover, these apartments would be in suburban areas, within commuting distance of urban areas with higher-paying jobs.

   Here's another number: That average weekly pay of $900 means yearly income of $46,800. Sounds good, except that for many college graduates with teaching certification, their first job typically pays less than half that.

   Currently, with the austerity mongers demanding severe cutbacks in government spending, that means fewer teaching jobs available, and with recessionary forces still not defeated, companies are reluctant to hire. Result: America's roll of the unemployed totals 11.5 million people.
   So far, anger and bitterness among college and high school graduates unable to find work and gather the independence to leave their parents' roof has not sparked a serious problem in America. Many graduates, both high school and college, are opting to continue their studies and not enter the workforce, hoping that the recessionary storm will blow over while they hunker down in academia.

    Assuming, of course, that Mom and Pop still have jobs and can afford more school for the offspring.

Industrial Evolution

   Jobs go where the workers are.

   Simply put, that's what powered the Industrial Revolution several hundred years ago, and that's what powered the growth and subsequent decay of American cities in the 20th Century.
   As mechanical harvesting devices became available in agriculture, large farming families found themselves with more people than could be usefully employed in farm work. Many of them left the farm and went to cities in search of work. Result: Cities had abundant labor, some of them skilled in operating machinery, and this attracted manufacturers who could utilize machines to increase their production. This is how the Industrial Revolution began in Europe, powered by not only machines, but by an abundant supply of labor as workers left the farms and migrated to cities.
   
   Land, Labor, and Capital, and their associated costs -- rent, wages and interest -- continue to drive business decisions, even as they did in the past. These factors came into play as the textile industry grew in New England in the early 19th Century. Factories were built next to streams and rivers, to take advantage of flowing water to power the mills -- a capital investment. Also, there was a plentiful supply of workers, including immigrants and those pushed off farms as machines increased productivity there.
   Later, as union contracts pushed up labor wage costs, textile firms left New England and moved South, taking advantage of cheaper costs as mills powered by coal-fired boilers made location -- next to streams --- less important. Moreover, moving to the South also put textile mills closer to their supply of cotton, and to coal mines for fuel to power their mills.
   In addition, labor unions had not yet gained a foothold in the South as they became stronger in the North, so wage costs were lower.

   This principle -- of manufacturers setting up or relocating operations in areas where they could minimize cost and maximize profit -- is as true today as it was in the early years of the Industrial Revolution and in 19th Century and early 20th Century America. Manufacturing began in cities because that's where the biggest supply of labor was. But it's also true that workers migrate to areas such as cities because that's where the jobs are.

   The Garment District in Manhattan's New York City was famous for providing jobs to newcomers. Eventually, factory owners began to look for ways to lower labor costs, and they found the answer in other regions and other countries. More workers at lower wages. 

   Time was, Democratic machine politics dominated cities and urban areas in America as workers got together to form unions and negotiate better wages and working conditions from the owners of the factories.
   As transportation improved, the suburbs burgeoned with workers commuting from their picket-fenced houses in the suburbs to their well-paying jobs in the cities.
   Soon, employers followed them, as rents rose and technology advanced. It was cheaper to build a new plant on vacant land, complete with newer, more efficient machines, than to upgrade a manufacturing facility in a crowded city. Plus, workers no longer had to commute.
   Meanwhile, small independent farms were absorbed by corporate agribusiness, with their ability to buy expensive machines to increase productivity and thus reduce labor costs, and -- in areas where labor-intensive crops still needed more workers, they had the political influence to gain exemptions from minimum wage and hour laws. In turn, this sent the more skilled and educated workers to cities and factory jobs, leaving openings for newcomers willing to accept the lower wages.

   All along, of course, there were -- and are -- abuses, as owners try to keep labor costs down and unions out. Factory conditions in cities were sometimes notoriously bad, and often led to disaster. Prominent examples are the Triangle Shirtwaist Co. fire in Manhattan's Garment District in 1911, and the Rana Plaza garment factory collapse in Bangladesh last April.

  So it's true that workers go where the jobs are. But it's also true that jobs go where the workers are.

 Which comes first?

