After receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending it. Some won't even talk about it.
"We're choosing not to disclose that," said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.
Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money, said that while some of the money was lent, some was not, and the bank has not given any accounting of exactly how the money is being used.
"We have not disclosed that to the public. We're declining to," Kelly said.
The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions:
- How much has been spent?
- What was it spent on?
- How much is being held in savings
- What's the plan for the rest?
"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.
Some banks said they simply didn't know where the money was going.
"We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout. Read the entire story here
In the end, as with all the great frauds, Madoff’s undoing was that he ran out of cash. For years, he paid returns to early investors with money he raised from new investors, which is the hallmark of every Ponzi scheme.
When the economy got tough, and his customers sought about $7 billion in redemptions, Madoff didn’t have the funds. It was around this time that he confessed to running a giant scam, the authorities say. The losses, by Madoff’s estimate, might be $50 billion. Heaven knows how many clients of other money managers could meet the same fate as redemption orders pour in.
It’s no great feat to arrest a man who tells a federal agent “there is no innocent explanation” for his actions and that he expects to go to jail. The Securities and Exchange Commission blew many chances over the past decade to uncover his ruse, even after receiving detailed tips.
It’s unclear why the SEC failed to stop Madoff, whether because of corruption, a lack of smarts, a dearth of interest, or some combination. We can say with confidence, though, that many other huge frauds are still operating freely today -- and that the government might not be inclined to intervene, even when it knows all about them.
How is it that queers became the odd ones out at such a momentous turning point in history? By pushing an agenda of stupid issues like gay marriage.
Not for me. Not for my family, with its various men, each of whom I love in a different way, a child, and two moms. Not that my family is any sort of queer norm. But that's the beautiful thing about queer culture: there is no norm. We piece together our families, holding on to those relationships that work.
Obama will find many dire challenges in his inbox, but none—not Iraq, not Russia, not Pakistan, China, Afghanistan—is as important as this one huge task: to restore confidence, certainty and reform to America. It's a lot easier said than done. But if he manages to pull it off, people might well start wondering whether Barack Obama has some supernatural powers after all.
The former Vermont governor and chair of the Democratic National Committee (DNC) has become an unlikely advocate for Democrats across the country, particularly in so-called red America. His passion for showing up in unexpected locales is not based on wishful thinking or stubborn naivete but rather political necessity. Dean's favorite quote, which he repeats over and over, is Louis Pasteur's "Chance favors the prepared mind." The way he sees it, you never know when any state, even the Sooner State, might get a jolt of blue. After all, just look at what happened in 2006, when Democrats flipped both houses of Congress. Or this past November, when Barack Obama won Indiana, North Carolina and Virginia, along with three previously red Western states, and the party picked up Congressional seats in places like Alabama, Alaska, Idaho and Mississippi.
Howard Dean's Scream
So may have read the headline Friday, had not President Bush stepped in to save GM, Ford and Chrysler, which Senate Republicans had just voted to send to the knacker's yard.
What are Republicans thinking of, pulling the plug, at Christmas, on GM, risking swift death for the greatest manufacturing company in American history, a strategic asset and pillar of the U.S. economy.
Is the Republican Party so fanatic in its ideology that, rather than sin against a commandment of Milton Friedman, it is willing to see America written forever out of this fantastic market, let millions of jobs vanish and write off the industrial Midwest?
Fine. But why this "Let-them-eat-cake!" coldness toward U.S. auto companies? General Motors employs more workers than all these foreign plants combined. And, unlike Mitsubishi, General Motors didn't bomb Pearl Harbor.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.
O.K., maybe my example wasn’t hypothetical after all.
So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.
We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.
But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.
Read the entire Krugman column here.
Amity Shales reports in Bloomberg, "The difference between recession and depression is simple. Recession, goes the saying, is when you lose your job; depression is when I lose mine."
These days recession is starting to feel like depression to a lot of people. Recession starts to feel like depression every night at General Motors Corp. when they turn off the escalators and turn down the lights in the faint hope that one more person will get to keep his wage and benefits one more day.
A growing number of companies are sending workers a grim holiday message: Head for the unemployment line.
