Treasury Secretary Timothy Geithner is asking Congress to grant him new powers that would allow him to regulate huge companies such as AIG. During a House committee hearing, Geithner said the government must ensure that the country never has to slog through such a massive bailout again. He’s asking for powers similar to those of the Federal Deposit Insurance Corporation, which has authority to seize control of banks, take over their bad assets and sell good ones to competitors. Fed Chairman Ben Bernanke, who joined Geithner in the hearing, says the AIG bailout highlights the need to safely wind down financial giants on the verge of collapse and subject them to stronger regulatory oversight. He says AIG’s failure could have been catastrophic and could have “resulted in a 1930s-style global financial and economic meltdown.” The government has bailed out AIG four times, spending more than $180 billion altogether.
President Barack Obama’s top spokesman says the administration ultimately will be judged on whether it can restore sustained economic growth, not on the daily gyrations of Wall Street. Speaking in advance of tonight’s presidential news conference, Press Secretary Robert Gibbs said the American people genuinely are worried about their jobs and the administration doesn’t spend a lot of time “worrying about what happens each day in the market.” Gibbs did say on CBS’s The Early Show that officials were heartened by the Wall Street rally Monday in the wake of the announcement of a plan to buy out the bad assets that banks continue to hold. He said he thinks the public is more focused on a long-term economic recovery.
The Houston Chronicle announced that it’s begun laying off about 12 per cent of its work force in a cost-cutting move. In a story posted on the newspaper’s Web site, Publisher and President Jack Sweeney blames the cuts on changes in the newspaper industry. Sweeney noted that companies in all industries are being forced to cut jobs and slash expenses. “The Houston Chronicle must do the same in spite of our diligent efforts,” he said in a message to Chronicle employees. Sweeney did not specify how many jobs are to be cut or what departments they serve. Laid off workers will receive two weeks pay for each year of service, up to one year’s pay. They also will be offered career transition services.
KV Pharmaceutical plans job cuts nationwide, including at its location in The Woodlands, according to the Houston Business Journal. The St. Louis-based firm is cutting some 1,700 jobs nationwide, and tells the Texas Workforce Commission that those being laid off in this area include sales employees whose duties involved work carried out outside of the companies’ employment site. Twenty-one other Texas positions in Frisco, Ovilla and Coppell have also been eliminated.
A government report says home prices fell 6.3 per cent in January from the same month last year. The Federal Housing Finance Agency says prices, on a seasonally adjusted basis, rose 1.7 per cent from December to January. Changes in the geographic mix of sales explained the unexpected monthly increase. Home sales included in January’s data were weighted toward areas that haven’t borne as much of the brunt of the housing recession, the agency says. The government index is calculated using mortgage loans bought or guaranteed by federally controlled mortgage-finance companies Fannie Mae and Freddie Mac. It’s down 9.6 per cent from its peak in April 2007.
An airline industry group says the global recession is going to hit the world’s airlines with their biggest losses since 9/11. The International Air Transport Association says the overall state of the industry is “grim.” Fewer people are flying and the group says demand is shrinking “much more rapidly” than could have been anticipated even a few months ago. The association says airlines are looking at a total of $4.7 billion in losses this year. That’s nearly double the previous forecast issued in December. But the outlook for North American airlines is considerably better, where carriers are expected to turn a combined profit of $100 million. That’s because airlines are matching the drop-off in passengers by cutting flights. Lower fuel prices are also helping the North American picture.
A key Senate committee has approved spending almost $11 billion in federal stimulus funds in the next state budget. Still a long way from becoming law, using the federal money would enable lawmakers to close a multibillion dollar gap between the amount of state revenue available and spending needs for the 2010-2011 budget period. The largest chunks of the money will be spent on education and health care. But federal stimulus money also is slated to help pay for meals for the elderly, energy conservation and school lunch equipment. Lieutenant Governor David Dewhurst, a Republican, touted a job re-training program in the plan that would use $400 million of the stimulus money, including almost $200 million in child care and development grants. The budget-writing Senate Finance Committee is expected to vote on the full, two-year budget next week. Dewhurst, who has criticized the stimulus law for creating too much national debt, says the full senate will take up the budget early next month. Republican Senator Steve Ogden, chairman of the committee, says that with approval of the stimulus spending, they’ve got a bill that will balance and doesn’t require them to use the Rainy Day Fund to pass it.
