Will Superstorm Sandy have Super Costs?

Not even the “Perfect Storm” of 1991 had this high of a price tag: Hurricane Sandy is now estimated to cost upwards of $20 billion. This is a huge jump up from predictions on October 26th that the estimated cost was $1 billion in damages. This storm now rivals storms like Hurricane Irene which caused $15 billion in damage and it is having a significant effect on our lives in two areas. The first is paying at the pump. Many Americans had prepared for the storm by stocking up on gas and taking advantage of the relatively low prices; the cost of a gallon decreased by 12 cents last week, more than at any one time in the previous 4 years. However, as of Friday, October 26th gas prices have seen a rise in price as refineries and companies anticipated the infrastructural and financial sting of the storm. Just after the end of the storm, gas prices are still rising. In New Jersey, 6 major refineries were hard hit and this has likely contributed to the increase. Additionally, about 6.5 million Americans living in the Northeast have been hit with downed electric lines and power outages, forcing communities to battle the weather without heat. This is a high price to pay for both companies and consumers in very complicated situation.

Certainly, more time is needed to assess the total cost of the various damages caused by Hurricane Sandy. As utility companies repair damages and communities in the Northeast share their stories, perhaps we can add up the costs- tangible and not- of the Frankenstorm.

Posted by: Sophia Higgins

Sources: Reuters, Christian Science Monitor, Bloomberg BusinessWeek, Time

Photo credit: NASA sees Hurricane Sandy @ photostream by Flickr user NASA Goddard Photo and Video

Invitation: Waging War on Corruption Book Discussion

The Program on America and the Global Economy (PAGE)

Presents a Book Launch:

Waging War on Corruption

Inside the Movement Fighting the Abuse on Power

 

Featuring:  Author and Transparency International co-founder, Frank Vogl 

Comments by: Paulo Sotero, Director, Brazil Institute

Moderated by: Kent Hughes, Director, Program on America and the Global Economy

Monday, October 29, 2012   1:30-3:00 p.m.

6th Floor Board Room, Woodrow Wilson Center

RSVP (acceptances only) to page@wilsoncenter.org

Key topics from the book for this discussion:

·      Corruption and Justice

·      Western Security: Global Corruption (US relations with corrupt regimes; anti-money laundering; extractive industries and security; foreign aid; defense industry procurement).

Frank Vogl: former journalist (Reuters & The Times of London); former World Bank chief spokesman and Director of Information & Public Affairs; President of Vogl Communications, Inc (a strategic international economics policy and finance communications company); co-founder and former Vice Chairman of Transparency International; co-founder and current Vice Chairman of the Partnership for Transparency Fund; International Council member of the New Israel Fund; former Trustee of the Committee for Economic Development; former member of the Board of Directors of the Ethics Resource Center.

“Waging War on Corruption – Inside the Movement Fighting the Abuse of Power “ is about power. It is an insider’s account of extraordinary battles against the abuse of public office by politicians and officials for their personal gain. This is a global journey from the birth of pioneering anti-corruption organization Transparency International in 1993, to the Arab Spring in 2011, as courageous people in scores of countries challenge authority and fight for justice. At stake is nothing less than our global security, the reduction of poverty, the stability of our economic and financial systems, and the cause of freedom and democracy. Praise for the book, reviews, articles and interviews can be found at www.frankvogl.com

The Woodrow Wilson Center is located in the Ronald Reagan Building at 1300 Pennsylvania Avenue, N.W. (Federal Triangle Metro stop on the Blue/Orange Line).For a map and directions see: http://www.wilsoncenter.org/directions

Please bring a photo ID and arrive 15 minutes ahead to allow time for the security checkpoint.

NASCAR: Helping STEM Education Race Forward

One surprising (or not so surprising, it turns out) partner in the effort to promote STEM education in our nation is NASCAR. The famous National Association for Stock Car Auto Racing is bringing students from across the country to its speedway in Daytona to compete in mini-races of their own. Students have the opportunity to design and build their own cars for the grand prix competition while learning about engineering, math, and science. The goal of these initiatives is to get American youth to connect on a personal and academic level to STEM education through having fun and seeing how these skills apply in real life.

Having students pursue studies in STEM is not only a benefit for the individual but also for America: as seen in PAGE’s past report on the need for skilled labor in our manufacturing sector, skills in science, technology, engineering, and math represent an important investment in keeping our workforce competitive and relevant in the global labor market. Says Christine DeMichael, NASCAR senior manager of consumer marketing, “We are really focused on where our next engineers and team members will come from. Hands-on programs like this tie the science to something they can actually touch and feel and be a part of.” Likewise, NASCAR managing director of research and development Mike Fisher confirms “STEM education programs are critical to the future of our country and tie very well back into our sport.”