Aetna Inc., Cooper Tire & Rubber Co. and Western Digital Corp. said Wednesday they would cut a combined 4,900 jobs. And Eastman Chemical Co. said it would cut an unspecified number as it tries to slash costs by $100 million in 2009.
The announcements came a day before the government is expected to report that jobless claims remain near their highest point in 26 years. Economists surveyed by Thomson Reuters project that 558,000 workers filed new claims last week.
The downturn has spread far beyond the housing and banking businesses where it began, battering workers in nearly every sector of the economy. Cooper Tire said Wednesday it would cut 1,400 jobs. Western Digital, which makes computer hard drives, said it plans to cut 2,500. Aetna, the third-largest U.S. health insurer, said it is cutting 1,000 jobs — 2.8 percent of its work force — to reduce costs and focus on growing areas.
The reports came one day after drug maker Bristol-Myers Squibb said it will eliminate 800 jobs by the end of this year.
"Things are changing so rapidly, and deteriorating so rapidly, that firms don't have a choice," said Nariman Behravesh, chief economist of IHS Global Insight. "It looks like the economy is in somewhat of a free fall."
Falling sales are squeezing companies' cash just as tighter credit makes it harder for them to borrow to fund operations, Behravesh said. The combination means this time, some companies can't afford to wait until after the holidays to cut jobs.
Many people with jobs are so fearful about their employment security that families are reducing spending, giving retailers one of the worst holiday shopping seasons in decades.
Electronics retailer Best Buy Co. said this week that it faced "the most challenging consumer environment in its history" and would offer buyouts to all 4,000 of its headquarters employee.
Its rival Circuit City Stores Inc. filed for Chapter 11 bankruptcy protection last month. Retailer KB Toys filed for bankruptcy protection Thursday.
The 86-year-old company said in a filing that its debt is "directly attributable to a sudden and sharp decline in consumer sales" because of the poor economy.
That a toy retailer filed for bankruptcy just before Christmas shows how bleak things have become, since such stores make up to half of their sales during the holidays. But analysts expect toy sales this holiday season to be flat or down slightly from last year's total of $10.4 billion, according to market research firm NPD Group, because consumers are cutting back amid the recession....
KB Toys, which says it has about $480 million in annual sales, said in the filing that it had debts between $100 million and $500 million and total assets in the same range.
Vendors top the list of unsecured creditors. The toy retailer owes Hong Kong-based toy manufacturer Li & Fung about $27.2 million, El Segundo, Calif.-based Mattel Toys $1.3 million and St. Louis-based Energizer Battery more than $728,000. Other creditors are Hasbro Inc. and the maker of Legos.
As each Wall Street bailout receives approval, with or without appropriate conditions, we are assured that the risks of bankruptcy are simply unacceptable. If American International or Citigroup went down, who knew what hell might break loose? There was some merit in that argument. The truth is that we are just as ignorant of what destruction will ensue in the broad economy should government allow auto to go broke. If and when that happens, the opinion polls will shift overnight. But it will be too late.
According to the Wall Street Journal:
Democratic Illinois Gov. Rod Blagojevich and his chief of staff, John Harris, were arrested today in Chicago amid charges of political corruption. The two were charged with conspiracy to commit mail and wire fraud and solicitation of bribery. According to the Justice Department, the two men allegedly engaged in “ongoing criminal activity” including:
–Conspiring to obtain personal financial gain through the appointment to fill President-elect Barack Obama’s U.S. Senate seat. According to the indictment, Blagojevich sought a highly paid job at either a nonprofit foundation or labor organization, as well as a job for his wife on a corporate board where she would earn at least $150,000 a year.
–Blagojevich told an adviser he might “get some (money) up front, maybe” from an unnamed “Senate Candidate 5” if he named that candidate to the Senate. The candidate allegedly pledged to raise money for the governor’s re-election.
–An associate of “Senate Candidate 5” approached Blagojevich. “We were approached ‘pay to play.’ That, you know, he’d raise 500 grand. An emissary came. Then the other guy would raise a million, if I made him (Senate Candidate 5) a senator,” Blagojevich said in a taped recording.
–In a Nov. 10 phone call with advisers, Blagojevich discussed getting a lucrative labor job in exchange for appointing an unnamed candidate whom he believed was favored by Obama. In a Nov. 11 conversation, Blagojevich acknowledged that Obama wanted an unnamed “Senate Candidate 1” for the seat but “they’re not willing to give me anything but appreciation. [Expletive] them.”