People who got digital TV converter box coupons but let them expire can now apply for new ones. The recent stimulus package put more money into the coupon program, letting the National Telecommunications and Information Administration give households with expired coupons a second chance. Each household can apply for two $40 coupons that cover most of the cost of converter boxes. While 26 million coupons have been redeemed, 17 million expired at the end of their three-month life span. The government also has cleared the wait list that built up after funding for the coupons dried up in January. That problem led Congress to delay the shutdown of analog TV broadcasts by four months, to June 12th. After then, older TVs that aren’t hooked up to cable or satellite feeds will need converter boxes.
The Texas insurance industry lost nearly $1.4 billion in 2008 as the state was hammered by three hurricanes as well as several other major weather events. According to figures released by the Texas Department of Insurance, for every dollar the state’s insurance industry took in, it paid out $1.65. The 2008 hurricane season was a devastating one for many parts of Texas as three major storms made landfall. Dolly hit near the Texas-Mexico border in July; Gustav slammed the Texas-Louisiana line on Labor Day; and Ike, the most destructive of the three storms, barreled ashore near Galveston on September 13th, wreaking havoc throughout southeast Texas. State officials estimate damages from last year’s hurricane season to be more than $29 billion.
American workers are getting squeezed like no other group by private health insurance premiums that are rising much faster than their wages. A new study says just about all retirees are covered, and nearly 90 per cent of children have health insurance. But workers now are at significantly higher risk of being uninsured than in the 1990s, the last time lawmakers attempted a health care overhaul. The study for the Robert Wood Johnson Foundation found that nearly one in five workers is uninsured, a significant increase from fewer than one in seven during the mid-1990s. The problem is cost. Total premiums for employer plans have risen six to eight times faster than wages, depending on whether individual or family coverage is picked, the study found. About 20.7 million workers were uninsured in the mid-1990s. A decade later, it was 26.9 million, an increase of about six million, the study found. In the 1990s, there were eight states with 20 per cent or more of the working age population uninsured. Now there are 14: Alaska, Arizona, Arkansas, California, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina and Texas.
A new report from Families USA reveals that more than two out of five Texans under 65 years old—43.9 per cent—were uninsured for some period of time in 2007-2008. The report is based on data from the Census Bureau and the Agency for Healthcare Research and Quality.
The nation’s fastest growing labor union is getting bigger. About 150,000 breakaway members of the Unite Here trade union have formed a new organization and say they will affiliate with the Service Employees International Union. The addition of textile, restaurant and hotel employees will push SEIU’s membership to nearly 2.2 million workers. Unite here was formed when two unions merged five years ago. But a culture clash produced months of infighting that divided its 400,000 members. The dissident workers are calling their new union Workers United.
Unions representing oil workers in Nigeria say they have called off a planned strike to protest the lack of security in the country’s southern oil-producing region. Peter Akpatason, president of one of the unions, says the government informed union leaders of planned measures to improve safety in the restive Niger delta. He gave no details of the proposed measures but said the strike had been suspended. Nigerian workers have been targeted for kidnappings and other attacks alongside their expatriate colleagues during several years of rising violence in the southern oil region. Strikes by Nigeria’s oil-worker unions have in the past curtailed output from Africa’s biggest crude producer.
Iraq’s oil ministry has invited three international oil companies to bid on developing a prized oil field in southern Iraq. A senior ministry official says invitations were sent to Total, Chevron and StatoilHydro to develop Nahr Bin Umar field in Basra. The official says the contract will be for engineering, procurement and construction services. Proposals are expected next month. The official spoke on condition of anonymity as he was not authorized to speak to media. The field has about 6.6 billion barrels of reserves and a potential production of 440,000 barrels per day. Iraq sits on the world’s third-largest oil reserves of about 115 billion barrels.
For Steve Smith, the 20-year anniversary of the nation’s worst oil spill is like a reminder that he lost a loved one. The 70-year-old Alaska fisherman says the Exxon Valdez disaster is “like a death in the family. With time it gets a little better, but the pain never really goes away.” Smith is one of scores of residents of the fishing town of Cordova and other communities whose lives were forever changed on March 24th, 1989. That’s when the tanker Exxon Valdez ran aground at Alaska’s Bligh Reef, spewing 11 million gallons of crude into the rich fishing waters of Prince William Sound. An anchorage jury awarded victims $5 billion in punitive damages in 1994, but that amount was cut in half by other courts on appeals by Exxon. Then last June, the U.S. Supreme Court decided to cut the punitive damages to $507.5 million. That translates to an average of $15,000 per victim. Scores of plaintiffs are still waiting to be paid their share and still unresolved is whether Irving-based Exxon Mobil should have to pay interest. That would add an estimated $488 million if calculated since 1994.