July 23: Economic

Despite hopes that the economy is recovering, one indicator is not pointing in that direction. The sale of existing homes has gone down, and the inventory has risen for the month of June. This was reported by the National Association of Realtors, who said that home sales during the spring had gone up because buyers wanted to take advantage of tax credits being offered. Those sales had to be completed by April 30th. Sales in the Northeast were up 7.9%, but everywhere else in the country, sales fell. This is expected to last through the summer. Currently, there are 3.99 million homes unsold in the US. This is the highest level since August 2009. There had been hope that the tax credits would have helped sell more homes. More foreclosures are expected in the coming months, which will cause the inventories to rise even higher. This should cause prices to drop in the near future. There is some hope in the fact that mortgage rates are the lowest they have been since 1971. Economists continue to expect that home prices will continue to decline throughout the year.

The Obama tax credits that were designed to prop up the housing market and help homeowners who were having problems have expired, and did not provide as much relief as hoped. Short-term solutions provide only temporary help when there are larger market issues in a struggling economy.

Timiraos, Nick. “Home Sales Dip as Unsold Inventory Persists.” The Wall Street Journal. 23 July 2010.

July 23: National

A main part of President Obama’s plan for America was the passing of “cap and trade,” an effort to change the way Americans use energy. That plan died this week when Senate Majority Leader Harry Reid announced that they were not able to get the 60 votes needed to pass even a smaller version of the original plan. There is some thought that the White House may try to get these provisions in under the Clean Air Act and the Environmental Protection Agency. Those in support of the bill believe that charging companies more to use coal and oil would encourage research into cleaner types of energy, while opponents believe that those costs would be passed along to consumers and continue to hurt the economy. China is currently the foremost consumer of energy in the world, and they refuse to cap their emissions. There is fear that if the US puts in “cap and trade,” US manufacturers would be at a disadvantage in the world economy. Currently, the EPA is in charge of setting limits on greenhouse gasses, but that is opposed by Republicans and even some Democrats. Not knowing what direction this will take the country affects companies who are investing in wind and solar energy. But, solar energy is growing at the rate of about 40% a year and that is expected to continue.

While it would be helpful for the US to invest in developing other forms of energy, besides oil and coal, raising taxes on businesses at this point could be very dangerous. It could affect how many workers are hired at a time when our employment rate is high. And if the tax increases are passed onto consumers, it will have a ripple effect.

Power, Stephen. “Senate Halts Effort to Cap CO2 Emissions.” The Wall Street Journal. 23 July 2010.

July 23: International

The United States Senate has asked two Scottish officials to testify next week at a hearing concerning Scotland’s release of Libyan terrorist, Abdel Baset al-Megrahi. He was the only person ever convicted in the 1988 bombing of a Pan Am jet, killing 270 people, 189 of them American. Scotland granted him a compassionate release because they were told he was dying of prostate cancer and had only a few months to live. It has been nearly a year since his release, and he is very healthy. Allegations have arisen that he was released under a deal worked out with British Petroleum, BP, who is responsible for the Gulf oil spill. It seems that BP may have made a $900 million oil deal with Libya made in 2007, and BP worked for his release as part of the deal. At this point, both Scottish officials have said they will not appear before a Senate hearing, claiming that they have provided a written response. BP Chief Executive Tony Hayward has also been asked to testify, but he has not responded.

This situation is despicable and the US has every right to expect these people to appear. 189 Americans were killed in that bombing, and if BP and the Scottish government somehow got the man released for monetary reasons, then this needs to be brought out into the open. BP’s role in the oil spill makes this especially abhorrent.

Sonne, Paul and Alistair MacDonald. “Scotland Rebuffs Lockerbie Inquiry.” The Wall Street Journal. 23 July 2010.

July 13: National

BP is working on a new way to seal the broken well in the Gulf of Mexico. If this works, this may end a disaster that has gone on for 3 months, cost BP millions of dollars, and alienated the company from millions of Americans. Despite numerous attempts to fix the problem, nothing has worked. Over the next few days, the company will perform a series of tests to make sure that the newest effort is successful. BP has stated that there will be challenges as they go forward. Even if it is not completely successful, it will be helpful during hurricane season. BP stated that the accident, which killed 11 people, has cost them approximately $3.5 billion so far. It is believed that between 35,000 to 60,000 barrels of oil have been spilled into the Gulf each day. They hope that if this new sealing cap works, it will allow them to capture 60,000 to 80,000 barrels a day.

