In recession, one road led back home

Missoula native Melissa Meyer never expected that she would return home to Montana to rethink her future plans. After graduating Summa Cum Laude from George Washington University, moving home has become an unexpected time out to rethink future plans and the various roads she could take in the coming year.

The Washington Post - Her parents redecorated her bedroom soon after she left for college, as sure as everyone else in this town that Melissa Meyer would not be moving back. They took down the photos of Melissa meeting the Dalai Lama and laughing alongside Joe Biden, placing them in the closet. They packed away dozens of high school honor certificates -- valedictorian, class president, outstanding chemistry student -- and stored them in plastic boxes under the bed.

Melissa had always been too big for this town, her father liked to say. She was editor of the school newspaper, an intern in the U.S. Senate and the only student from Sentinel High School's Class of 2005 to attend college on the East Coast. On her rare visits home from George Washington University, longtime friends liked to tease her: "Hey, Melissa, are you president yet?"

So, how to explain this? Each morning, Melissa wakes up in her old bedroom, scans the foreign decor and thinks: This is the guest room now. I am the guest. I am not supposed to be here.

She graduated magna cum laude from the GW Business School in May, applied for 30 jobs at some of the nation's best-known companies, and it went nowhere. After visiting the campus career center and redesigning her résumé, she applied for 10 more jobs. Still nothing. The lease on her Foggy Bottom apartment expired in June. There was no place to go but home, with a collection of rejection letters and a haunting sense of betrayal. For 23 years, she had advanced down America's path to success -- perfect grades, a $200,000 college degree, a folder overstuffed with business cards -- only to have it dead-end back where she started.
"What was the point?" she asks.

For Melissa, that question is the legacy of the recession as she rises one Tuesday morning in early fall and begins her day with the same routine that defined her adolescence. She rummages through the refrigerator, eats leftovers from a dinner party her parents threw the night before and then retreats upstairs to prepare for a fill-in shift at the same job she held throughout high school. After changing into cowboy boots and a skirt, she borrows her parents' car and drives three minutes to work at Rockin Rudy's, a record store with a peace sign hanging at the entrance.

At Bloomberg, Modest Strategy to Rule the World

Michael R. Bloomberg, right, with Matthew Winkler in 1991. Mr. Winkler has overseen the Bloomberg news operation from its beginning.

The New York Times - PLOPPED in a white leather chair in a small office in Bloomberg L.P.’s Manhattan headquarters, Andrew Lack knows exactly how to articulate the aspirations of this 28-year-old media and technology company.

“We want to be the world’s most influential news organization,” says Mr. Lack, who oversees Bloomberg’s television, radio and dot-com endeavors.

Very clear. The most influential. On the planet.

It’s a goal several other Bloomberg executives have already mentioned to a pair of visitors. And when Mr. Lack, 62, a former head of NBC News, hears his guests wonder if something funny is in his company’s coffee — a special sauce that keeps all Bloombergians marching so efficiently and effectively to the same tune — he looks a tad chagrined.

“Oh, my! I don’t want to sound as if I’m on message,” he says, laughing apprehensively while also sending a “help me” look to a Bloomberg spokeswoman nearby.

These days, truth be told, the entire company is on message. That’s because the data behemoth that Michael R. Bloomberg created and named after himself in 1981, long before he became mayor of New York, finally has the reach, resources and appetites to try snaring the mantle of Most Influential — at least in the rarefied world of business news.

After years of being an underdog pushing its troops to be better and faster, Bloomberg now has an upper hand. Publishing giants like Condé Nast, Time Inc. and The New York Times, with their veteran scribes and rich histories, have laid off people and scaled back. Bloomberg may lack the pedigree and gloss of some of its rivals, but it has one thing they don’t right now: money to throw around.

