Light Bulb Labyrinthine

Light Bulb Ban Set to Take Effect
December 13, 2013
By Steve Hargreaves
CNNMoney


Light Bulb Labyrinthine

"Light bulb manufacturers will cease making traditional 40 and 60-watt light bulbs-the most popular in the country-at the start of 2014."

In the place of these light bulbs halogen light bulbs, compact, fluorescent bulbs, LED bulbs, and high efficiency incandescents which are all regular incandescents with filament wrapped in gas. Although all of these lightbulbs offer more savings in the long run and offer significantly more energy, these new lightbulbs are more expensive than the traditional light bulbs. 

This change is predicted to anger consumers already faced with economic problems. Also, this is said to irritate the tea party activists sine the ban is the result of the final phase of government-mandated efficiency standards.

The rules were signed into law by President George W. Bush in 2007. "They are designed to address gross inefficiencies with old light bulbs -- only 10% of the energy they use is converted into light, according to the Environmental Protection Agency, which has a handy fact sheet about the changes." 

Much arousal has raised from the libertarians and conservatives who disapprove of the government telling people what light bulbs they can and cannot use. These people argue that if the new ones really work so well, people will buy them on their own without being forced to do so. 

Although the Republicans tried to overturn the law, they failed. Congress prevented the Department of Energy from spending money to enforce the new rules. 

However, old lightbulb makers have no plans of making their old bulbs after the start of the new year and plan to abide by the new laws. 

"We haven't seen any problems with respect to compliance," said Kyle Pitsor, vice president for government relations at the National Electrical Manufacturers Association, which represents 95% of all light bulb makers in the United States.

The manufacturers association are in favor of the new rules on light bulbs, arguing that they headed off a patchwork of pending state laws that would have made the business highly complicated. 

While people were initially concerned with these new light bulb bans, Pitsor said most of the concerns faded away as people become more familiar with the new light bulbs and realize they can still buy high efficiency incandescents.  

The high efficiency incandescents cost about $1.50 each, compared to 50 cents or so for the old bulbs. But they last twice as long, and use 28% less power.

With LEDs, the saving are even greater. While a 40-watt LED goes for about $7.50 -- a big drop from the $50 or so it cost just a few years back -- it uses 85% less energy than a traditional bulb. 

Over the course of the year, a LED will consume about $2 in power under normal circumstances, said Mark Voykovik, national light bulb merchant for Home Depot. That compares to over $7 for an incandescent. 

"In two years, you pay off that bulb," said Voykovik. And because LED bulbs are expected to last at least 20 years -- it's all savings for the next 18 years. 

Moreover, LEDs are free from many of the issues that plagued compact fluorescent bulbs. They turn on instantly, do not contain mercury and give off a warm light similar to an incandescent.

Bewildering Benefits ?

"White house: Extend Jobless Benefits"

December 5, 2013

By Jennifer Liberto

CNN

"Bewildering Benefits"

Currently, President Obama is obsessed with trying to convince Congress to extend federal unemployment benefits by another year, and Republicans claim that they are willing to consider. "Benefits for 1.3 million workers will expire December 28 if Congress fails to extend a recession-era program by the end of this month." A report was issued by the White House Council of Economic Advisers and Department of Labor, touting how jobless benefits "buoy the economy" while simultaneously keeping 2.5 million workers poverty-less each and every year. 

Thousands upon thousands would be affected by this decision, as many families would be harmed due to the millions of workers and their families that are unemployed. President Obama started using his bully pulpit this week to put more pressure on Congress to extend the program. "Christmas-time is no time for Congress to tell more than 1 million of these Americans that they have lost this unemployment insurance," Obama said in a speech on Wednesday. "(That's) what will happen if Congress does not act before they leave on their holiday vacation." 

The White House says that if these benefits do expire, the United States Gross Domestic Product could fall next year by 0.2 to 0.4 of a percentage point, according to the Congressional Budget Office and a J.P. Morgan Chase economist. This report also implies that the economy, currently, is not strong enough to end benefits. However, Republicans have been open to the idea of extending benefits, saying in memos that the program has already cost 252 billion dollars through July. But, the House Speaker, John Boehner, suggested he was open to an extension of the new idea and stated, "If the President has a plan for extending unemployment, I'll take a look at it." 

President George W. Bush first signed the program into law in June 2008, when the unemployment rate was 5.6% and the average duration of jobless insurance was 17.1 weeks. Since then, the unemployment rate has risen more than ten percent (2009) and the government extended the federal benefits to jobless Americans whose state unemployment insurance had run out. Currently, the unemployment rate is at 7.3 percent and the average duration of the benefits is 36.1 weeks. The Federal unemployment insurance benefits are tangible only after a person's state benefits run out. The range of the amount of time that that takes is between 14 and 47 weeks, depending on the state the person lives in.Only residents in Nevada and Illinois have access to the maximum 47 weeks, according to the National Employment Law Project, an advocacy group. Most states have cut back unemployment benefits, as the improved “As lawmakers prepare to head home to be with their families during the holiday recess, they must not turn their backs on millions of families struggling with long-term unemployment and a weak labor market," said Christine Owens, executive director of the National Employment Law Project in a statement.