Voter Turnout Update

   A bit more than 10 percent of eligible voters turned out Tuesday to participate in New Jersey's primary election to choose candidates to succeed Sen. Frank Lautenberg.
   About 480,000 citizens voted in either the Republican or the Democrat ballots, with 130,000 on the Republican side (two candidates), and 350,000 on the Democratic side (four candidates). New Jersey has a total population of 8.86 million, with 4.6 million registered voters.
   Local school board elections do little better; the state estimated that only 15 percent of those eligible show up to vote on school budgets and candidates.

   In national elections since 1996, according to a Census Bureau report issued in May, "the number of citizens eligible to vote has increased in every presidential election, as has the number of citizens who have reported voting."
   Last year, however, the number of White, non-Hispanic voters dropped by 2 million, while the number of Blacks, Asians and Hispanics rose by 3.67 million, according to Census data.

   These are only some of the relevant numbers. It is true that voting and registration rates "are historically higher in presidential election years than in congressional election years," the Census report noted, as well as in state primary elections and in local school elections.

   All of which returns to the question raised in the previous posting: Which is better, to encourage turnout by supporters, or to limit voting by potential opponents?

Voter Fraud and Voter Turnout

Allegation: Too many ineligibles are voting.

Premise: Ineligibles are in fact showing up to vote.

   Remember Tammany Hall under Boss Tweed?  Those were the glory days of voter fraud, when the motto was "Vote Early and Often."
   More recently, there has much more ado about voter fraud, with allegations of illegal aliens (picture little green men shaped like pickles) showing up in great numbers to cast ballots. The solution, many claim, is to require photo identification cards, so that only those really eligible get to vote.
   But a more relevant problem may be voter turnout, encouraging the many millions who are actually eligible to show up and vote.

   Generally, more than one-third of eligible Americans fail to vote in Presidential elections, and in some years the number of non-voters is nearly half of all those eligible.
   The largest proportion, according to statistics kept by the Federal Election Commission, was in 1960, when 62.8 percent of the voting age population turned out in the Kennedy-Nixon contest. And in the 80 years since these results were kept, the lowest percentage of voter turnout was in 1996, when 49.0 percent of the eligible population showed up to elect Bill Clinton over Bob Dole or Ross Perot.

   A few months ago, the Conservative Web site TrueTheVote reported it found 99 cases of "potential felony voter fraud," and that 46 states "have prosecuted or convicted cases of voter fraud" since the year 2000. The site does not indicate how many of the 99 potential cases resulted in convictions, nor does it give a time frame for these 99 cases.
   More recently, ABC News reported that "of 197 million votes cast for federal candidates between 2002 and 2005, only 40 voters were indicted," and that of those 40, there were only 26 convictions or guilty pleas. That amounts to 0.00000013 percent of all votes.

   So to hear all the hooing and hawing, one would think that polling places are being inundated by  illegal aliens and/or other types of ineligible voters.

   A better answer would be to increase the percentage of those actually eligible to show up. Presidential elections attract, at best, perhaps two-thirds of the eligible population. Other elections -- state and local contests, as well as non-presidential federal elections -- attract even fewer voters.

   Compare the U.S. turnout percentage with that of Canada, which in its best year brought a 79.4 percent turnout in 1958, two years before JFK's victory in the U.S., with its record turnout of 62.8 percent. Canada's lowest turnout year was in 2008, with a 58.8 percent eligibility turnout. And that's still better than the 49.0 percent who showed up in the Clinton-Dole-Perot year of 1996.
   In the United Kingdom, the lowest voter turnout was in 2001, which attracted 59.4 percent of eligible voters; its best year was 1950, when 83.9 percent of voters showed up.

   So is there a problem in America with voter fraud and ineligible voters clouding results? Or is it that one side wants to better its own chances by limiting the numbers of those likely to vote for the opposition? And would it be a better solution to devote resources to increasing overall turnout, rather than sniping at the potential opposition?
   Or is one side too afraid it will lose if it increases overall turnout?