This situation continues to be a nightmare for communities along the Gulf. People are out of work, the tourist industry has been hurt, and wildlife has suffered. I find it hard to find any sympathy for BP. Even once the well has been capped, their responsibility will continue for decades.

Daker, Susan and Cassandra Sweet. “BP Attempts to Install New Sealing Cap.” The Wall Street Journal. 13 July 2010.

July 13: Economic

Today marked a fifth day in a row that the stock market continued to show gains. Although slight, the market was up 18.24 points. This past week has shown a rally that has encouraged investors. This is the longest winning streak the Dow Jones Industrial Average has had in three months. US Treasuries have gone up slightly and Greece’s budget deficit showed some shrinkage.

Any slight upward movement is good news. Investors need to see signs of improvement to encourage further growth of the economy, as people are still nervous.

Cheng, Jonathan. “Stocks Gain for Fifth Day.” The Wall Street Journal. 13 July 2010.

July 13: International

A Somali terrorist group, al Shabaab, claimed responsibility for bombings in the city of Kampala in Uganda, which killed 76 people. This is the first time that this group has moved beyond Somalia. Their goal had been to impose radical Islamist ideas inside of that country, but they are now moving into other areas of Africa. This group has known ties to Osama bin Laden. In 2008, its leaders publicly pledged their loyalty to bin Laden and the next year al Qaeda formally accepted them into their group. It is not known how many members al Shabaab has, but it may be as many as 10,000. There are ties to the US as well. Two years ago, a group of Somali Americans left Minnesota to become members. In June 2010, two men were arrested at JFK, when they were attempting to go to Somalia to join this group. And, one of their top leaders is from Alabama.

The US needs to continue to be vigilant in tracking the terrorist threat throughout the world. Groups like al Qaeda work to bring their influence to even the poorest countries in the world. This is a reminder to America, that we must not only be watching out for currently know enemies in the Middle East and Afghanistan, and we need to consider where they may find future allies who sympathize with their radical views.

Johnson, Keith. “In Attack, al Qaeda-Linked Somali Group Expands Reach.” The Wall Street Journal. 13 July 2010.

July 9: Economic

It appears that consumer spending is not going up as quickly as expected and there are fears that stores will be left with unsold inventory. This shows a decrease in consumer confidence as the job market still has not improved much. This is not good news for stores, who were hoping to see spending by consumers increase. As a result, retailers are more conservative when planning for future sales and there is some concern that the back-to-school sales, usually a heavy selling season, will be poor. Retailing usually tells how well an economic recovery is going, but sales have dropped off since April. The Gap is concerned and plans to keep their inventory focused on t-shirts and jeans for the holiday season. Macy’s and Saks expect little or no growth. At the other end of the economic spectrum, car sales in June were better than this time last year, but down from May.

As the recession continues, it seems as though retailers are feeling the effects also, but seem somewhat optimistic. Hopefully, the job market will improve and consumers will be willing to spend. More needs to be done to encourage hiring and produce jobs that bring about more economic growth.

Holmes, Elizabeth and Justin Lahart. "Retailers Stock Up on Caution." The Wall Street Journal. 9 July 2010.

July 8: International

An investigation in the United Kingdom into allegations that some scientists had changed data to support their belief in man-made global warming showed that that was not the case. However, the report did find that they were not sharing data and had misled people with some information. This is the third investigation in recent months regarding this issue dealing with climate scientists at the Climatic Research Unit of the UK’s University of East Anglia. These reports agree with the United Nation’s 2007 Intergovernmental Panel on Climate Change that global warming is “unequivocal” and is “very likely” caused by humans. The scientists were told that they needed to be more responsive to their critics and to do a better job of explaining their methods. This report came about from the release of 1,000 emails hacked from the computers at the university, which seemed to indicate that the scientists were hiding information. The integrity of the scientists stayed intact, but their failure to be open with others in their field reflects badly on the university.