–Blagojevich also allegedly weighed appointing himself to the seat, complaining of being “stuck” as governor, as well as the belief he would be able to have more resources in the senate if he was indicted as a sitting senator versus governor. “if…they’re not going to offer anything fo any value, then I might just take it,” he said in a recorded Nov. 3 phone conversation, adding in a later conversation that day that he would “drive a hard bargain” for the seat.
–Blagojevich expressed a desire to remake his image for a potential 2016 presidential run. In the days following the election, he also discussed his potential appointment as either secretary of health and human services or energy, or various ambassadorships.
–Threatening to withhold assistance to the Tribune Co. regarding the sale of Wrigley Field to get members of the Chicago Tribune’s editorial board who had been critical of Blagojevich fired. Blagojevich informed Harris that state assistance would be withheld unless the editorial board writers were fired. He told Harris to tell Tribune officials that “our recommendation is fire all those [expletive] people, get ‘em the [expletive] out of there and get us some editorial support.”
–The Tribune’s deputy editorial page editor John McCormick was singled out by Harris as “the most biased and unfair.”
–A Tribune financial adviser assured Harris that changes would be made on the editorial board; as a result Blagojevich allegedly then held a series of talks with officials to provide financial assistance for Wrigley Field.
The mail and wire fraud charges carry a maximum penalty of 20 years in prison, while solicitation of bribery carries a 10-year maximum. Each count carries a maximum $250,000 fine.
For the past five years, Hauck has worked at the local Granite Run Mall in Delaware County, Pa., but he was laid off when the mall had to cut back on Santas from its holiday display.
"I worked four days a week, 10-hour days, full days," he said. "I counted on that money every year. It's gone now."
To make up for the lack of work, Hauck commutes into New York.
"I'm coming to New York to make what I can and I'm doing whatever I can," Hauck said. "I'm doing some tree-lighting stuff and some private parties and things."
Blagojevich, a former congressman, state lawmaker and prosecutor, also was charged with illegally threatening to withhold state assistance to Tribune Co., owner of the Chicago Tribune, in an attempt to strong-arm the newspaper into firing editorial writers who had criticized him.
In addition, the governor was accused of engaging in pay-to-play politics — that is, doling out jobs, contracts and appointments in return for campaign contributions.
Court papers portray Blagojevich as a greedy, vindictive pol who couldn't wait to find ways to cash in on the Senate appointment. The charges also paint a picture of breathtaking arrogance and perhaps cluelessness, with the governor contemplating a Cabinet position or even a run for the White House despite an abysmal 13 percent approval rating and a reputation as one of the most corrupt governors in the nation.
Blagojevich becomes the latest in a long line of Illinois governors to become engulfed in scandal. He was elected in 2002 as a reformer promising to clean up after Gov. George Ryan, who is serving six years in prison for graft.
The scandal leaves the Senate seat in limbo. Illinois legislative leaders said they were preparing to quickly schedule a special election to fill Obama's seat rather than let Blagojevich pick someone.
"No appointment by this governor, under these circumstances, could produce a credible replacement," said Democratic Sen. Dick Durbin of Illinois.
Some Illinois politicians immediately demanded that the governor step down or face impeachment.
The class includes about 100,000 current and former hourly workers who were employed at Wal-Mart Stores and Sam's Clubs in Minnesota from Sept. 11, 1998, through Nov. 14, 2008.
Wal-Mart has also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws.
PAUL KRUGMAN: To some extent you can't fight it -- people will believe what they want to believe. If they can make FDR the cause of the Great Depression, they can do anything. But one thing progressives can do is make sure that the story of the Bush administration is told, in all respects. There's going to be huge pressure from the usual suspects to let bygones be bygones, to forget about everything from torture to reckless disregard of financial warnings. But I want truth and reconciliation across the board, and progressives have to make it clear that it was an ideology, not an act of God, that made this crisis possible.
Bank of America received $25 billion as part of a government bailout. Some workers carried signs Sunday that said: "You got bailed out. We got sold out."