Housing Barometers

      Of the many components that go into building an economic forecast, the various contributors to housing sales may be the most useful.
   Consider: The ability of a family to purchase a home depends on many factors, the first of which is having a job with a decent salary and a relatively secure future, as well as the ability to afford a down payment and take out a mortgage with a reasonable interest rate.  That's five factors right there.
   Next, consider the price of the home, which will depend partly on its size, age and location. That's four more.
   Next, we get into the slightly more academic aspect known as supply and demand. By this we mean not only the supply of homes, new and existing, available for purchase, as well as the demand for housing and the willingness of owners to sell at a price a buyer is willing to pay. And that price is highly negotiable. Regardless of what an owner thinks the property is worth, its value is the price a buyer is willing to pay, and no more. The trick is to match the two.
   Then there is the supply and demand of mortgage money, which partly affects the interest rate. And there is the willingness of lenders to approve a loan to an individual or family.

   Given all those variables, what is the state of the housing market in America, and what does it bode for the economy as a whole -- or vice versa?

   Existing-home sales have declined, according to the National Association of Realtors, a trade group of sales agents, but the median price nationwide has been rising at double-digit rates for months. In economic terms, this means the supply of homes available for sale has declined, and prices have risen as demand from buyers holds reasonably steady.
   The NAR pointed out that the inventory of homes listed as available for sale is down 7.6 percent from a year ago. And this, said NAR chief economist Lawrence Yun, "will continue to broadly favor sellers and contribute to above-normal price growth."
   Those numbers, by the way, are for June, and were released in late July. Fresh numbers are to be issued before this month is out.
   Meanwhile, new single-family homes sold in June at a rate 8.3 percent above May, and 38 percent above a year-ago, according to the U.S. Department of Housing and Urban Development.
   Builders themselves are more confident, according to the National Association of Home Builders (NAHB).  One reason: The inventory of existing homes available for sale is down, which provides more opportunity for builders of new homes.
  Provided, of course, that buyers have jobs and mortgage money is available. Mortgage rates have risen to 4.61 percent, from 4.58 percent last month, but even so, the Mortgage Bankers Association has reported that loan applications to buy new homes rose 14 percent in July compared to June.
   All numbers are national averages, and do not reflect local conditions. That brings up the classic determinant of location, location and location.
   Housing, unlike employment, is a local market. A worker can move to another part of the country, or even to another country, in search of a job. Moving a house is a far more complex project.

   All of which brings up the critical issues of jobs and wages. With the unemployment rate at 7.6 percent, and the federal minimum wage at $7.50 an hour, virtually no one in a minimum wage job can afford to buy -- or even rent -- a home.
   Again, Economics 101 and the Law of Supply and Demand applies. Where there's a shortage of labor, pay scales rise to attract workers. In some cases, with an abundance of labor, pay scales may decline, but minimum wage laws erect a floor below which firms cannot go. However, they can, and sometimes do, relocate the business in search of lower wage costs.

   Bottom line: Builders and sales agents are optimistic, mortgage rates are below 5 percent, and those with secure jobs at decent salaries are looking to buy homes.

   As for those without secure jobs and decent salaries ... 

   Perhaps the market will worry about them when the supply of comfortable buyers and their demand for housing, as well as their ability to buy, all fall down.

Demographics is Destiny

   The male WASP (White Anglo-Saxon Protestant) is a minority in America, and always has been. Even so, most of the political and business power for many years was concentrated in the hands of these few. But that's changing.
   Until relatively recently, every member of the United States Supreme Court was a white, male Protestant. Today, there are none.
   In 1960, some 75 percent of foreign-born Americans came from Europe, according to Census Bureau data, with 9 percent coming from Latin America and 5 percent from Asia. In the 2010 Census, the numbers had changed sharply. Only 12 percent came from Europe, compared to 53 percent from Latin America and 28 percent from Asia.
   In terms of the total population, in 1960 some 9.7 million Americans, or 5.4 percent of the total, were born in other countries. Fifty years later, 40 million Americans were foreign-born, or 12.9 percent of the total population, according to Census data.
   In the 1960 Census, 1.3 million Americans said they were born in Italy -- the leading contributor of foreign-born resident -- with Germany in second place, sending 1 million. The 2010 Census showed Mexico as leading, with 11.7 million residents reporting they were born there. China was second, reported by 2.2 million residents, and India was third, with 1.8 million. No European country made the top ten list in the most recent Census, a reverse from 50 years earlier, when no Asian nation was listed in the top ten. Only Mexico was recorded on both lists: In first place in 2010, up from seventh place 50 years ago, when 600,00 reported Mexico as their birthplace.

