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This Week's Business News

Federal Spending & Revenue

The annual increase in federal spending at present is below the prevailing inflation rate.

So far this fiscal year the annual federal budget deficit is 34% lower than it was at the same point last fiscal year.

Overall the budget deficit has dropped from $412 billion in fiscal 2004 to $189 billion (annualized) at present. That's a 54% projected decline. That's despite the U.S.-led global war against terrorism. That's despite Katrina and Rita. That's despite National Guard troops deployed on the Southern border.

Although federal tax rates are much lower than they were in December 2000 federal tax receipts substantially are higher.

Flat federal spending is based upon what was done by the prior Congress. Lower federal tax rates are based upon what was done by the prior three Congresses. In addition to the business cycle the sharply-reduced federal budget deficit is based upon what was done by the prior Congress.

Employers of Illegal Immigrants

In connection with a 26-point laundry list of immigration reforms the Department of Homeland Security announced on Friday a new crackdown on employers of illegal immigrants.

Employers will be compelled to fire workers with fake Social Security numbers. Employers also will be subjected to stiffer fines. This effort will entail the operational debut of that national Tax ID verification database, about which various malcontents reflexively have been complaining.

The program will be enforced by stepped-up ICE raids at worksites. So far this calendar year there have been eight major indictments, mass arrests or group guilty pleas/convictions, in connection with worksite enforcement. There were seven major worksite operations conducted in calendar 2006, involving several thousand alien arrests, hundreds of criminal court filings, thousands of immigration court deportations, and multiple group indictments of top business executives.

For those who are curious here's a link to the complete press release.

Mr. Market

Lots of volatility on Wall Street this week, complete with short covering, short squeezes, then a total dearth of buyers and renewed shorting -- en masse.

Zzzzzz.

With any luck the Dow will fall all the way back down to 12,000 or even lower. At those levels I would be quite happy to purchase selected blue chips on the cheap.

To summarize this entry in colloquial terms:

Buy low.
Sell high.
Not vice-versa.

Cause & Effect

Forbes released its annual rankings of the best states in which to conduct business.

The top-10 business states:

1. Virginia
2. Utah
3. North Carolina
4. Texas
5. Washington
6. Idaho
7. Florida
8. Colorado
9. North Dakota
10. Minnesota

Eight of 10 voted for George W. Bush not once but twice. In fact, President Bush won 21 of the top-30 not once but twice.

Go figure.

True Gloom

Washington Post reported yet another decline in circulation, a decline in advertising revenue, a decline in newspaper revenue, a decline in publishing and broadcasting revenue, and a decline in total net income.

The Fed

The Federal Reserve believes the economy will continue to expand at a moderate pace over the next several months and that inflation is slightly less of a risk now than it was a couple of months ago.

Cue the Imperial Theme Music

Courtesy of Reuters:

A U.S. judge on Monday reversed a jury's verdict that Microsoft had infringed patents on MP3 music held by Alcatel-Lucent and threw out what had been a record $1.5 billion award of damages.

Retail Sales

Same-store sales in July at major chains grew 2.9 percent, in line with projections, but lower than the 3.7% gain posted last July. For obvious reasons the media's reporting of this item was couched in the most negative terms practicable.

America Competes Act

President Bush signed into law the America Competes Act, which is designed to help our country retain its competetive edges in key areas of science and technology.

Cause & Effect -- Part II

Delphi Corp. -- the former parts division of GM -- reached an accord with the leaders of its industrial workers' union to slash the hourly wages of rank-and-file workers by upwards of 50% and to reduce the number of those workers via early retirements and buyouts. The company also reached tentative accords involving wage cuts and workforce reductions with three other unions. Those agreements are key to the company emerging from bankruptcy.

Of course the very reasons why Delphi went into bankruptcy in the first instance are high labor costs and high "legacy costs," for which the singular cause is that of a unionized workforce. Irony can be ironic, no?

Vitamin "V"

President Bush indicated he'll veto any naked attempts by the media/Democrats to hike gasoline taxes to pay for bridge infrastructure projects.

Evil Corporate America Strikes Again

Courtesy of Reuters:

Pfizer Inc. said on Monday that U.S. regulators had approved its AIDS drug, Selzentry, the first in a new class of oral HIV medicines.

Selzentry is the first drug brought to market designed to keep the HIV virus that causes AIDS from entering healthy immune cells.

* * *
In the company's studies, about 45 percent of patients who used [the drug] and previously had tried other regimens had their HIV virus levels suppressed to undetectable amounts. The same was true for 23 percent of the study sample who received placebos.

What's your opinion about Pfizer's new AIDS drug, Michael Moore?

Judicial Restraint

Speaking of the healthcare industry, in an 8-2 decision the U.S. Court of Appeals for the District of Columbia Circuit declined to create a new federal constitutional right -- ruling instead that terminally-ill patients cannot force healthcare providers via government intervention to provide them with experimental drugs.