The bank had said in a statement Saturday that it wasn't responsible for Republic's financial obligations to its employees. Republic has not commented on the sit-in.
But no indicator was quite so telling as the plaintive message left on my home answering machine over Thanksgiving weekend. A kindly Bergdorf Goodman salesperson invited members of our humble household to stop by and check out the bargains. Now, if you're not a habitué of the his-and-hers luxury department stores on Manhattan's Fifth Avenue, there are a few things you should know about Bergdorf Goodman. This place puts the haute in haute couture. It's about as welcoming to the public as North Korea. It's the kind of store where the salespeople take one look at your shoes and judge whether you're a big spender. Bergdorf Goodman cold-calling suburban shoppers? It's like college kids canvassing for Obama votes at a National Review conference.
But these are desperate times. During the late economic expansion, the well-off—and, in particular, the really well-off—thrived while the middle and working classes struggled. But in 2008, the stalwart customers of New York's luxury retailers have been falling along with the hedge funds. The investment bankers and their significant others? See ya. Rich tourists from points south and west? Not this year, y'all. Europeans and Brits fueled by their powerful domestic currencies? Adios, au revoir, cheers! Russian oligarchs? Da svedanya. In November, according to ICSC, luxury stores saw sales fall 10.5 percent. Neiman Marcus, which owns Bergdorf, reported sales were off 11.8 percent.
That deal saddled the company with a large debt burden: its total debts stand at $2.72bn, while its net assets amount to $3.75bn according to the Chapter 11 petition. Last week, Pilgrim’s Pride secured a third temporary extension from creditors, but that ran out on Monday and the company was apparently unable to persuade them to extend it again.
According to reporting from the UK Financial Times: Bratz dolls, the multi-ethnic and urban-styled rivals to Mattel’s more demure Barbie, have been ordered off the shelves of toy stores across America in a potential knock-out legal blow to their maker, MGA Entertainment.
A federal judge in California late on Wednesday ordered MGA to remove all 40 of the Bratz character dolls from retailers, in a further victory for Mattel in a long-running legal effort to crush the rival doll line.
The permanent injunction will not take effect until early next year, allowing the toys to stay in stores over the holiday shopping season.
MGA, which is privately held, said in a statement that it would appeal and seek to stop the enforcement of the order “so we can maintain the over 1,500 people that MGA employs, and continue to give our consumers a product they desire”. Read the whole FT article here.
"We have never seen as midnight an hour as we face this week," the Rev. Charles Ellis told several thousand congregants at a rousing service at Detroit's Greater Grace Temple. "This week, lives are hanging above an abyss of uncertainty as both houses of Congress decide whether to extend a helping hand."
Local car dealerships donated three hybrid SUVs to be displayed during the service, one from each of the Big Three. A Ford Escape, Chevy Tahoe from GM and a Chrysler Aspen were parked just in front of the choir and behind the pulpit.
Ellis said he and other Detroit ministers would pray and fast until Congress voted on a bailout for Detroit's embattled automakers. He urged his congregation to do the same.
Other Detroit-area religious leaders -- including Christian, Muslim and Jewish leaders convened by Cardinal Adam Maida -- have urged Congress to approve an auto aid package.
But the service dedicated to saving Motown's signature industry at Greater Grace Temple was the highest profile effort to mobilize support yet.
"Everybody can't live on Wall Street. Everybody can't live on Main Street. But all of us have lived on the side street, the working class," Ellis said. "I call it the working class because everything tells me there is no more middle class."
Continue reading the entire article here.
Pat Buchanan states: " If the GOP blocks these loans, and the industry dies, the party can forget about Ohio, Michigan and the industrial Midwest. For the Reagan Democrats will never come home again. Nor should they. By the choices we make, we define ourselves and reveal what we truly care about. Thus, consider: We bail out the New York and D.C. governments of Abe Beame and Marion Barry. We bail out a corrupt Mexico. We bail out public schools that have failed us for 40 years.We bail out with International Monetary Fund and World Bank loans and foreign aid worthless Third World regimes. We bail out Wall Street plutocrats and big banks. But the most magnificent industry, the auto industry that was the pride of America and envy of the world, we surrender to predator-traders from Asia and Europe, lest we violate the tenets of some 19th-century ideological scribblers that the old Republicans considered the apogee of British stupidity."