The Economy's Negative Weakening Status

GDP Report: The Economy Not as Strong as it Appears

November 7, 2013

Cnn.com

By Annalyn Kurts

The Economy's Negative Weakening Status 

Although it appeared as though the U.S. economy perked up a bit this summer, as stores re-stocked their shelves, consumer spending rose slightkly, and the housing recovery chugged along.Gross domestic product -- the broadest measure of economic activity -- rose at a 2.8% annual rate in the third quarter, according to the Bureau of Economic Analysis. That marked the fastest growth in a year and was stronger than economists had anticipated. However, the gross domestic product report can be deceiving.

"In reality, it's a weaker report than it looks on the surface," said Adolfo Laurenti, deputy chief economist for Mesirow Financial. An added .8 percentage points to gross domestic product was in itself a surprise. When inventories, like these,  build up, it can mean two very different things: 1. Businesses have a valid reason to expect the demand for products to increase, in the future, so they stock their shelves in advance, or 2. The demand is weaker than they expected,  and the goods already ordered tend to linger on shelves. 

Laurennti believes it is a latter case. Growth is slowing into the end of the year as people range and complain about the absurd amount of money they spend on groceries and holiday gifts."When we see recent reports by retailers that sales are not as strong as we were expecting for back-to-school and sales for Halloween are a little bit softer than we were expecting, I have reason to believe the accumulation in inventories is mostly unexpected and not good news," he said. "Unless of course, people expect gangbuster sales for Christmas, which quite frankly, I don't think is in the data either."

Uncertainties about economic growth and government policy are holding them back from investing, said Sung Won Sohn, economist at California State University Channel Islands.

"Until the latest report, businesses had been trying to boost productivity by using the latest technology saving labor," he said in a research note. "Unfortunately, they seem to be losing confidence in the future course of the economy putting equipment purchases on hold." 

However, a few good things came out of spending on housing and commercial real estate. Federal budget cuts have been holding back economic growth for four quarter. Nevertheless, over this past summer, the state and local governments have increased their spending and investments enough to compensate for federal cuts. It is unclear whether that will continue. This report does not yet reflect the government shutdown in October, which put thousands of federal workers temporarily out of a job and halted some government work for 16 days.

The Truth of Food Stamps

“The Grim Economics of Food Stamps”

LA Times

By the Times editorial Board

November 3, 2013

The Truth of Food Stamps

On November 1, the federal government rolled back food stamp benefits for 47.6 million people who receive them, which was the official end to one of the last stimulus efforts from President Obama’s first months in office. In turn, this has created conflict among people who are poor because they do not have enough money to eat, therefore they are not getting enough to eat because of this. This action has negatively affected thousands of people all over the United States. This insensitive action was not done at the right time considering the disarray and unavailability of job opportunities and fair pay. This cut in food stamps is not a good economic policy.

Over the next ten month, this 5.5% reduction will pull approximately five billion dollars in federal spending out of the economy. This money was borrowed, so the government is taking one step closer to economic sustainability. However, the federal government will not make it all the way to economic sustainability by failing to adhere to put food on the table for poor Americans.

In April of 2009, Congress increased the maximum food stamp benefit by 13.6% as part of the American Recovery and Reinvestment Act, a $787-billion effort to stimulate the economy. This was meant to pay for the cost-of-living, in advance, that the program was expected to receive over the next five years. An estimate states that for every one-dollar in food stamps leads to $1.70 in economic activity.

But the lawmakers soon withdrew some of the budget for the higher food stamp benefits, using it to help pay for Medicaid benefits, teacher salaries, and a childhood nutrition program. The benefits were cut across the board on November 1. The maximum monthly benefit will shrink by thirty-six dollars for a family of four, to $632. For the average recipient, the aid will drop to $1.40 per meal.

Even with the enormous lowered benefits, the price for food stamps is still costing close to 80 billion dollars a year. This is because of the deep-seated, complex recession that required the food stamp rolls to expand, along with the increased unemployment rate. The new farm bill that lawmakers are negotiating will almost certainly shrink that number because both chambers want to amend fewer people eligible for the benefits.  

The percentage of people on food stamps is significantly higher than originally anticipated. The government must realize that pulling federal dollars out of the economy has consequences too and that their money must be equally balanced. The best way to cut the amount of money spent on food stamps is not to lower the benefits, but, instead, offer more jobs for people to ultimately get them off of food stamps, entirely. The government needs to make the job-less, “jobbed.” American is in desperate need of work now more than ever and the government’s original intention for their actions will not be fulfilled unless they offer more jobs to Americans.