Company Layoffs

314,000 - 4-week avg. of initial jobless claims, August 2, 1997.
308,000 - 4-week avg. of initial jobless claims, August 4, 2007.

Yep, that's true -- fewer people today are being laid off from their jobs when compared to the same period 10 years ago. That's despite total employment today being higher by in excess of 16 million persons.

Obviously if Lou Dobbs found out about that he'd wet his pants, froth at the mouth, scream at the top of his lungs, then he'd go utterly postal. Yeah, even moreso than usual.


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Comments (8)

Sure, but did you know the ... (Below threshold)

Sure, but did you know the cost of a haircut can be up to $1200 if you have to fly the guy from LA to wherever you are campaigning?

I blame Bush.

Great, concise update Ja... (Below threshold)

Great, concise update Jayson.

I'm glad to see at least a public acknowledgement of the importance of enforcing existing immigration and labor laws. Stealing someone's Social Security Number in order to be able to work is not a victimless crime. It's just the start of using that number to secure things to which you wouldn't otherwise be entitled (mortgage, SSI, health insurance, credit cards & car loans).

Working 'on the frontlines' at a large Chicago hospital taught me just what people (almost solely Latinos) can do with SSN's, and how those who would supply false ID's will also supply false addresses, false insurance coverage, etc. I also saw how, due to political concerns, we didn't prosecute them for falsifications -- we set them up for charity care! Good luck to the honest, legal individual who needs help paying for that ultrasound to determine if their stomach cancer is back -- you'll have to pony up that $6,000 while the female Mexican National is having a $10,000 baby for free.

I thought "Vitamin V" was f... (Below threshold)
Mitchell:

I thought "Vitamin V" was for "Viagra." What is Vitamin V, then, if not the purple pill?

What's your opinio... (Below threshold)
Gizmo:
What's your opinion about Pfizer's new AIDS drug, Michael Moore?
That's easy... Moore, et al, will accuse Pfizer of "outrageous profiteering" when the drug hits the market. They will also demand that the compound be licensed for little or nothing to anyone around the world that wants to manufacture it.
5. Washington<... (Below threshold)
Peter F.:

5. Washington

We are? Huh, you wouldn't think so the way WA State and local Dems tax the bejeezus out of business, but I guess we have Billy Gates, Jeff Bezos, Howard Schultz, Boeing and Pacar to thank for employing what seems like half the state.

JaysonThanks for pro... (Below threshold)

Jayson
Thanks for providing this weekly update. It's full of relevant data and good , informed commentary.

"It's full of relevant data... (Below threshold)
Herman:

"It's full of relevant data and good , informed commentary." -- Hugh S.

Like hell it is. Superficial in it's scope, it's replete with cherry-picked dates and data designed to make Bush look good.

Bottom line:

Since Bush took office in January 2001:

The U.S. Poverty Rate is up for both people at the poverty line and at one-half the poverty line, after having declined throughout the Clinton years

The budget surplus is gone, replaced by a federal deficit that Jason concedes is close to $200 billion. And guess who winds up paying the interest on this deficit?

The number of children without medical insurance is substantially up, but hey, they're not fetuses so you Republicans don't give a damn.

Well Herman As you c... (Below threshold)

Well Herman
As you cite no sources, neither will I:

Superficial in it's scope, it's replete with cherry-picked dates and data designed to make Bush look good.

Pick your dates and cite the data.Compare it with any administration.

The U.S. Poverty Rate is up for both people at the poverty line and at one-half the poverty line, after having declined throughout the Clinton years

What is the poverty line, and how long did those individuals living at the poverty line actually stay there? When I graduated from college in the Carter years, I made a wage that put me at the poverty, but I didn't stay there very long. And most others don't either.

The budget surplus is gone, replaced by a federal deficit that Jason concedes is close to $200 billion. And guess who winds up paying the interest on this deficit?

Tell me what that budget surplus was used for. Where was that surplus money spent? And while your at it Herman, what is the real size of the surplus/deficit ( yes, Clinton ran some deficits even if he did gut defense spending) when compared with govt tax receipts in the Clinton years versus today?

The number of children without medical insurance is substantially up, but hey, they're not fetuses so you Republicans don't give a damn.

Liar, liar pants on fire. Are those children US citizens? Call Medicaid! No child will be without health care if the parent will notify their state provider.
Or are you talking about private sector funded health care?




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Section Editor: Maggie Whitton

Editors: Jay Tea, Lorie Byrd, Kim Priestap, DJ Drummond, Michael Laprarie, Baron Von Ottomatic, Shawn Mallow, Rick, Dan Karipides, Michael Avitablile, Charlie Quidnunc, Steve Schippert

Emeritus: Paul, Mary Katherine Ham, Jim Addison, Alexander K. McClure, Cassy Fiano, Bill Jempty, John Stansbury, Rob Port

In Memorium: HughS

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