The Greek Riots

If you were too busy watching The Grammy's, you might have missed the Greek riots as their government came to an agreement on austerity. This isn't the first time that Greece has rioted:

Yes, I very much like riot footage. What's interesting to me though is the Riot Police. Greece has no money. How can they afford the riot police? What kind of compensation are these guys receiving if they are against their fellow countrymen? Austerity is the issue in Greece; don't these policemen have their own thoughts on this?

Personally, I'd love to beat down some Greeks to get rid of some of the pent up aggression. I'd be a mercenary, but I'm all in for the cause if I can wail on some defenseless people standing up for what they believe in.

So what would I want in return for my professionally delivered beatings?

For starters, I'll take a chicken souvlaki plate. Giving out beatings is tough work and you've got to make sure I've got the energy to bring the pain. I'd also love it if they sweetened the deal a little bit. How about some baklava? No deal is complete without incentives. If I meet my quotas and do a superlative job, I deserve a bonus. Some Tzatziki sauce would be wonderful.

In all honesty, I don't know how Greece is holding it together. I don't know how the EU is holding it together. I expect things to fall apart. Things should fall apart. You can't keep trying to support a house with wood because the wood will rot, and the house will fall.

Greece needs to go back to the drawing board and lay the foundation for a new economy, and the EU has to decide whether they want to support Greece or not. A broken bone will not heal if you keep putting it under stress. You need to relieve the stress with rest.

There's no relief in Greece.

Frugal Families: A Sign of a Slow Economy

I keep talking about how hard times are on the business side in terms of jobs and economic growth, but it's also become tough for families to spend on essential goods. The economic slowdown has hurt household incomes through lost jobs or reduce income through inflation. The purchasing power of a household is in a very precarious place, and households have been very frugal as a result:

Buffeted by high unemployment, heavy debt loads, falling home values and high food and gas prices, these shoppers have been whipped into a permanent state of consumer caution. They buy only what they need, avoid premium labels, clip coupons and scour sales.

This has created an environment where households are trying to stretch what they have and save on what they're going to make. Furthermore, there seems to be a cyclical spending habit based on when paychecks are distributed:

Wal-Mart Stores Inc. Chief Executive Mike Duke told analysts in a recent conference call that paycheck-cycle shopping is more pronounced than ever, with shoppers stocking up shortly after getting paid, then moving to smaller product sizes toward the end of the month when they run short of money.

Companies have become more proactive in offering products that appeal to this frugal consumer:

Some are waiting longer to pass on higher costs, whether for food or cotton. Coca-Cola Co. and other companies have added new packages at small sizes and lower price tags. Some retailers are holding the line on hiring, even as they head into their busiest season of the year. Many stores are expanding their selection of cheaper private-label products and some are offering credit cards with across-the-board discounts. Layaway has made a comeback.

One of the few stores to have thrived in this time are the dollar stores:

Dollar stores sales boomed during the recession and moderated only somewhat as the economy appeared to improve. Now, renewed pressure on consumers are lifting their sales again. Dollar General Corp. raised its full-year sales guidance to between 4% and 6% from 3% to 5% when it reported second quarter earnings in late August.

It's frightening how household spending habits are shifting, but what's most frightening is what's going on with parents of newborns:

The volume of diapers sold in the U.S. slipped 1% in the four weeks ended Sept. 4 from a year earlier, extending a string of similar or steeper declines stretching back to August 2010, according to Consumer Edge Research, whose retail-sales tracking doesn't include Costco Wholesale Corp. or Wal-Mart Stores Inc. Dollar sales fell nearly 3%, indicating parents are both cutting back and trading down to cheaper private labels.

Yes, it appears that parents are cutting by on their diaper purchases. That's just nasty.

Perhaps as a result of this change in spending, we've seen an increase in diaper rash ointment:

Meantime, sales of diaper-rash ointment have increased 8% over the past year, according to market-research firm SymphonyIRI. Analysts and pediatricians say the higher sales likely reflect either less frequent changes or a shift to lower quality diapers.

I understand that diapers cost a lot of money and everyone is trying to get leaner wherever they can, but at what point is the health issue the most important thing? I think people should take the best care of themselves and their loved ones that they can so that they stay healthy and avoid burdensome medical expenses. We're moving into dangerous territory. It just speaks to how bad the economy is getting.

Part of this is on the Fed. While the Fed has insisted that inflation has not risen, oil and food prices have been high and that's been a burden on families. Additionally, we're approaching Winter, when gas prices will go up as families try to keep their houses warm. If this Winter is bad, we're going to have a lot of families in trouble. Inflation has been burdensome, and to not recognize that is ignoring a core economic measure.

In the meantime, what would help unburden these families? Lower taxes? Job growth? These families need something real to help them through these tough times. They're not getting it.

How About Better Transportation Resources?

Obama wants to improve roads and infrastructure:

Obama will tout proposals to improve roads and infrastructure during a campaign trip to Ohio, but that message was largely eclipsed by a renewed political battle over tax cuts for wealthy Americans set to expire at the end of this year.