This year alone, Bloomberg, deploying the cash spouting from its data business, has recruited refugees from The Wall Street Journal and Fortune and opened bureaus in places like Ecuador and Abu Dhabi. Its editorial staff (which includes radio, TV and Web site workers) now numbers 2,200, compared with 1,250 journalists at The Times and 1,900 at Dow Jones (a figure that includes the newswires and the Journal staff).

When the 80-year-old BusinessWeek went on the block, Bloomberg opened its wallet and snatched it away from circling private equity firms in October for just $5 million in cash — a relatively small sum that still represents a big change. For the last decade, Bloomberg has barely bothered to venture outside the realm of high finance; its news was produced to help subscribers to its terminals make more money for themselves.

With BusinessWeek, likely to be renamed Bloomberg BusinessWeek, the company is setting its sights on a much broader audience. That includes Main Street readers and, much more important for Bloomberg, senior executives, government leaders and other global movers and shakers. It’s also trying to revamp its Web site and television programming — long neglected inside the company — into services that appeal to people who don’t trade securities for a living.

At a time when most media companies can barely pay for cake at going-away parties, Bloomberg appears to be rolling in dough.

From Treasury, an Invitation to Financial Bloggers

The New York Times - The Treasury Department opened its doors to economic bloggers this month, and the meeting was productive in at least one respect: as John Jansen of the blog Across the Curve concluded, “After meeting them, I feel I cannot refer to them as Timothy Geithner and his minions” anymore.

Mr. Geithner, the Treasury secretary, was among the senior officials who talked with bloggers at an outreach session on Nov. 2. The two-hour round table was held on background, meaning that the bloggers could describe the sessions, but not attribute quotes to specific officials. Lengthy posts about financial system reforms — and the bloggers’ disagreements with the Treasury’s strategies — ensued.

New-media scribes have gradually made their way inside most governmental institutions over the years, but the meeting was the first for bloggers at the Treasury. Tyler Cowen, an economics professor at George Mason University who has written at the Marginal Revolution blog for six years, said it was the first time he had heard from any Treasury official.

Bills Would Set Limits on Financial Companies to Alleviate Risk

President Franklin D. Roosevelt signed the Glass-Steagall Act, passed in 1933, separating commercial and investment banking.

Wall Street Journal  -  Democrats are advancing proposals in Congress designed to limit the size and complexity of financial companies so that any collapse wouldn't damage the broader economy, a sign that lawmakers are responding to anti-Wall Street sentiment by toughening the administration's rewrite of finance rules.

The proposals would allow the government to break up healthy financial companies, and in some cases, would reassert rigid demarcations within finance that were cleared away in 1999, such as barring commercial banking firms and investment banking firms from merging.

Large financial companies, and even some Obama administration officials, are nervously watching the debate. Lobbyists for large financial-services companies, including J. P. Morgan Chase & Co., Bank of America Corp., Prudential Financial Inc., and MetLife Inc. scrambled in recent days to reach out to Capitol Hill aides, people familiar with the matter said.

Why Health Care Bill Is Good For The Economy

U.S. Unemployment Rate Hits 10.2%, Highest in 26 Years

The Labor Picture: October 2009

Unemployment Rate Grew 0.4 percentage points in Oct.

One month change	+0.4 pts
One year change	+3.6 pts

Number of Jobs 12-month change, in thousands

One month change	-0.1%
One year change	-4.0%

Discouraged WorkersNot looking for work because of the economy, in thousands

One month change	+14.4%
One year change	+66.9%

Duration Length of unemployment, in weeks

	Oct.	1 month change	1 year change
Average	26.9	+2.7%	+35.9%
Median	18.7	+8.1%	+76.4%

People With Jobs Percentage of people who are employed

	Oct.	1 month change	1 year change
Employed	58.5%	-0.3 pts.	-3.2 pts.

'Hidden' Unemployment In millions

	Oct.	1 month change	1 year change
Part time, but want full-time	9.3	+1.1%	+35.6%

Avg. Weekly EarningsFor rank-and-file workers

	Oct.	1 month change	1 year change
Average	$617.76	+0.3%	+0.9%

DemographicsTeenagers continue to have the highest unemployment rate.