Whether global warming is happening as a result of humans or if it is simply a natural cycle for the Earth has not been proven completely either way. The best way to find out is to have open, honest investigations and decide how to proceed. It is alright to question their methods, but the scientists in charge must share information willingly and not try to make information appear the way they would like it to. That simply leads to mistrust and solid scientific information could be discounted simply because those scientists have lost the trust of the public.

Ball, Jeffrey and Guy Chazan. "Report Backs Climate Data, Scolds Scientists." The Wall Street Journal. 8 July 2010.

July 7:National

On Tuesday July 6, 2010, the Justice Department filed a law suit against the state of Arizona to block its new immigration law, which will take effect later this month. Illegal immigration would become a crime under the statutes of the state of Arizona. Also, police, when stopping people for other crimes, would be required to check their immigration status. Arizona has stated that they have put this law in place because they believe the federal government has not done enough to help protect their border with Mexico from illegal immigrants. The Justice Department says that Arizona’s law is a challenge to Federal authority regarding immigration. This new law is proving to be politically divisive, not only in Arizona, but in other states, particularly those with Democratic offices soon to be vacated in November. Arizonans, and others who support the law, say it has been brought about because of the high number of kidnappings and murders that have occurred as a result of illegal immigration. Arizona Governor Jan Brewer has stated that if the Obama administration is concerned about challenges to its authority, it should also address “sanctuary policies” in cities where police are not permitted to cooperate with the immigration officials. There is concern in the Democratic Party that this move by the Obama administration will be looked at badly by middle class voters, and may affect November outcomes. A Wall Street Journal/NBC News survey shows that 45% said they would be comfortable with a candidate who favors the law and only 38% said they would not. 61% of people in Colorado said they would like a law like that as well. Not all Democrats support the law suit and in Arizona, 3 Democrats up for reelection said it would be better to have the Federal government fix the broken system and enhance security on the border. Washington says that if Arizona is allowed to go forward with this law, other states will make up their own laws, and the country will not have a clear set of immigration standards.

Arizona has been put in a very difficult position. Immigration laws should be made by the Federal government, but the ones in place are not being enforced and crime in Arizona has risen dramatically. The Governor has asked for additional troops along the border, but was given only a small percentage of what she asked for. With no clear plan being offered by Washington, the state has little choice but to protect its citizens as best it can. This is likely to become an issue in November, as more and more Americans see Washington as unresponsive to the needs of its citizens. To some, it seems as though Washington is taking the side of the illegal immigrants, or, perhaps its own authority, rather than looking out for the safety and security of Americans.

Meckler, Laura, Evan Perez and Miriam Jordan. "U.S. Hits Immigration Law." The Wall Street Journal. 7 July 2010.

July 2: International

40 people were killed and 175 people were injured in the city of Lahore in eastern Pakistan by Taliban extremists. Three suicide bombers committed this crime to attack followers of a moderate version of Islam. The attack happened at a Sufi shrine, where a crowd of people praying had gathered. Most Pakistanis belong to the Sufi sect. Its followers practice dervish dancing and are considered heretics by the Taliban, although no group has claimed responsibility for this attack. Al Qaeda extremists do not tolerate versions of Islam different from theirs and have attacked other groups in recent months. In May, 95 members of the Ahmadi sect were killed; the Shia community has been under attack for years and in February, 20 were killed during a religious festival. The Sufis, which can be either Sunni or Shia, practice their faith focusing more on its mystical natures. The Taliban has increased the number of suicide bombings in public places and government buildings. Officials think that the Pakistani people may begin to fight back as the violence grows.

Violence in this portion of the world continues to escalate as religious extremism grows. Change will have to come from within the governments by separating their religious views. In this particular instance, it is members of Islam fighting different sects of their own religion. This highlights the intolerance of the Taliban and the Al Qaeda militants against others of any belief system that does not agree with theirs. Maybe we should take their intolerance into consideration when addressing the issue of their attacks on the West, and realize that may be a contributing cause.

Wright, Tom and Zahid Hussain. "Triple Suicide Bombing in Pakistan Kills 40." The Wall Street Journal. 2 July 2010.