I personally think it's a waste because I've seen a road near my house that was dug up and redone several times over the past year. Why don't we just have better alternative forms of transportation. In this day and age, there should be no excuse for not having cities with modern transportation such as a subway. Plus commuter trains would help ease access to urban jobs and reduce automobile usage. I feel strongly that we need to increase these alternative transportation resources. It's so easy to get around in Europe. Why is it so hard here?

He also wants to continue the tax cuts for people making less than $200,000, but not for people making more:

"We strongly believe that a healthy, vibrant, economically viable middle class is key to economic recovery and we strongly support the extension of tax cuts to the middle class," an administration official told reporters ahead of Obama's trip.

"But it's also true that we don't have 700 billion additional dollars to borrow to pay for tax cuts that essentially will go to millionaires," he added.

"Saving that $700 billion and applying that to the deficit is a much better use of that money."

Meanwhile, people are still struggling to get jobs. There's no job growth. How are people supposed to pay these taxes without jobs? Additionally, how is the government going to cut spending if it has to continue supporting these people. This is just a disgraceful situation.

India 1, Rest Of The World 0

While the world is suffering through this economic crisis, India continues to prosper:

India's economy grew at an annual rate of 8.6% in the three months to March, largely thanks to growth in manufacturing, official data has shown.

That marked an increase on the 6.5% growth seen in the previous quarter.

Finance Minister:

"I expect the current economic momentum to remain," Indian Finance Minister Pranab Mukherjee said after the figures were released.

At least some country I like is actually doing well.

This Just Doesn't Make Sense

More people looking for jobs, more people finding jobs? I don't know if this is good or bad.

Review: State of the Union

As I previewed earlier, today was Obama's State of the Union speech. In the speech, which lasted well over an hour, Obama discussed a wide range of topics, from healthcare, the economy, gay rights, a high speed rail, the supreme court and national security. What I want to do is see reactions over the different issues.

First off, Here's the Republican response:

Health Care
Obama called for the senate to resolve the healthcare bill:

“This is a complex issue, and the longer it was debated, the more skeptical people became,” he said. “I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, this process left most Americans wondering what’s in it for them.”

It doesn't appear like he's getting a favorable response.

Sen. Mary Landrieu (D-La.) said that, after watching the speech, health reform appeared unlikely to pass as one comprehensive package.

"I think right now it's less than 50-50," she said of a consolidated bill passing. "It's very hard to see a path forward in the current arrangement."

The healthcare bill has been much maligned. I personally felt that the senate was pushing it when there were other issues that were more prevalent such as the economy. I've heard criticisms from both sides and statistics and what not, but I have absolutely no idea what the bill entails. If the senate wants public support, it's important that the public know clearly how they will be affected by it. John McCain criticized the Obama administration for promising transparency, but not delivering. The healthcare issue is exhibit A.

Economy
Obama has called for a new jobs bill:


Gay Rights

John McCain's response:

“In his State of the Union address, President Obama asked Congress to repeal the ‘Don’t Ask, Don’t Tell’ policy. I am immensely proud of, and thankful for, every American who wears the uniform of our country, especially at a time of war, and I believe it would be a mistake to repeal the policy.

“This successful policy has been in effect for over fifteen years, and it is well understood and predominantly supported by our military at all levels. We have the best trained, best equipped, and most professional force in the history of our country, and the men and women in uniform are performing heroically in two wars. At a time when our Armed Forces are fighting and sacrificing on the battlefield, now is not the time to abandon the policy.”

High Speed Rail
Here is the plan that will arise from the speech:

President Obama will kick off his post-State of the Union tour with what aides describe as a major economic announcement -- $8 billion to begin building a high-speed rail infrastructure in multiple states.

The money is a "downpayment" on the rail system, officials said, and will go to local governments for distribution. A total of 13 major areas will benefit from the project, whose reach will be felt in 31 states, the administration said.

Supreme Court
President Obama criticized the Supreme Court:

"With all due deference to separation of powers, last week the Supreme Court reversed a century of law that, I believe, will open the floodgates for special interests, including foreign corporations, to spend without limit in our elections."

Justice Alito was not very pleased:

"Not true, not true," he appeared to say, as he shook his head and furrowed his brow.

Conservative legal groups aren't happy either:

"The President's swipe at the Supreme Court was a breach of decorum, and represents the worst of Washington politics -- scapegoating 'special interest' bogeymen for all that ails Washington in attempt to silence the diverse range of speakers in our democracy," said Bradley A. Smith, a former FEC member and chairman of the Center for Competitive Politics.

Citizens United had this to say:

"President Obama's remarks tonight reflect a woeful disregard for the fundamental First Amendment rights of American citizens," said Citizens United President David N. Bossie.

But he added: "That being said, I absolutely support President Obama in his call for a ban on spending in American elections by foreign corporations. While I unreservedly support the rights of every American citizen to have their voice heard, there is no place for foreign actors in our political process."

It will be interesting to see how the Supreme Court ruling will be challenged in the future.

National Security
Here's a taste of the reaction for National Security:

David Rothkopf, a former Clinton administration official and foreign policy expert, said Wednesday night that he “can’t recall a state of the union that devoted less time or attention to foreign policy issues than this one.”

