A long wrap-up today, with news from all over.
But we’ll start at home.
Major cuts planned for Pennsylvania colleges
The sweeping cuts announced by Gov. Tom Corbett, added to those already implemented last year, amount to more than a fifty percent reduction in state spending on high education, an abysmal betrayal of the public trust and a sacrifice of future generations for the sake of the sacred cow that is austerity.
From Jeff Gammage, Susan Snyder, and Amy Worden of the Philadelphia Inquirer:
Gov. Corbett promised “a thorough, public, and candid conversation” about the rising cost of higher education in announcing a budget that slashes state support to colleges for the second straight year.
The proposed cuts of up to 30 percent, on top of a nearly 20 percent reduction last year, are leading observers in Harrisburg and elsewhere to question whether a major shift is at hand: an effort to defund what some Republican legislators see as wasteful public universities in an era of shrinking resources.
“Do we need all these campuses?” State Sen. Jake Corman (R., Centre) asked Tuesday, promising that the Senate would examine the proliferation of satellite campuses.
“There is a trend underlying all this – that is to defund public education and to defund particularly public higher education,” said Art Hochner, president of the Temple University faculty union. “As if higher education is some kind of private good that individuals get and therefore they ought to pay for it, and pay good bucks for it, as opposed to a public good where the state benefits from investing in having an educated workforce and people who pay taxes.”
Ben Franklin and William Penn must be spinning in their coffins.
Kodak shutters its camera business
Yeah, the header’s a pun, but it just sort of clicked with us.
With Kodak going through yet another bankruptcy, the company that George Eastman built is going out of the camera business.
Eastman Kodak Co, the bankrupt inventor of the hand-held camera, plans to stop making digital cameras, pocket video cameras and digital picture frames in the first half of 2012 in a bid to cut costs.
The move marks the end of an era for Kodak, which is seen as one of the biggest corporate casualties of the digital age, after it failed to quickly embrace modern technologies such as digital photography, a product that it also invented.
The company, which filed for bankruptcy protection last month, said on Thursday that it will take a charge of about $30 million for the business exit, which it expects to generate annual operating savings of more than $100 million.
Kodak said the decision was the “logical extension” of the company’s recent strategy of trying to improve margins in the camera business by narrowing its product portfolio, geographies and retail outlets.
The company, which generates three-quarters of its revenue from digital, now plans to instead focus on seeking licensees to expand its brand licensing program. It said it will continue to offer online and retail photo printing, and desktop printers.
Once again, Obama shows who owns the White House
A hint: It’s not thee or we.
From Clea Benson and Phil Mattingly of Bloomberg:
President Barack Obama today nominated a JPMorgan Chase & Co. (JPM) executive to the five-member board of the Federal Deposit Insurance Corp.
Jeremiah O. Norton, 34, who is an executive director in the bank’s JPMorgan Securities unit, previously served as a policy adviser in the U.S. Treasury Department during the administration of President George W. Bush. Before that, he was an aide to a Republican congressman, Edward Royce of California.
You might say government has been privatized. . .which brings us to our next item.
Sacramento sells off its parking
During our stint reporting for the Sacramento Bee, we watched in disgust as the city fell all over itself to break the city’s northern green belt to satisfy the buyers of the Kansas City Kings National Basketball Association franchise.
The team was bought by developers, and they said they needed to build a stadium in the green zone, so the city and our employer rolled over.
Now the Kings owners are putting the screws to the city again, this time demanding that they build a new stadium, and to build it, the city’s selling off the right to charge for street parking.
From Sacramento television News10/KXTV:
The Sacramento City Council decided to move ahead with their plan to privatize the city’s parking assets, without putting it on the ballot, in order to fund a new sports and entertainment arena, at Tuesday’s city council meeting.
The city believes it could raise up to $200 million if it handed over revenue from city parking to a private company for the next 50 years.
City Council member Sandy Sheedy introduced a motion to put the issue before voters on the June ballot.
The council voted 5 to 4 against Sheedy’s motion.
Sheedy’s plan conflicted with the city’s March 1 deadline to deliver a funding plan to the NBA. If there was no plan, the NBA said it would allow the Kings’ owners to consider moving the franchise.
Brazil privatizes its airports
The rationale for the major sell-off of the transportation commons is the rush to get thigns ready for the Olympics two years hence.
From the BBC:
Brazil’s government has awarded contracts to privatise operations at three of its most important state-owned airports.
They include the country’s largest in Sao Paulo.
Private companies paid a total of 24.5bn reais ($14bn; £8.9bn) for the concessions sold at auction.
The move by the government aims to get the country’s overcrowded airports ready for the 2014 World Cup and the Olympics in 2016.
Infraero, the state-run agency that has long operated airports, retains a 49% stake in the consortiums that will run the newly-privatised airports.