	Oct.	1 month change	1 year change
White	9.5	+0.5 pts.	+3.5
Black	15.7	+0.3 pts.	+4.4
Hispanic	13.1	+0.4 pts.	+4.3
Teenagers	27.6	+1.7 pts.	+6.9

Education The unemployment rate has risen the most for those with less than a high school diploma.

	Oct.	1 month change	1 year change
Less than high school	15.5	+0.5 pts.	+5.1 pts.
High school	11.2	+0.4 pts.	+4.7 pts.
Some college	9.0	+0.5 pts.	+3.7 pts.
Bachelor's or higher	4.7	-0.2 pts.	+1.6 pts.

Source: Bureau of Labor Statistics.   Chart: The New York Times

As the unemployment rate surged to 10.2 percent in October, reaching double digits for the first time in 26 years, it suddenly seemed possible that the nation might yet confront the worst joblessness since the Great Depression.

Forbes Magazine Plans More Layoffs

The New York Times - Forbes magazine said on Monday that it planned to lay off several staff members from the editorial and business sides, a cost-cutting move in response to decreasing advertising revenue.
The announcement was made in an internal memorandum sent Monday afternoon by Steve Forbes, the company’s chief executive and editor in chief of the magazine. “We — and the entire media world — have been hit hard by both the severe recession and the seismic shifts wrought by the Web,” Mr. Forbes wrote. “Given these dramatic events, further layoffs, unfortunately, are necessary across the entire organization.”
Monie Begley, a Forbes spokeswoman, declined to specify the number of layoffs. She said that some people had been dismissed Monday, and she expected layoffs to continue throughout the week.
The layoffs came after other cuts at Forbes over the last year, including dismissing about 100 employees, having employees take five days of unpaid leave, and ceasing matching contributions to its 401(k) program.
Although circulation has been holding relatively steady at Forbes, with reported circulation at 914,000 for the first six months of this year, according to the Audit Bureau of Circulations, ad pages have not. Ad pages dropped 32.5 percent in the third quarter, according to the Publishers Information Bureau, to just above 300 pages.

Chinese Drywall Found to Differ Chemically

Florida is a center of homeowner complaints that Chinese drywall is causing health problems. A housing development in Boynton Beach, Fla., tries to take advantage of that to bolster its sales.

The New York Times - Federal investigators reported Thursday that imported Chinese drywall that homeowners have linked to health problems and odors had higher levels of some chemicals than its domestic counterparts.

The investigators, however, were unable to link the chemicals, sulfur and strontium, to the health problems and smells in thousands of homes built during the recent housing boom, and said further testing was under way to determine any possible connection.

The preliminary findings are part of a larger study by federal agencies, including the Consumer Product Safety Commission and the Environmental Protection Agency, into complaints from nearly 2,000 homeowners that their recently built homes emit odors and cause nosebleeds and respiratory problems. The owners also say their electrical appliances have failed and their wiring has corroded. It has been estimated that more than 60,000 homes could have the imported drywall. Large amounts of Chinese drywall were imported over the last few years when domestic supplies ran short. An estimated seven million sheets made in China were used as a substitute. Most of the complaints come from Florida, Virginia and Louisiana, where the widespread destruction after hurricanes lead to rapid rebuilding of damaged homes.

Gloom Spreads on Economy, but GOP Doesn't Gain

Americans are growing increasingly pessimistic about the economy after a mild upswing of attitudes in September. But Republicans haven't been able to profit politically from the economic gloom, according to a new Wall Street Journal/NBC News poll.

The survey found a country in a decidedly negative mood, nearly a year after the election of President Barack Obama. For the first time during the Obama presidency, a majority of Americans sees the country as being on the wrong track.