Read the entire article "As GM Goes, So Goes the GOP" here.
Who will be the next Stacy Driver, or Patrick Donovan? Wal-Mart has been very tight-lipped about store security, crowd control, parking lot monitoring, or any of the other responses needed to put a lid on this very visible problem. Instead, Wal-Mart finds itself issuing press releases "extending its sympathy to the family of the deceased."
"We consider Mr. Damour part of the Wal-Mart family," the retailer says, "and are saddened by his death." But the rest of America is saddened by Wal-Mart's inability to spend more of its nearly $13 billion in profits to protect its shoppers, its workers, and the American taxpayers from this chronic litany of tragedies on their premises. If Wal-Mart can spend $2 billion on advertising, it can invest more in store safety and security for the public.
These incidents at Wal-Mart do not help us "Live Better," as the corporation's motto says. They may persuade more shoppers to skip the Wal-Mart experience entirely. You can be sure that the mayhem, headlines and lawsuits are being noticed by Wal-Mart shareholders.
Best Buy’s President Brian Dunn said the depth and speed of the U.S. economic downturn was unprecedented in his 23 years in the retail business, the newspaper said, citing an interview. The company is curtailing costs by airing fewer television commercials and plugging lower prices via e-mail, the newspaper said.
The electronics retailer is also offering shoppers zero interest for 18 months if they buy $499 worth of merchandise on a store credit card, the newspaper said.
The company is pushing sales of its more lucrative private- label brands and exclusive products such as notebook computers under its Blue Label line, the Times said.
Source: Bloomberg's reporter Dan Hart.
The nation’s employers cut 533,000 jobs in November, the Bureau of Labor Statistics reported Friday.
Not since December 1974, toward the end of a severe recession, have so many jobs disappeared in a single month — and the current recession, far from ending, appears to be just gathering steam.
“We are caught in a downward spiral in which employment, incomes and spending are collapsing together,” said Nigel Gault, chief domestic economist for IHS Global Insight. “With private spending frozen, we have no choice but to rely on a stimulus package to revive the economy.”
The unemployment rate rose to 6.7 percent, up just two-tenths of a percentage point from October, but up six-tenths over the last three months. More than 420,000 men and women who had been working or seeking work in October left the labor force in November.
More significantly, the unemployment rate does not include those too discouraged to look for work any longer or those working fewer hours than they would like. Add those people to the roster of the unemployed, and the rate hit a record 12.5 percent in November, up 1.5 percentage points since September.
Continue reading the NY Times article here.
According to the Dallas Morning News article, "Wal-Mart posts decent sales; other retailers slump," by Maria Halkia on Dec. 5, 2008:
With only 20 days left to Christmas, Wal-Mart is having a decent holiday season. But most other major retailers reported lower November sales as shoppers cherry-pick the best deals and pass on the rest.
November's 2.7 percent same-store sales decline based on the results that major U.S. chains reported Thursday, is the worst since the International Council of Shopping Centers started keeping track in 1969.
Ignore Wal-Mart Stores Inc.'s results – which prop up the total – and the other 35 or so companies averaged a 7.8 percent drop in November same-store sales, according to Thomson Reuters.
With the U.S. economy officially in a recession and layoffs accelerating, there appears to be little on the horizon to boost consumer confidence as retailers get a new lesson on how price-sensitive shoppers have become.
The recession and a weaker-than-expected November led the shopping center council to lower its holiday forecast from a 1 percent increase to a range of flat to down 1 percent in the combined November-December period. That would be the weakest holiday-sales performance on record, said Michael P. Niemira, ICSC chief economist and director of research.
Continue reading this article from the Dallas Morning News here.
Why is that so significant? Two reasons: First, just as small steps signaled the Asian entry into our now essentially bankrupt auto sector 50 years ago, so the GE acquisition signals Asia's entry into one of our few remaining dominant manufacturing sectors. Boeing is still the world's leading commercial aviation company. CACC's emergence—and its particular advantage selling to Asian markets—means that Boeing now faces the rigors of an entirely new competitive playing field and that our commercial airplane sector is likely to suffer enormously over the coming decades.
