Yearly Archives: 2005

Saving 10% of Your Salary Is No Longer Enough

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The Commerce Department reports a surprisingly low American savings average of under 2% and for those who are dutifully socking away 10% of their pretax income it may not be enough.
Jonathan Clements:

Just when folks ought to be saving more, they are saving less. Trouble ahead? You’d better believe it.
Yes, I have heard all the arguments about how the true savings rate is higher than the 1.3% calculated for 2004 by the Commerce Department’s Bureau of Economic Analysis, or BEA. But don’t let that distract you from the bigger issue.
In a world of disappearing company pensions, skimpy bond yields, rich stock valuations and rising life expectancies, anybody interested in a comfortable retirement should be saving a truckload of money every year — and yet most folks aren’t.
Rate debate. Among pundits, belittling the official savings rate has become something of a national pastime. Some of the arguments seem a little suspect, like the suggestion that buying televisions, cars and other consumer durables ought to be considered saving rather than spending.

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Trade & Interest Rates: China sort of Floats the Yuan

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The Wall Street Journal’s Econoblog provides a useful look at China’s decision Thursday to slightly float the Yuan (this will likely drive interest rates here higher, unless we actually start to significantly reduce our deficits):

This would imply an unraveling of the Bretton Woods 2 regime and will force the U.S. to make significant and painful adjustments to its private and public savings droughts, droughts that much more than a global savings glut explain why the U.S. external balance has been worsening over time. Then, U.S. private spending, both consumption and investment, may have to fall sharply — driven by higher U.S. interest rates and a bursting of the housing bubble — relative to U.S. output to make room for an improvement of U.S. net exports.
And how much U.S. private spending may be squeezed will depend on whether there is a meaningful structural reduction in the U.S. fiscal imbalance. Less foreign financing of the U.S. external deficits would, for unchanged fiscal balance, tend to crowd out private consumption and private investment via higher interest rates. This U.S. adjustment could be painful.

Reminds of a tale that goes something like this (paraphrasing): a butterfly flaps its wings and this ends up being a hurricane halfway around the world.

US Help for China’s Internet Filtering

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Cisco’s sale of networking equipment used to filter Chinese internet traffic has drawn some well justified attention recently (Microsoft’s activities with the Chinese government has also drawn attention):

  • Rebecca MacKinnon

    Cisco argues that if they don’t do this business, their competitors will. And that will be bad for U.S. jobs. Well, as I’ve said before, at the end of the day either we believe that the ideals of “freedom” and “democracy” mean something, and are worth sacrificing short-term profit so that more people around the world have a chance of benefiting from them, or we don’t. Cisco clearly doesn’t. This is an insult to the thousands of Americans – public servants, men and women in uniform, journalists and others – who risk their lives daily in far-flung corners of the globe for the sake of these ideals.

  • Anne Applebaum:

    Without question, China’s Internet filtering regime is “the most sophisticated effort of its kind in the world,” in the words of a recent report by Harvard Law School’s Berkman Center for Internet and Society. The system involves the censorship of Web logs, search engines, chat rooms and e-mail by “thousands of public and private personnel.” It also involves Microsoft Inc., as Chinese bloggers discovered last month. Since early June, Chinese bloggers who post messages containing a forbidden word — “Dalai Lama,” for example, or “democracy” — receive a warning: “This message contains a banned expression, please delete.” It seems Microsoft has altered the Chinese version of its blog tool, MSN Spaces, at the behest of Chinese government. Bill Gates, so eloquent on the subject of African poverty, is less worried about Chinese free speech.

UPDATE: Rebecca comments on a recent Newsweek story that fails to mention her 9 years of experience in China, among other items.

Nominee Represented CUNA in Supreme Court Case

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WASHINGTON–John G. Roberts, President George W. Bush’s nominee to the U.S. Supreme Court, has a history with credit unions: He argued the AT&T Family FCU case before the U.S. Supreme Court on Oct. 6, 1997.
At the time, Roberts was a 42-year-old partner in the law firm of Hogan & Hartson. He argued the case for the Credit Union National Association (CUNA) and the National Association of Federal Credit Unions, which intervened on behalf of the National Credit Union Administration (NCUA).
The Supreme Court eventually ruled against credit unions in the case, based on a suit brought by bankers in 1990 against NCUA over the field-of-membership expansion the agency granted AT&T Family FCU, Winston-Salem, N.C. The events culminated into the push for the Credit Union Membership Access Act (H.R. 1151), which President Clinton signed into law in August of 1998.
In 1997, after arguing the case, Roberts told CUNA News Now, “It’s always a mistake to try to predict the outcome of a case from the justices’ questions.”
He explained that there was nothing credit unions and members could do to influence the court’s decision. “The court isn’t like Congress and third parties we’ve lobbied. The court is looking at the law,” said Roberts.
CUNA General Counsel Eric Richard worked with Roberts during the AT&T case. He said the nominee is “enormously talented with an exceedingly bright legal mind.”
“CUNA and the credit union movement were privileged to have been represented by him,” said Richard. “We wish Judge Roberts all the best.”