Fifty-eight percent of those polled say the economic slide still has a ways to go, up from 52% in September and back to the level of pessimism expressed in July. Only 29% said the economy had "pretty much hit bottom," down from 35% last month.

But a dark national view of how everybody in Washington is conducting the public's business appears to be preventing Republicans from benefiting from concerns about the direction of the country or the Democrat-led government's handling of the economy, as the minority party often does.

In fact, disapproval of the Republican Party actually has ticked upward, along with the public's general pessimism. Asked which political party should control Congress after next year's midterm elections, Democrats now hold a clear edge over the GOP, 46% to 38%, a month after the Republicans were nearly as popular. In September, the Democratic edge was 43% to 40%.

U.S. Considers Reining In ‘Too Big to Fail’ Institutions

A protester in March of 2008 framed the question that Barney Frank, chairman of the House Financial Services Committee, and Treasury Secretary Timothy F. Geithner will try to answer this week with proposals to tighten regulation.


 New York Times - WASHINGTON — Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble. The White House plan as outlined so far would already make it much more costly to be a large financial company whose failure would put the financial system and the economy at risk. It would force such institutions to hold more money in reserve and make it harder for them to borrow too heavily against their assets.
Setting up the equivalent of living wills for corporations, that plan would require that they come up with their own procedure to be disentangled in the event of a crisis, a plan that administration officials say ought to be made public in advance.

Still on the Job, but Making Only Half As Much

Good example why the economy is likely to sit slow or no growth mode for a long time. Lots of people don't have jobs. Those who do have jobs are earning less. Louis Uchitell talks about how pay cuts are more common than at any time since the Great Depression. - MT

The New York Times - MECHANICSVILLE, Va. — The dark blue captain’s hat, with its golden oak-leaf clusters, sits atop a bookcase in Bryan Lawlor’s home, out of reach of the children. The uniform their father wears still displays the four stripes of a commercial airline captain, but the hat stays home. The rules forbid that extra display of authority, now that Mr. Lawlor has been downgraded to first officer.

He is now in the co-pilot’s seat in the 50-seat commuter jets he flies, not for any failure in skill. He wears his captain’s stripes, he explains, to make that point. But with air travel down, his employer cut costs by downgrading 130 captains, those with the lowest seniority, to first officers, automatically cutting the wage of each by roughly 50 percent — to $34,000 in Mr. Lawlor’s case.

The demotion, the loss of command, the cut in pay to less than his wife, Tracy, makes as a fourth-grade teacher, have diminished Mr. Lawlor, 34, in his own eyes. He still thinks he will return to being the family’s principal breadwinner, although as the months pass he worries more. “I don’t want to be a 50-year-old pilot earning $40,000 a year,” he said, adding that his wife does not want to be married to a pilot with so little earning power.

In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.

State workers in Georgia are taking home smaller paychecks. So are the tens of thousands of employees in California’s public university system. The steel company Nucor and the technology giant Hewlett-Packard have embraced the practice. So have several airlines and many small businesses.

The Bureau of Labor Statistics does not track pay cuts, but it suggests they are reflected in the steep decline of another statistic: total weekly pay for production workers, pilots among them, representing 80 percent of the work force. That index has fallen for nine consecutive months, an unprecedented string over the 44 years the bureau has calculated weekly pay, capturing the large number of people out of work, those working fewer hours and those whose wages have been cut. The old record was a two-month decline, during the 1981-1982 recession.

“What this means,” said Thomas J. Nardone, an assistant commissioner at the bureau, “is that the amount of money people are paid has taken a big hit; not just those who have lost their jobs, but those who are still employed.”

Bloomberg Buys BusinessWeek From McGraw-Hill

Editor's note: Watch for Bloomberg to dump a bunch of money into money-losing BusinessWeek. The company still needs to be repositioned away from a weekly business magazine, a dying format, if it is going to make money. All the weekly news magazines are in trouble except for The Economist. - MT

The New York Times - Bloomberg is taking another step from the trading floor into the corner office.