June 30: National

In an effort to calm the tension between states along the US-Mexico border and the Obama administration, the administration had agreed to deploy 1,200 troops along the border to prevent illegal administration. The governors of those states are in disagreement with those numbers. Arizona Governor Jan Brewer has been given 524 troops, which is more than twice as many given to Texas, California or New Mexico, but she feels this is still inadequate. Under the plan, Texas will get 250 guards, even though it has 60% of the US-Mexico border, while Arizona has only 17% percent. Currently, the Obama administration has plans to sue Arizona over a law requiring police to check the immigration status of someone who has been stopped for another crime. While the governors of California and New Mexico are not as unhappy with the troop allocations, Texas and Arizona say that their problem is immediate, due to the high crime rate along their border. In 2009, Tucson, Arizona saw the arrest of 241,000 illegal immigrants attempting to cross the border, according to Homeland Security. That number is down 36% since 2007. Arizona senator John McCain is working toward bringing 3,000 troops to the borders of Arizona and Texas.

The illegal immigration issue on the US’ southern border has become a national tragedy. While most immigrants come to this country legally, a growing number attempt to cross the border and gain residence illegally. Many of them, by some estimates as much as 80%, are actually felons or are trying to smuggle drugs from South America. The crime rate along the border itself has a direct impact on the American citizens who live in that area. Not only are their lives in danger from violent criminals, but they must also pay for the costs of police, prosecution, etc. It is easy to understand the frustration of Arizona residents who support the new law and are about to be sued by the Federal government who they believe has failed them. At least the Obama administration should give these states the number of troops they feel they need to guard the border while the other issues, such as granting amnesty to those already here illegally, are being worked out.

Stein, Perry. "Arizona, Texas Call for More Border Troops." The Wall Street Journal. 30 June 2010.

July 2: Economic

Global demand for transportation fuels is at such a high level that deepwater oil drilling remains a necessity despite of the US moratorium in the Gulf of Mexico following BP’s oil spill. This is the opinion of Total SA Chief Executive Christophe de Margerie. Deep sea drilling continues around the world, for example in the North Sea. If that drilling were to stop, prices would skyrocket. This opinion is shared by other industry officials. He does admit that we need stronger safety measures around the world, but states that could bring higher oil prices. Oil prices have been stable over the past 6 months due partly to falling demand and stricter environmental standards. Total, a French oil company, has been one of the highest performing in the industry, but faces tough times ahead. He believes that as the Euro continues to weaken, oil prices will go up, and expects oil prices could be as high as $90 a barrel by the end of 2010. Margerie believes that those in the energy industry should work together to improve safety standards to keep those costs down. The industry will always be looking for new ways to improve safety, and he makes the point that rather than trying to blame BP, the best thing to do is to work together to solve the problem. BP is going to sell off $10 million dollars in assets this year in order to pay damages for the Gulf disaster. This may be an opportunity for others in the industry to purchase their assets and strengthen their own positions.

Clearly the disaster in the Gulf is beyond horrifying. There is no question that oil industry standards work largely to protect the oil industry and their earnings. However, those earnings are shared by their stock holders, many of whom are average American citizens and small businesses. Adding to the problem is the fact that deepwater drilling has been brought about by bans on near shore drilling. As the world continues its dependence on petroleum products, drilling cannot stop. Although many other forms of energy exist- such as solar and wind- there are no alternatives on the horizon that will provide the large amounts of energy needed. Therefore, it is vital that the oil industry works toward improved safety standards that allow them to meet the world’s needs, while protecting the lives of its workers as well as the safety of the ecosystems that they affect.

Amiel, Geraldine. "Total Chief: Don't Bar Deep Water Oil." The Wall Street Journal. 2 July 2010.