Media Changes SF Chronicle Cutting Jobs

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Michael Stoll:

“We understand that they’re losing money,” he said. “We were trying to be good Samaritans, and we got stabbed in the back.”
The paper is in a strong position to seek union concessions because it opened its financial records to a union auditor, who confirmed that the Chronicle lost more than $62 million last year. Ms. Hoyt said that in the last two months the paper has been losing money at a faster rate — about two million dollars a week* — though the loss was less earlier this year.
Because Hearst is a privately held company, it is under no obligation to explain its finances to the public. While the union has confirmed the multimillion-dollar losses, it doesn’t know all the details, such as the salary and benefits of the publisher. The union said the paper is being mismanaged and has too many managers per employee.

Via Dan Gillmor (I agree that it’s hard to believe the Chronicle is losing $1m per week).

Fingernails Store Personal Information

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Jacqueline Hewett:

Secure optical data storage could soon literally be at your fingertips thanks to work being carried out in Japan. Yoshio Hayasaki and his colleagues have discovered that data can be written into a human fingernail by irradiating it with femtosecond laser pulses. Capacities are said to be up to 5 mega bits and the stored data lasts for 6 months – the length of time it takes a fingernail to be completely replaced.

Via Macintouch

Congress Wants to Expand Daylight Savings Time to Save Energy

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Reader Erika Frederick emailed this article by John Fialka:

As a step to save energy, Congress appears poised to extend U.S. daylight-saving time for two months, starting it earlier, on the first Sunday in March, and ending it later, on the last Sunday of November.

The move was first approved in May as part of the energy bill by the House. The idea has now been agreed upon by House and Senate committee staffs, with the approval of both Republican chairmen and ranking Democrats. That means it is likely to be approved by the full House-Senate conference committee, which begins squaring the differences between the House and Senate versions of the bill this week.

The change is not without controversy:

The Air Transport Association has asserted that its members, long-distance American airlines, could lose millions of dollars because of schedule disruptions that the proposal would cause by throwing U.S. arrivals at foreign airports out of synchronization with European schedules and Europe’s system of awarding “slots,” or landing rights at airports.

Some large church groups also oppose extending daylight-saving time into the early spring and late fall, because it would require children to wait for school buses in the dark. “Without the light of day, they are more susceptible to accidents with school buses, or other motorists, and the darkness also provides cover for individuals who prey on children,” said the Rev. William F. Davis, deputy secretary of the U.S. Conference of Catholic Bishops, in a letter written to the House sponsors of the measure

The proposed change is part of the Energy Bill.

Best Insurgency Books

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T.X. Hammes:

The heaviest responsibility a commander will know is taking his soldiers to war. How can he arm their minds as well as their bodies? A former U.S. Marine Corps colonel and expert on insurgencies culls the best books from various military reading lists.
Thousands of years ago, the Chinese sage Sun Tzu wrote down one of the first known lessons on war, The Art of War. Somewhat more recently, Maj. Gen. James Mattis wrote in the Feb. 2004 Marine Corps Gazette, “We have been fighting on this planet for 5,000 years, and we should take advantage of the experience of those who have gone before us. . . . Those who must adapt to overcoming an independent enemy’s will are not allowed the luxury of ignorance of their profession.” The study of books is one antidote to that ignorance. What books are military leaders recommending that U.S. soldiers read to gird themselves for today’s struggle in Iraq?

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Jay Rosen Pieces Together Rove/Plame

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Jay Rosen:

Lying to the press—though a serious thing—is what all administrations do. In Washington leaking to damage people’s credibility or wreck their arguments is routine, a bi-partisan game with thousands of knowing participants. I rarely see it mentioned that Joseph Wilson (who is no truthtelling hero) began his crusade by trying to leak his criticisms of the Bush White House. When that didn’t work he went public in an op-ed piece for the New York Times.

But business as usual is not going to explain what happened in the Valerie Plame case, or tell us why its revelations matter. For that we need to enlarge the frame.

My bigger picture starts with George W. Bush, Karl Rove, Karen Hughes, Andrew Card, Dan Bartlett, John Ashcroft plus a handful of other strategists and team players in the Bush White House, who have set a new course in press relations. (And Scott McClellan knows his job is to stay on that course, no matter what.) The Bush team’s methods are unlike the handling of the news media under prior presidents because their premises are so different.

Butman & Petersen Question SBC’s AT&T Acquisition

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TDS Metro’s Jim Butman and Drew Petersen raise many useful questions regarding the proposed SBC/AT&T merger:

The proposed purchase of AT&T by SBC has the potential to demonstrably alter the way a majority of our state’s commercial and residential telecommunications customers conduct their daily affairs. For most urban U.S. consumers today, especially residential and small business patrons, the communications market is rapidly deteriorating into a duopoly dominated by the Bells and cable operators. Wisconsin, however, due to a fledging economy and classic entrepreneurial spirit, is fortunate to have some very credible competitive alternative providers operating in the state’s more urban markets like Madison, Milwaukee, Green Bay, Waukesha, Janesville, Kenosha and Racine.
Competition in the telecommunications industry has done wonders for consumers and businesses across Wisconsin, resulting in small business savings of roughly 30 percent annually. Competitors have led the way in accelerating the deployment of world-class technology such as high-speed Internet and the provisioning of outstanding services at value-based pricing. Competition benefits anyone that has selected an alternative provider and even those who have not.

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