But the second implication is even bigger. The CACC story highlights the risk that current bailouts—a remarkable $7.8 trillion in equity, loans, and guarantees so far—may merely perpetuate a fundamentally flawed status quo. So far, at least, we are simply rebuilding the same edifice that just collapsed. None of the investments has even begun to address the underlying structural problems that are causing economic power to shift away from the United States, sector by sector:
- Our trade deficit has ballooned from about $100 billion to more than $700 billion annually in the past decade, and our federal deficit now approaches $1 trillion. These twin deficits leave us at the mercy of foreign-capital inflows that may diminish as Asian nations, in particular, invest increasingly at home.
- Our household savings rate has been close to zero—and even negative in some years—not permitting the long-term capital accumulation required for the investments we need; China's savings rate, by comparison, is an astonishing 30 percent of household income.
- U.S. middle class income has stagnated over the past decade, while the middle class in China—granted, starting from a lower base—has seen its income growing at about 10 percent annually.
- Our intellectual advantage could soon turn into a new "third deficit," as hundreds of thousands of engineers are being created annually in China.
- We are realizing that the service sector—all the lawyers, investment bankers, advertising agencies, and accountants—follows its clients and wealth creation. This, not over-regulation, is the reason investment-banking activity has begun to migrate overseas.
The great irony is that our new place in the global economy is a direct consequence of our grand victory over the past 60 years. We have, indeed, converted virtually the entire world into one integrated capitalist economy, and we must now bear the brunt of serious and vigorous competition. In the immediate aftermath of World War II, the United States was essentially the only nation with financial capital, intellectual capital, skilled labor, a growing middle class generating consumer demand, and a rule of law permitting safe investment. Now we are one of many nations with these critical advantages.
"What is considered green is usually for the eco-elite," he preached to the assembled solar entrepreneurs, environmental activists, and community leaders (including more than a dozen black clergymen). "But if we are actually going to meet the challenge of global warming, we are going to have to weatherize millions of homes and install millions of solar panels. That's millions of new jobs. We need to connect the people who most need the work with the work that most needs to be done." It's one of his favorite themes: the need to expand the green movement beyond "lifestyle environmentalists," with their hybrid cars and other eco-status symbols. The audience cheered. "Van Jones, he's a rock star," says Tim Rainey, director of economic development at the California Labor Federation.
But Jones is not just a performer. More than any other single figure, he has ushered the phrase "green-collar jobs" into the political lexicon -- and economic reality. Last year, Jones led a coalition of business, labor, and environmental groups that persuaded the Oakland City Council to provide $250,000 in seed money for the country's first green-collar-jobs corps, which will train low-income youth in the renewable-energy, organic-food, and green-construction industries
It says economic activity has weakened across the US in the past two months, with retail sales, and vehicle sales in particular, "down significantly".
It also reports weak service and manufacturing sector activity, and falling prices in weak housing markets.
The anecdotal report follows a series of bad US economic figures.
The book, based on information collected before 24 November, also says that consumer spending has weakened, while lending has contracted.
The labour market and tourism, it says, also slowed.
Earlier on Wednesday figures from the Institute of Supply Management showed that service sector activity in the US dropped to a record low in November.
"The data today tells you the recession is as severe as most people fear it is at this point," said Marc Pado at Cantor Fitzgerald.
Last week, the National Bureau of Economic Research confirmed that the US entered recession in December 2007.
The Beige Book is compiled eight times a year and is based on reports and comments from businesses across the US.
Hormel's Austin, Minn.-based plant that produces Spam has been running two shifts, seven days a week since July, according to Dan Bartel, a representative for the United Food and Commercial Workers International Union Local 9. The plant in Fremont, Neb., also has increased its Spam production.
"(Demand for) Spam has always been good, but it has become exceptionally good and I'm sure that has to do with hard times," Bartel says. The product's low price, long shelf life and versatility are strong assets now, he adds.
In September, Jeffrey Ettinger, Hormel's chief executive officer, reported that Spam sales were increasing by double digits.
According to Bartel, the current production is expected to continue indefinitely. Many workers are putting in 12-hour shifts, with some volunteering for even more to cash in on overtime pay. "When economic times are as they are right now, if workers can get overtime, that kind of puts a smile back on their face," Bartel says.