Preview: Obama's State of the Union

Pushing the healthcare agenda:

“By the time I’m finished speaking tonight, more Americans will have lost their health insurance,” the excerpts say. “Millions will lose it this year. Our deficit will grow. Premiums will go up. Co-pays will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether.”

But, he adds: “I will not walk away from these Americans. And neither should the people in this chamber.”

A large reason people are losing healthcare is because they are losing their jobs. If we improve the unemployment rate and create more jobs, I have no doubt that less people will be without healthcare. Dire times lead to dire measures. Cutting healthcare is one of those methods. I hope Obama focuses heavily on improving the economy and more so takes action to improve it. He's a great speaker, but he needs to be a great president.

The Solution?

Gas prices are high. And they continue to rise. In my home state of Massachusetts, gas prices have increased substantially:

AAA’s Jan. 4 survey of prices in Massachusetts found self-serve, regular averaging $2.62 per gallon, up three cents from last week. The price is four cents below the national average for self-serve, regular. A year ago at this time the Massachusetts average price was $1.62, a dollar lower than today’s average.

You think three cents in a week in Massachusetts is bad, just look South. In Jacksonville, gas prices rose five cents:

Jacksonville gas prices rose 5 cents over the past week as severe temperatures throughout the country increased demand for crude oil to produce heating oil.

The average price of a gallon of regular gas is $2.65 in metro Jacksonville, $2.68 in Florida and $2.66 nationally, according to AAA Auto Club South.

The increase in the price at the pump is reflective of the price of a barrel of oil. Oil prices continue to progress to highs and the seasonal conditions have not helped either:

Crude oil climbed above $81 a barrel for the first time in two months as freezing weather and improving economic prospects around the world bolstered the outlook for fuel demand.

At the same time, supply is falling:

U.S. heating oil stockpiles have fallen for six weeks to 44.4 million barrels, the longest decline since April 2008, an Energy Department report showed Dec. 30. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 2 million barrels last week, according to the median of seven responses in a Bloomberg News survey.

It is only natural that prices would increase from the resulting changes in the market. When economic pressures are present, it leads to new innovation or alternatives to relieve the stress. It's why economics are so central to the way our world works. With oil prices rising, we need a new innovation or an alternative to arise.

So is Oil Shale the solution? What is oil shale you might ask. Oil shale is a source rock that hasn't yet released the oil. We can obtain this oil through processing. Seems simple enough. However, complex engineering and economics have gotten in the way in the development of the industry. But with oil prices as high as they are, it is now feasible to explore ways to produce oil from shale.

Total SA, Europe's third largest oil company, seems to think so:

Total SA, Europe’s third-largest oil company, accelerated its expansion in unconventional energy by agreeing to buy a stake in Chesapeake Energy Corp.’s assets in the biggest U.S. natural-gas field for as much as $2.25 billion.

Here's some information on the Barnet Shale:

The Barnett Shale is the most productive U.S. gas field and accounted for 52 percent of Chesapeake’s third-quarter output. It was the first geological formation where improved technology enabled producers to bore sideways through thousands of feet of rock and fracture it with a mixture of water, sand and chemicals to make gas flow.

So it appears that companies are investing money into the resource. We'll see if it ends up paying dividends. We have only so many resources, and economics dictate whether we can produce something that is of use. Hopefully, oil shale will be a new economically viable resource.

Donavon's Choke and Michigan's Unemployment

Landon Donavon is supposed to lead the US National Team next year in the World Cup. However, he was unable to lead LA Galaxy to triumph in the MLS Cup. He had a great opportunity as he took the fourth penalty which would have put LA on top after their keeper had made a tremendous effort to keep them in it. However, he shanked the kick, pushing it over the net.

He's not the first captain to miss a pivotal kick, but it got me thinking about what we should expect for next year's World Cup. With Charlie Davies out and Oguchi Onyewu looking like he has a 50-50 chance of being available, how will the US do? I can't really say. It depends on the group. We saw that them overcome a heavily favorited Spanish side in the Confederations Cup, but we also saw them blow a 2-0 lead. Can the US outwork their way through the group stage and into the knockout round? Who will step up for them now that Davies is out? I don't know if this one play can make us question Donavon's leadership and reliability, but he's going to have to perform on the pitch. He will be the most talented US player on the squad no matter what.

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In other news, I found out today that Michigan's unemployment rate has increased above 15 percent. I always love reading about unemployment numbers. It fascinates me that a place that was once such a catalyst for American industry is struggling so much with the economy. I wonder how Michigan can stop the bleeding of jobs. I think we're already seeing the effect of the poor economy as I'm seeing more people pleading for change and more robberies around campus. I'd like to see how the unemployment rate breaks down as well. Ann Arbor seems alright.

I also found it interesting that Massachusetts, my home state, decreased its unemployment rate. What is Massachusetts doing right that other states are failing at? It wouldn't hurt to find out. States like Massachusetts can provide a model for the others to right their economies. Until then states like Michigan might struggle with nearly 1 in 6 persons in the job market jobless.