June 22: International

Kandahar, a city in the southern part of Afghanistan has been run by the Taliban for many years. Currently, top US and Afghan officials are looking for ways to change that. Previously, efforts had leaned toward fighting the Taliban, but now they are beginning to realize the need of having a functioning government in that area. This includes issues like power, police and public health, to name a few. Officials realize that the locals will continue to support the Taliban unless a functioning government is put in place. These new plans are at the heart of the US lead coalition’s attempts to stabilize Afghanistan. US troop levels are continuing to increase in the belief that the spike in Taliban bombings and assassinations of officials will stop. This should help push the Taliban out of that part of the country. Attempts to bring a stronger government into this area have proved difficult in the past because some of the most powerful Afghans live in this area. Military operations are generally short skirmishes. US and coalition forces believe that once the proper government is in place, then they will need to change the minds of the people and help then realize their future can be in their hands. Currently the coalition is holding meetings with the elders showing them how these changes can come about and how they will benefit the Afghan people.

President Obama and Vice President Biden have both talked about the US’ intention to pull our troops out of Afghanistan sooner rather than later. In order for that to happen, it is vital that a government be in place that is workable and is accepted by the people. If not, the Taliban will simply fill in the void left when the troops go home. The primitive conditions in Afghanistan are what have led to the Taliban’s strong presence in the area. This may be the only opportunity for the West to intervene and bring a higher standard of living and peace to a war-torn region.

Rosenberg, Matthew. "Infrastructure's Importance Rises in Kandahar Effort." The Wall Street Journal. 22 June 2010.

June 22: National

On Monday June 21 Faisal Shahzad of Connecticut plead guilty to a 10 count indictment for activities connected to his attempt to set off a car bomb in New York City’s Times Square last May. Shahzad, an American citizen, was born in Pakistan, and calls himself a “Muslim soldier” who sees it as his duty to seek revenge for US attacks in Muslim countries. He stated in court that he would plead guilty “100 times over” until the US pulls troops from Afghanistan and Pakistan. Shahzad attended college in Connecticut, was married and had lived in the US for 10 years when this occurred. He told officials that he had gone to Pakistan to join a Taliban militant extremist group based there. He stayed with that group for about 40 days and received training in explosives. He said he received funding from various sources and returned to Connecticut in February when he began to build the bomb. He told authorities that he chose Times Square rather than a specific building. He lit the fuses on the bomb hoping that it would explode in less than 5 minutes. He then walked to Grand Central Station and took the train back to Connecticut, carrying a fold-up 9 mm rifle in his laptop case in case he was attacked. The bomb was discovered by street vendors moments after he left it. Shahzad was arrested aboard a flight to Dubai that was about to leave JFK Airport. He admitted to law enforcement that he carried out his attack willingly. He waved his Miranda rights and he faces life in prison.
Shahzad is only one of many home-grown terrorists who have surfaced in the past couple of years. I find their determination to kill Americans to seek revenge is chilling. Attacking and killing innocent Americans who are just trying to go about their daily lives is horrible and will not solve the problems between our countries.

Bray, Chad. "Bomber Pleads Guilty in Plot." The Wall Street Journal. 22 June 2010.

June 21: Economic

The oil spill in the Gulf is causing prices of shrimp and oysters to go up, but is not having much impact on the larger seafood industry. That is because only 2% of the nation’s supplies come from the Gulf. 83% of US seafood is imported. However, the effect on fisheries in the Gulf is devastating. For example, the wholesale price of Gulf brown shrimp as well as oyster has gone up 50% since the spill, and there is no end in sight. Other seafood prices are affected as well. Unless consumer and retailers are looking for seafood from the Gulf specifically, they are not likely to notice price changes. In fact, 90% of shrimp is imported in this country, but production is expected to increase and prices will decline. Any small amount of increase in price will be caused by fear of shortages, according to industry analysts. Oysters are most likely to be impacted because 67% of US supply comes from the Gulf. Until they are able to cap the well, it is difficult to know what the long term effects will be on the Gulf seafood and fishing industries. Fishermen are the most greatly affected by this, while restaurants and consumers can substitute other seafood for oysters. The situation is a true catastrophe for the Gulf fisheries.

The current situation in the Gulf is truly terrible, effecting not only the wildlife and tourism, but people whose livelihoods depend on the seafood industry. With every passing day, the effects become greater. An industry that is not normally in the forefront of American awareness is being devastated. This is yet another example of why the situation in the Gulf needs to be fixed in the most efficient and timely manner.

Zhao, Emmeline. "Impact on Seafood Prices Is Limited." The Wall Street Journal. 21 June 2010.