The company said Tuesday that it was the winning bidder for BusinessWeek, the troubled 80-year-old title that McGraw-Hill had put on sale this summer.

Terms of the deal were not disclosed, but the price was said to be near $5 million, plus assumption of liabilities, which were $31.9 million as of April.

The magazine will continue to be a weekly print publication, rechristened Bloomberg BusinessWeek. Decisions have not been made about BusinessWeek’s staff of more than 400 people; Bloomberg will select which of those employees it wants by the end of the year, when the deal closes. Those not selected will receive severance from McGraw-Hill, said a BusinessWeek executive.

The deal is expected to close by the end of the year.

BusinessWeek was in a tough spot financially, and lost more than $800,000 dollars a week last year. Investors had pressured McGraw-Hill to get it off its books. While there was interest from parties in the private equity world, Bloomberg was seen as the preferred buyer.

“We are committed to the partnership,” said BusinessWeek president Keith Fox in an interview. “Bloomberg is acquiring a really powerful brand with strong reach among business professionals.”

Faced with slowing sales of its financial data terminals during the recession that have since improved, Bloomberg had been looking to expand its presence in consumer media. Clients for Bloomberg’s terminals are largely financial professionals, and the purchase of BusinessWeek, with its consumer and executive readers, gives the media company more access to the corporate offices as well.

With its gigantic newsroom of about 2,200 people and its aggressive reporting, Bloomberg has won a growing number of awards, but it is frustrated by its lack of cachet in the journalism world. Reporters and editors have long been frustrated by the lack of access to business executives, and they believed that limited their ability to break news and be a player in larger news coverage.

With the acquisition, Bloomberg adds name recognition and a consumer publication. The company was considering combining the Bloomberg.com and BusinessWeek.com Web sites and adding the BusinessWeek brand and journalists to Bloomberg TV. The company will continue Bloomberg Markets, a monthly magazine.

E. Coli Path Shows Flaws in Beef Inspection

Stephanie Smith, 22, was paralyzed after being stricken by E. coli in 2007. Officials traced the E. coli to hamburger her family had eaten.

Editor's Note: Great story on the dangers of E coli and how it gets into the food chain because of lax safety inspection. - MT


The New York Times - Stephanie Smith, a children’s dance instructor, thought she had a stomach virus. The aches and cramping were tolerable that first day, and she finished her classes.

Then her diarrhea turned bloody. Her kidneys shut down. Seizures knocked her unconscious. The convulsions grew so relentless that doctors had to put her in a coma for nine weeks. When she emerged, she could no longer walk. The affliction had ravaged her nervous system and left her paralyzed.

Ms. Smith, 22, was found to have a severe form of food-borne illness caused by E. coli, which Minnesota officials traced to the hamburger that her mother had grilled for their Sunday dinner in early fall 2007.

“I ask myself every day, ‘Why me?’ and ‘Why from a hamburger?’ ”Ms. Smith said. In the simplest terms, she ran out of luck in a food-safety game of chance whose rules and risks are not widely known.

Meat companies and grocers have been barred from selling ground beef tainted by the virulent strain of E. coli known as O157:H7 since 1994, after an outbreak at Jack in the Box restaurants left four children dead. Yet tens of thousands of people are still sickened annually by this pathogen, federal health officials estimate, with hamburger being the biggest culprit. Ground beef has been blamed for 16 outbreaks in the last three years alone. This summer, contamination led to the recall of beef from nearly 3,000 grocers in 41 states.

Stephanie Smith’s reaction to the virulent strain of E. coli was extreme, but tracing the story of her burger, through interviews and government and corporate records obtained by The New York Times, shows why eating ground beef is still a gamble. Neither the system meant to make the meat safe, nor the meat itself, is what consumers have been led to believe.