   Prejudice against the foreign-born has long been commonplace in American history. In the mid-19th Century, the biggest target comprised Irish Catholics, and that continued well into the20th Century. One of the most flagrant examples was found among employers, who used well-understood abbreviations in their advertising: "Help Wanted: NINA" (No Irish Need Apply).  Later newcomer groups such as Jews and Italians suffered similar discrimination.
   Today, the target of newcomer dislike comprises primarily Hispanics, Asians and those from the Indian Subcontinent.

   Will this continue? Perhaps. But consider this: The U.S. and Europe are still wallowing in economic recession, while China's economy grew by 7.5 percent this year,  and that of Vietnam has grown by at least 5 percent each year for the past five years, and that pace is expected to continue into next year.

   There must be something in America that still attracts newcomers, despite the widespread, continuing discrimination and economic recession.

News and Comment

Be careful what you wish for. You may get it.

   News: Two small email providers have decided to shut down their messaging service and destroy their files rather than turn them over to government snoopers. This even before it's clear that the scoopers have demanded the files. The companies cite privacy issues as the reason.
   Meanwhile, President Obama is trying to reassure the American people that such surveillance is necessary to combat terrorism, and the public needs to be more comfortable with government watchdogs.
   Comment: Do you still think Edward Snowden was a traitor in exposing the National Security Agency's trolling through the electronic files of American citizens? Watchdogs can bite.

   News: The chairman of the Republican National Committee has threatened to deny NBC's News Division access to presidential debates if the NBC Entertainment Division goes through with its plan to broadcast a film biography of Hillary Clinton. The odd thing is, the proposed biopic is to be produced by a unit of the Fox empire, controlled by Rupert Murdoch.
   Comment: Can you say "petty"?
   It's reminiscent of Protestant Loyalists in Northern Ireland demanding the right to march through Catholic Republican neighborhoods chanting "Nyaah, nyaah, we beat you" as they celebrate a Protestant victory over Catholics at the Battle of the Boyne on the 12th of July, 1690 -- more than 300 years ago.
   Even now, police moved in yesterday in as nationalists backing unification with the Republic of Ireland were blocked by loyalists insisting that Ulster remain part of the UK.

Too Big to Fail?

   Economists have long said that when the U.S. sneezes, the rest of the world catches cold. But there may come a time when that will no longer be true. Similar things have happened before, so there's no reason it can't happen again.
   Worldwide, the U.S. is the largest and most productive of any nation, with GDP of $16 trillion. That's a quarter of the world's total output of goods and services, and double the value of the world's second largest economy, China, which has a GDP of $8.2 trillion.
   America is also a major market for merchants in other countries, with total imports of $2 trillion yearly. That's roughly the same as the total GDP in Canada ($1.8 trillion), Mexico ($1.2 trillion), Russia ($2.6 trillion), Spain ($1.8 trillion), France ($1.3 trillion), France ($2.6 trillion), Germany ($3.4 trillion), or the UK ($2.4 trillion).
   So when Americans stop buying stuff from overseas, it's easy to see why a slump in the U.S. economy strongly affects economies in other nations. However, it's important to remember a basic principle of accounting: Worldwide, the values of exports vs imports -- one on each side of an accounting ledger -- always balance. A foreign trade deficit may be a useful number for business and government in a single nation to consider, but in the case of the U.S., that deficit -- $34.2 billion in June -- amounted to about 2 percent of the total GDP of $16 trillion.
   In economic terms, then, the U.S. is the world's dominant power. Was it always so? No. Will it always be so? Maybe, maybe not.

   There was a time when the Roman Empire was the world's dominant power. Later, Spain was the richest and most powerful. Then came France, and after that, Britain.
   Some nations achieved dominance through economics and world trade, others by military means, or a combination of the two. Spain focused on acquiring the most gold, but in the process impoverished many peoples of North and South America.
   Britain used a colonial approach, where colonies supplied raw materials to UK manufacturers, and had to buy the finished products from them.
   Colonialism was rife in the 17th, 18th and 19th Centuries, and many view the wars between Britain, France and Spain as military matters for control of territory. Seen another way, they were economic matters for control of resources and markets, using the military as weapons in an economic battle.
   