Sluggishness Certainly Stays

America's Jobs Report: Still Sluggish

The Economist

October 22, 2013

By G.I.

Last fall, the Federal Reserve began open-ended bond buying with newly printed money in hop to generate growth in the larbour market. This seemed to have been successful, until last fall. Data suggests that recently, there is no explanation for the amount of non-farm payroll employment. Non-farm payroll employment rose 148,00 in September from August, which was much less than expected. This was the second weak reading in a row, and vindicates the Fed's decision not to dial back its $85 billion. 

The revisions to prior payrolls were upsetting to the public. A large amount of September's gains were in state and local employment. Normally, this data would be positive, however, recently this has been such a powerful headwind for the economy and has had negative affects. A decrease in private job creation has also decreased the pickup in government hiring. The monthly average of private job creation is 129,000 in the last three months from 232,000 last December. 

One positive to this situation is the decline in the unemployment rate to 7.2%, a tiny decrease from 7.3%, a near-five year low. Lower participation, which means fewer unemployed, are recorded as looking for work, rather than higher employment.The "non-employment" rate, which is simply everyone not working as a share of the civilian, non-institutional population, has remained at 41.4%.This is not primarily due to a weak economy; the number of people not in the labour force who want a job has actually fallen 9% since December, to 6.2m. The people who are leaving the labour force do not want to work. 

The reason that the labour market has dropped is very unclear. Other, less comprehensive information is more upbeat: unemployment insurance claims through September had decreased. Surveys of hiring were also positive, even though they took a plunge during the government shutdown. The overall rise in mortgage rates since the Spring has caused housing to decrease dramatically. However, construction employment rose 20,000 in September. 

Before today's report, the Fed was not willing to decrease bond purchases ($85 billion a month.) Even though officials appear maleable, officials' outlook, they claim, is for improvement. However, the follow-through is hard to determine before it actually occurs, in December. The government shutdown reduced employment overall for October. Also, an index compiled by Gallup suggests private job creation also slowed that month.  

Fed officials have often been unable to explain the criteria for beginning and ending QE, but one thing is clear: they had hoped the labour market would be gaining, not losing, steam by now. Concluding, the exit seems no clearer than when this round of QE started a year ago. 

Starbucks' Snark

Author: James O’Toole

Date: October 11, 2013

Title: “Starbucks Releases Petition Calling for End to Debt Ceiling, Shutdown Fights-Oct. 10, 2013”

CNN.com

Starbucks’ Snark?

Last Thursday, Starbucks called for leaders in Washington to resolve the ongoing financial crisis. The Starbucks company came to the conclusion to offer a petition on the subject to customers at its thousands of locations in the United States. Howard Schultz, CEO of Starbucks, announced on the Starbucks website (SBUX, Fortune 500) that Americans “have no platform with which to voice their frustration with Washington and the current stalemate that threatens our nation.” The petition, instead, requests the lawmakers to “reopen” their government to “serve the

people,” and for Americans to “pay our debts on time to avoid another financial crisis” and “pass a bipartisan and comprehensive long-term budget deal by the end of the year.” "Our leaders need to lead, and we need a better solution in Washington, D.C.," Schultz said in a video posted on the Starbucks website. Throughout the past week, Schultz has called in his chief executives to discuss the showdown in Washington. "I don't pretend that both parties are equally to blame for this crisis," he said. "But, I do think they are equally responsible for leading us to a solution." A meeting at the White House followed Starbucks’ call where Wall Street CEOs were warned of serious, weighty, economic consequences if the shutdown and debt limit issues are not resolved.  Although the government shut down seems as though it does not have an effect as much on things that are not government run, that preconception is in fact wrong.  Starbucks, a corporate company, will be influenced greatly by the government shut down if plans do not get resolved within the near future. “The U.S. Chamber of Commerce, an influential business lobbying group, called legislation to fund the government and raise the debt ceiling "must-pass." In the past, Schultz has successfully provided a positive outlook in traumatic situations. For instance, in 2011, as lawmakers underwent a “fiscal cliff,” Schultz asked his employees in the D.C. area (approximately 120 stores) to write “Come Together” on Starbucks coffee cups when serving them. Throughout the constant interception between the Democrats and Republicans amongst this tough time, it seems as though nobody can really agree upon anything. But, if everyone agreed on what should be done, everyone would be in one political party; democracy would not exist. America would be ruled under one political party with one view on everything. When one party rules every aspect of the government, that is not what a democracy is. Someone needs to pose an opposition and both parties need to be held accountable for getting this country into deep debt, not a single political party. Everyone needs to take responsibility for their actions in this country and need to come to the conclusion with themselves that everyone has contributed to where this country has gotten, not just a single person or a small group of people.