A consortium of Brazilians and South Africans paid about $9bn to operate Sao Paulo’s Garulhos airport for 30 years.
The other airports involved are: Viracopos airport in Campinas – sold to French and Brazilian firms; and the concession for a new terminal in the capital’s President Juscelino Kubitschek airport, which went to a Brazilian and Argentine consortium.
The three airports together account for 30% of passenger traffic in Brazil, whose economy has been booming for the past decade.
One brand of privatization unwelcome in Iraq
That would be all those foreign private security contractors, who have a deservedly bad reputation.
From Agence France-Presse:
Iraq deeply mistrusts private security companies and wants to limit their operations here, officials say, while the contractors themselves have faced bureaucratic delays and detentions.
This mistrust stems from perceived arrogant behavior by employees of these firms in the past and various incidents of violence involving them.
The most infamous incident was the 2007 killing of at least 14 civilians in Baghdad’s Nisur Square by gunmen from the Blackwater firm guarding a US embassy convoy.
While Blackwater, now called ACADEMI, was later banned from the country, security contractors still guard U.S. diplomats in Iraq and provide security for various foreign companies.
“Iraq is not looking to expand the security companies’ work here,” government spokesman Ali al-Dabbagh said in an interview with AFP.
Airline strike keeps some French grounded
The strike, mentioned in the wraps of recent days, continued today.
From Agence France-Presse:
French flag-carrier Air France cancelled more than a third of its long-haul flights and a quarter of shorter journeys Thursday as a four-day strike by aviation workers entered its final day.
The strike by pilots, flight attendants and ground staff was costing Air France eight to 10 million euros ($11-$13 million) per day, the company said.
Air France said it was operating 65 percent of its long-haul flights and 75 percent of medium- and short-haul flights, including by regional subsidiaries.
The strike hit services at Paris’s Charles de Gaulle airport, a global aviation hub, as well as several French regional airports.
Unions called the strike to protest against a draft law that would require aviation workers to individually give 48 hours notice prior to striking, saying this limits labour rights.
There’s a dark side to Germany’s economic picture
And that would be that the country’s relatively high employment rates are grounded in an economy in which the greatest job growth comes at the bottom, where there is no legally mandated mandated minimum wage.
From Sarah Marsh and Holger Hansen of Reuters:
[C]ritics say the reforms that helped create jobs also broadened and entrenched the low-paid and temporary work sector, boosting wage inequality.
Labor office data show the low wage sector grew three times as fast as other employment in the five years to 2010, explaining why the “job miracle” has not prompted Germans to spend much more than they have in the past.
Pay in Germany, which has no nationwide minimum wage, can go well below one euro an hour, especially in the former communist east German states.
“I’ve had some people earning as little as 55 cents per hour,” said Peter Huefken, the head of Stralsund’s job agency, the first of its kind to sue employers for paying too little. He is encouraging other agencies to follow suit.
Data from the European Statistics Office suggests people in work in Germany are slightly less prone to poverty than their peers in the euro zone, but the risk has risen: 7.2 percent of workers were earning so little they were likely to experience poverty in 2010, versus 4.8 percent in 2005.
Consumer prices soaring in China
It’s bad, but not as bad as the numbers at first might indicate, since some of the inflation resulted from higher prices on holiday goods.
From the BBC:
China’s rate of inflation unexpectedly accelerated in January for the first time since it peaked in July, as consumers raised spending around Chinese New Year.
Consumer prices rose 4.5% from a year earlier, the National Bureau of Statistics said. That compares with 4.1% in December.
Analysts were expecting prices to rise by 4.0%.
High consumer prices have threatened to derail growth in China.
Inflation had been easing steadily since hitting a three-year high of 6.5% in July.
Japan: Another good news/bad news story
For Japan’s economy, there’s one real bring spot: Construction.
Of course all that construction is only because of the most powerful earthquake of modern times.
From Andy Sharp of Bloomberg:
Japan’s machinery orders fell at the fastest pace in three months in December as a faltering global economy and gains by the yen dimmed the outlook for exporters.
Bookings, an indicator of capital spending, decreased 7.1 percent from the previous month, the Cabinet Office said in Tokyo today, after surging 15 percent in November. The median estimate of 29 economists surveyed by Bloomberg News was for a 5 percent decline.
Japan’s exports fell for three straight months through December as European leaders grappled with the debt crisis that is driving the euro region into a recession. Spending may rebound as earthquake reconstruction work kicks in and today’s report showed companies forecasting a 2.3 percent increase in orders this quarter.
“Growing uncertainties over the global economy and the yen’s gains could discourage companies” from spending, said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research in Tokyo. At the same time “it’s unlikely that capital spending will turn into a declining trend in coming months because of reconstruction demand,” he said.