   Consider this: Most wars use territorial control, politics, the egoism of political leaders, or even religion as excuses. The real reason, more often than not, is economic.

   Meanwhile, nations in so-called developed economies struggle to resume and increase their growth rates, while those in Asia and less-developed nations in the so-called Third World are prospering or have plenty of room to grow.
   Only by acknowledging this reality and working together for the common good, rather than struggling for dominance, can the world avoid pushing that economic struggle to a military one.

The New Normal

   Major economies in Asia are booming, while those in Europe are stagnating and the U.S. struggles to regain its footing.
   Germany is doing well, for the moment, but weakness in other parts of Europe may infect Germany's export business as others can't afford to buy.
   In Japan, first quarter output grew by a 4.1 percent annualized rate, seasonally adjusted, and "the near-term outlook has improved considerably," according to the International Monetary Fund. And economic performance in China over the past three decades "has been remarkable," the IMF said, with economic growth this year expected to reach 7.75 percent. However, there are "downside risks from both external and domestic uncertainties," according to an IMF report.
   Meanwhile, in Germany, the outlook through 2014 depends heavily on "a gradual recovery in the rest of the euro area" as well as a reduction in uncertainty.
   In neighboring France, the economy "flatlined" in 2012, but there may be a gradual recovery over the rest of this year, the IMF said, even though the French economy may well contract by 0.2 percent this year.
   The hope of recovery, however, is little consolation to those out of work in France, where the unemployment rate is 11 percent and rising, with unemployment among young people rivaling Spain's overall rate of about 25 percent.
   The rate of unemployment throughout the 17 nations that use the euro as a common currency is 12.1 percent, according to Eurostat, the official number-crunchers for the European Union. The savings rate is up and the volume of retail trade is down, along with the rate of business investment.
   What does this say? Those without jobs can't buy stuff, and those who are working, as well as their employers, are cutting back on spending. Governments, too, are listening to a call for austerity.

   Economics 101:  Gross Domestic Product (GDP), the total value of goods and services produced in a country, is calculated by adding up consumer spending, company investment, government spending, and net exports. And consumer spending accounts for about 80 percent of the total.
   So if consumers without jobs can't buy, wary companies cut back on investment in additional production capacity, and exports decline because consumers in other countries are also in financial straits, the result is economic recession. And if governments also close their wallets, the consequence can be disastrous.
   What's the answer? Government spending, since government has the least worry about deficit as a way of spending our way to prosperity. That, of course, is a short term solution, to be used only until the economy recovers. After that, rising tax revenue can pay off the deficit.

   Bottom line: The Western World is trying to deal with a weakening economic environment, while the major economies of the Far East are thriving.
   Keep in mind, however, that much of the Asian economy depends on exports. And if the rest of the world can't afford to buy, we all go downhill.

Wondering

What, me worry?

   The Bank of England said it will keep interest low, at 0.5 percent for government funds, until the unemployment rate drops to 7 percent from its current 7.8 percent.
   On this side of the pond, two Federal Reserve governors said the U.S. central bank may squeeze off the money pump next month, and the Fed chief put the target indicator at a 7 percent unemployment rate. It's now 7.4 percent, down from 7.6 percent in June.
   Meanwhile, President Obama announced a move to get rid of Fannie Mae and Freddie Mac as the nation's primary home mortgage guarantor. The two companies well belly up during the nation's financial crisis, and were bailed out by the government. The thinking now is to get rid of the moral hazard of letting the companies think they could be more loose in their lending, knowing the government would bail them out if they sank.
   Message: No more bailouts; you're on your own.
   Whether all these things will happen soon, or not until the economy returns to health, is another issue.

   As to economic good news, the Commerce Department reported that the U.S. international trade deficit dropped in June, as exports rose and imports declined. American firms sold more stuff overseas than they bought for resale to U.S. consumers that month. Want numbers? The value of exports in June totaled $191.2 billion, up from exports in May valued at $187.1 billion. Imports that month were $225.4 billion, down from $231.2 billion.
   In an economy totaling $16 trillion, however, a foreign trade deficit of $34.2 billion is a relatively small percentage.