“Ten80 Education Student Racing Challenge: NASCAR STEM Initiative” is one such program, bringing over 100 students from six high schools and middle schools in the Concord, North Carolina area together to learn, test their skills, and have fun in an innovative way. Not only do many participants attribute their interest in math and science to the Student Racing Challenge, but they can also see the exciting career options where these skills are desired. Certainly, NASCAR and other American companies may be reaping the rewards of this investment in the future!

Posted by: Sophia Higgins

Sources: NASCAR, STEM Connector

Photo credit: Solar Sprint 2010 @ Argonne National Laboratory’s photostream courtesy of Flickr user Argonne National Laboratory

U.S. Debt Now Over 100% of GDP – Corporate Leaders Weigh In

With the U.S. government continuing its deficit spending this year, estimated at $1.1 trillion by the Congressional Budget Office, the U.S. debt inches closer to the $16.4 trillion debt ceiling agreed on by Congress in July 2011. According to recent data released by the Treasury Department, the government surprisingly ran a surplus of $75 billion in September. Despite September’s anomaly, the federal debt ceiling is projected to be reached by January 2013.

Last Monday corporate leaders of some of the biggest companies in the U.S., members of a campaign called “Fix the Debt”, urged Congress to come up with plans to alleviate the nation’s growing debt problem. The solution: Increase taxes for the wealthy and cut federal benefit programs such as Medicare and Social Security. The proposed measures go directly against what either party desires. Democrats look to maintain spending on social programs while Republicans want to keep the tax rates for wealthy Americans at current levels.

Austerity seems to be the only way to dig the American economy out of this hole. Robert Greifeld, chief executive of stock exchange operator Nasdaq OMX Group Inc, told a Bloomberg Television roundtable that everyone is going to have to take part in the recovery, noting that, “there has to be shared pain.” Scott Davis, CEO of United Parcel Service Inc., agreed with the sentiment expressed by Mr. Greifeld.

At some point, the growing debt problem facing America has to be dealt with. Historically, the debt as a percentage of GDP rose to an all-time high at the end of World War II when it stood at 126%. After slowly decreasing to a low of 33% in 1981, the debt has been steadily increasing for the last three decades. The consequences of America’s debt problem have repercussions for the entire global economy, slowing down world commerce. At home, racking up more debt puts more pressure on future generations of Americans to solve the problem.

There is a growing concern about the debt among CEOs. Steven Rattner, head of Willett Advisors LLC said that “for the first time, there is tremendous support in the business community even if it isn’t exactly what everyone in the business community would want to see”. With more CEOs emphasizing the need for a solution, the prospects of turning the tide become brighter. How the debt problem will be dealt with remains uncertain – many factors, such as the outcome of the election and the raising of the debt ceiling play a big role. What is certain as of right now is that the US debt problem is bigger than it has been for more than sixty years.

Posted by: Samuel Benka

Sources: The New York Times, The Wall Street Journal, Reuters

Photo Credit:Fix the Debt News Conference Courtesy of Flickr user Talk Radio News Service

An Invitation: Better Capitalism Book Discussion

You are invited to:

The Program on America and the Global Economy (PAGE)

Presents a Book Launch:

 

 

Better Capitalism

Renewing the Entrepreneurial Strength of the American Economy

 

Featuring:  Author, Robert E. Litan, Director of Research, Bloomberg Government, formerly the vice president for research and policy for the Kauffman Foundation and a past senior fellow at the Brookings Institution 

Moderated by: Kent Hughes, Director, Program on America and the Global Economy

 

Better Capitalism focuses on the huge – but often unrecognized – importance of entrepreneurship to overall economic growth.  The book explains how changes in seemingly unrelated policy arenas – immigration, education, finance, and federal support of university research – can accelerate America’s recovery from recession and spur the nation’s rate of growth in output while raising living standards.  The authors also outline an innovative energy strategy and discuss the potential benefits of government belt-tightening steps.  Sounding an optimistic note when gloomy predictions are the norm, Litan and Schramm show that with wise and informed policymaking, the American entrepreneurial engine can rally and the true potential of the U.S. economy can be unlocked.

Wednesday, October 24, 2012   9:00-10:30 a.m.