Ground beef is usually not simply a chunk of meat run through a grinder. Instead, records and interviews show, a single portion of hamburger meat is often an amalgam of various grades of meat from different parts of cows and even from different slaughterhouses. These cuts of meat are particularly vulnerable to E. coli contamination, food experts and officials say. Despite this, there is no federal requirement for grinders to test their ingredients for the pathogen.

The frozen hamburgers that the Smiths ate, which were made by the food giant Cargill, were labeled “American Chef’s Selection Angus Beef Patties.” Yet confidential grinding logs and other Cargill records show that the hamburgers were made from a mix of slaughterhouse trimmings and a mash-like product derived from scraps that were ground together at a plant in Wisconsin. The ingredients came from slaughterhouses in Nebraska, Texas and Uruguay, and from a South Dakota company that processes fatty trimmings and treats them with ammonia to kill bacteria.

Using a combination of sources — a practice followed by most large producers of fresh and packaged hamburger — allowed Cargill to spend about 25 percent less than it would have for cuts of whole meat.

Those low-grade ingredients are cut from areas of the cow that are more likely to have had contact with feces, which carries E. coli, industry research shows. Yet Cargill, like most meat companies, relies on its suppliers to check for the bacteria and does its own testing only after the ingredients are ground together. The United States Department of Agriculture, which allows grinders to devise their own safety plans, has encouraged them to test ingredients first as a way of increasing the chance of finding contamination.

Mining Companies Hit Wall on Mountaintop Blasting

The Wall Street Journal - WHITESVILLE, W.Va.—The coal-mining industry is trying to regroup in the wake of a move by the Obama administration to curtail mountaintop mining to extract coal.

Last week, the Environmental Protection Agency said it was holding up 79 permit applications for mining projects in Central Appalachia due to concerns the projects would damage water quality in nearby streams and violate the Clean Water Act. Another 180 applications are pending.

The companies can resubmit the applications, but uncertainty around permit approval makes planning risky.

"They're trying to find a way to kill us a little bit at a time—death by a thousand cuts," said Michael Snelling, head of surface operations for Richmond, Va.,-based Massey Energy Co., which had five permits delayed by the EPA last week. Mr. Snelling said EPA requirements to protect streams might be too burdensome for other projects.

Mountaintop mining involves blasting off the tops and dumping unused rock and dirt into valleys and streams.

The EPA has long had oversight authority over permits that relate to mining's impact on waterways but has challenged few of them--until this year.

Lost Jobs May Never Return

The Wall Street Journal - The U.S. has shed 7.2 million jobs since the recession began in December 2007. How long will it take for the economy to replace them? And where will the jobs come from?

The questions haunt people from the unemployed in San Francisco to officials in Washington. Glenn Atias lost his job as a $100,000-a-year statistician at a market-research firm in the Bay Area last summer when the work was outsourced to India. At 46 years old, he pores over job ads and online postings daily. "I'm stuck watching hundreds of thousands of people in my position grow in ranks each and every month," said Mr. Atias, who lives in Salton City, Calif., in a house worth less than the mortgage.

When unemployment benefits run out, he said, "I literally don't know how I'll pay my mortgage, how I'll pay my health care."

Economists say that when demand picks up -- as it is starting to do -- jobs eventually will follow. History shows that has always been true. But guessing which jobs will be created over the long run is often fruitless. Many of tomorrow's jobs don't exist today.

In 2003, Treasury Department chief economist Alan Krueger, then at Princeton, calculated that a quarter of U.S. workers at the time were in jobs the Census Bureau didn't even list as occupations in 1967.

Determining which fields will become popular is next to impossible. "It is very difficult, without a crystal ball, to know where the economy will be in 10 years," said Susan Wolff, chief academic officer of Columbia Gorge Community College in The Dalles, Ore. "Sometimes we think we're doing a pretty good job if we can guess where the economy is going to be in five years."http://online.wsj.com/article/SB125470053662262957.html