Barracudas Rock

   Where have all the barracudas gone? Out to sea, for one thing, wondering whether they'll still have jobs when the newspaper storm blows over. Not to worry. There's always room for an enterprising barracuda reporter.

   Several major metro daily newspapers have announced changes of ownership in the past week, reviving the idea that the days of print journalism will soon be over.
   It's true that the industry is changing, but the sales announcements that make the biggest splashes are in major metro dailies. Smaller, suburban hometown dailies have a brighter future, thank you very much. Just ask Warren Buffett, whose Berkshire Hathaway investment firm has bought several.
   The most recent sales wave was made when the Washington Post Co. said it was selling its flagship newspaper to Amazon founder Jeff Bezos. Less of a surprise was the news that the New York Times Co. was selling the Boston Globe. The Times said it would sell the paper to John W. Henry, owner of the Boston Red Sox baseball team.
   This is not to say that either paper is likely to disappear into the annals of history, leaving barracuda reporters out of work. It does mean a corporate refocusing of missions. Corporations, after all, have a duty to make money for its shareholders.
   The Washington Post Co., owned by the Graham family, will likely change its name as it concentrates on its profitable education and other divisions, especially Kaplan, the tutoring firm. Bezos, known for his long-term outlook, may well let the Post emphasize what it does best -- gather, prepare and deliver the news to a large and solid customer base, providing a home for hard-charging investigative reporters, otherwise known as barracudas.
   Boston, with its many sports fans, academics and culture corners, is returning to local ownership in the person of Red Sox owner Henry.

   Here's a question bothering many observers: Will Bezos and Henry use their newly acquired media monsters to assail readers with their own political beliefs and agendas?
   Answer from this corner: Hardly. Those days ended with the era of William Randolph Hearst, with his front-page editorials attacking those who disagreed with his views. The Graham family didn't do it at the Washington Post, and neither did the Sulzberger family at the New York Times. Whether Rupert Murdoch will succeed in doing it at the Wall Street Journal is an open question. 
   There is as yet no solid evidence that he's trying. The WSJ has long been known for its pro-business opinions on the editorial page, but Page One and its news columns have been straightforward.
   Newsroom staff and editorial (opinion) page staff may talk to each other, but one should never influence the other. As for the advertising department, the separation from the news operations should be like church and state -- keep them apart.
   At one time, it was possible to identify a newspaper's political leanings by its name alone. Today, a general interest newspaper avoids politicizing its news coverage and focuses on neutrality, much like sports referees and umpires who are charged with enforcing the rules. That's what reporters and editors do: Enforce the rules by exposing wrongdoing and embarrassing government officials into changing their ways. Realistically, that's the only weapon journalists have -- embarrassment. They can't arrest and prosecute wrongdoers, but they can alert law enforcement officials to corruption and crime, who then take up the cause.

   Today, reporters and editors are more dedicated to their journalistic mission than ever, and less inclined to follow the dictates of the publisher-owners. At least, that's the hope here.

    A single newspaper may be the only game in town for those with a journalistic talent for investigating, reporting and writing. But there are many towns.
   Time was, talent gravitated to major cities. But as suburbs expanded, they became fertile ground for local papers, which grew in size and profitability as highways made access easy. Newsday, for example, was founded at the end of World War II, when Long Island was still largely farmland. In New Jersey, the Garden State Parkway and the New Jersey Turnpike became, in effect, housing subsidies, enabling many to move out of New York City, yet retain their jobs. But they still wanted to know what the local government was doing with their tax money, and that's where local daily newspapers stepped in, all the while providing space for local advertisers.
   
   There's no denying that technological devices have changed the news industry, with more changes to come. That said, there will still be a market for major newspapers that have the talent and resources to do things that smaller dailies cannot, even as they continue to fill a local mission.
   After all, who in Des Moines cares about issues in Philadelphia?
   Reason enough for local editors to give readers the local news they need, want and deserve, and tenacious reporters are the ones who uncover it.

   Barracudas rock!