6th Floor Board Room, Woodrow Wilson Center 

RSVP (acceptances only) to page@wilsoncenter.org

 

The Woodrow Wilson Center is located in the Ronald Reagan Building at 1300 Pennsylvania Avenue, N.W. (Federal Triangle Metro stop on the Blue/Orange Line).For a map and directions see: http://www.wilsoncenter.org/

Please bring photo ID and allow time for the security checkpoint.

Bringing Veterans and their Skills to the Manufacturing Sector

Four companies- Boeing, Lockheed-Martin, Alcoa Inc., and General Electric- are taking on the issue of veteran unemployment in a creative way. On October 15th, this group of industry mammoths unveiled an innovative program designed to train and hire veterans to work in the manufacturing sector. Building upon the substantive skills veterans have already acquired from their military training, these programs will work with local community and technical colleges to help veterans learn new skills and earn additional certifications. This training will enable veterans to begin to fulfill the industry’s need for 600,000 highly-skilled employees which companies say they cannot find in the United States.

This initiative represents a remarkable opportunity for our veterans who are currently experiencing an unemployment rate of 9.8%, two percentage points higher than the national average. According to Jess Immelt, the Chairman and CEO of GE, “we have an opportunity to help veterans with extraordinary leadership capabilities better compete for good paying jobs with a long-term future.” Together, GE, Boeing, Lockheed-Martin, and Alcoa Inc. currently employ 64,000 veterans.

The program is designed to train 15,000 veterans in 10 cities across the United States and with an endowment of $6 million it provides many soldiers with the opportunity to participate free of charge. This program compliments a national effort by the U.S. Chamber of Commerce and the White House to help 100,000 veterans and their spouses find employment by 2014. These efforts, coordinated by the Manufacturing Alliance trade organization, also find partnership in the non-profit sector: San Diego-based Workshops for Warriors seeks to provide veterans with similar opportunities.

With a combination of strong efforts from all sides- private, public, and governmental- the objective of increasing veteran employment in manufacturing is certain to be achieved. In the words of Bob Stevens, Lockheed Martin Chairman and CEO, “America’s veterans want and deserve the opportunity to contribute to our society and provide for their families. There is no greater way to say ‘thanks’ for all their service and sacrifice, which enable all of us to live safe and secure lives, and pursue our dreams every day [than this].”

 

Posted by Sophia Higgins

Sources: Reuters, Department of Defense, DailyFinance, Workshops for Warriors, The Manufacturing Institute

Photo source: 2010 Entrepreneurship Bootcamp for Veterans @ Mays Business Schools’s photostream courtesy of Flickr user Mays Business School

Americans Take Home the Nobel Prize in Economics, Again

On Monday, October 15th the Royal Swedish Academy of Sciences announced the winners of final Nobel Prize of the year, Alvin E. Roth of Harvard University and Lloyd Shapley of UCLA. The two economists were honored for their complementary work on “market design” and “matching theory”, theories which have practical uses in matching everything from students and schools to kidneys and transplant patients. The telephone call alerting the winners was “very unexpected, not unimaginable” for Roth, a professor currently teaching at Stanford who still taught class the morning after the Prize was announced.

Dubbed a form of “economic engineering” by the committee, these celebrated theories are derived from a free market approach which allows demand and supply to bring consumers and producers together to begin the stable allocation process for a good. This work is expanded upon by the professors by introducing market designs mimicking the free market into real-world situations. In fact, their theories are components in software programs that have been used as models for school choice process in New Orleans, Boston, and New York. Hospitals are also employing their matching theory in matching incompatible kidney donors with compatible pairs to form a market swap that benefits both parties. This intuitive system is incredibly useful in streamlining and simplifying the matching process into an algorithm and has the potential to aid in virtually any situation where a pair is needed.

Roth and Shapley mark the second year in a row of American winners of this prize.  2011 awardees Thomas J. Sargent of New York University and Christopher A. Sims of Princeton University were honored for their research on a cause-and-effect relationship between government and economic policy. Certainly, both theories have practical implications for American life and offer important insights into economic choices made every day in the lives of American citizens. Perhaps these winnings will even encourage more American students to pursue studies in STEM education and the sciences.  In the words of Roth, “I’m sure when I go to the class this morning my students will pay more attention.”

Posted by Sophia Higgins

Sources: Wall Street Journal, Reuters, CNN, Nobel Prize.org

Photo source: Nobel-Prize @ Mediocre2010’s photostream courtesy of Flickr user Mediocre2010