Category: Business


Bravo Boner

Carney grants NBC permission to reschedule debate

TEXT: Obama’s Letter to Boehner, Reid on Joint Session of Congress

“Dear Mr. Speaker: (Dear Mr. Leader:)

Our Nation faces unprecedented economic challenges, and millions of hardworking Americans continue to look for jobs. As I have traveled across our country this summer and spoken with our fellow Americans, I have heard a consistent message: Washington needs to put aside politics and start making decisions based on what is best for our country and not what is best for each of our parties in order to grow the economy and create jobs. We must answer this call.

Therefore, I respectfully request the opportunity to address a Joint Session of Congress on September 7, 2011, at 8:00 p.m. It is my intention to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the Middle Class and working Americans, while still reducing our deficit and getting our fiscal house in order. It is our responsibility to find bipartisan solutions to help grow our economy, and if we are willing to put country before party, I am confident we can do just that.

Thank you for your consideration.

Sincerely,

BARACK OBAMA”

Obama blows $535 million dollars on a crony capitalist scheme declaring bankruptcy today

Obama-backed solar firm collapses after big federal loan guarantee

;(

Chairman Ben S. Bernanke

At the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming

August 26, 2011

The Near- and Longer-Term Prospects for the U.S. Economy

Good morning. As always, thanks are due to the Federal Reserve Bank of Kansas City for organizing this conference. This year’s topic, long-term economic growth, is indeed pertinent–as has so often been the case at this symposium in past years. In particular, the financial crisis and the subsequent slow recovery have caused some to question whether the United States, notwithstanding its long-term record of vigorous economic growth, might not now be facing a prolonged period of stagnation, regardless of its public policy choices. Might not the very slow pace of economic expansion of the past few years, not only in the United States but also in a number of other advanced economies, morph into something far more long-lasting?

I can certainly appreciate these concerns and am fully aware of the challenges that we face in restoring economic and financial conditions conducive to healthy growth, some of which I will comment on today. With respect to longer-run prospects, however, my own view is more optimistic. As I will discuss, although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years. It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals. In the interim, however, the challenges for U.S. economic policymakers are twofold: first, to help our economy further recover from the crisis and the ensuing recession, and second, to do so in a way that will allow the economy to realize its longer-term growth potential. Economic policies should be evaluated in light of both of those objectives.

This morning I will offer some thoughts on why the pace of recovery in the United States has, for the most part, proved disappointing thus far, and I will discuss the Federal Reserve’s policy response. I will then turn briefly to the longer-term prospects of our economy and the need for our country’s economic policies to be effective from both a shorter-term and longer-term perspective.

Near-Term Prospects for the Economy and Policy
In discussing the prospects for the economy and for policy in the near term, it bears recalling briefly how we got here. The financial crisis that gripped global markets in 2008 and 2009 was more severe than any since the Great Depression. Economic policymakers around the world saw the mounting risks of a global financial meltdown in the fall of 2008 and understood the extraordinarily dire economic consequences that such an event could have. As I have described in previous remarks at this forum, governments and central banks worked forcefully and in close coordination to avert the looming collapse. The actions to stabilize the financial system were accompanied, both in the United States and abroad, by substantial monetary and fiscal stimulus. But notwithstanding these strong and concerted efforts, severe damage to the global economy could not be avoided. The freezing of credit, the sharp drops in asset prices, dysfunction in financial markets, and the resulting blows to confidence sent global production and trade into free fall in late 2008 and early 2009.

We meet here today almost exactly three years since the beginning of the most intense phase of the financial crisis and a bit more than two years since the National Bureau of Economic Research’s date for the start of the economic recovery. Where do we stand?

There have been some positive developments over the past few years, particularly when considered in the light of economic prospects as viewed at the depth of the crisis. Overall, the global economy has seen significant growth, led by the emerging-market economies. In the United States, a cyclical recovery, though a modest one by historical standards, is in its ninth quarter. In the financial sphere, the U.S. banking system is generally much healthier now, with banks holding substantially more capital. Credit availability from banks has improved, though it remains tight in categories–such as small business lending–in which the balance sheets of potential borrowers remain impaired. Companies with access to the public bond markets have had no difficulty obtaining credit on favorable terms. Importantly, structural reform is moving forward in the financial sector, with ambitious domestic and international efforts underway to enhance the capital and liquidity of banks, especially the most systemically important banks; to improve risk management and transparency; to strengthen market infrastructure; and to introduce a more systemic, or macroprudential, approach to financial regulation and supervision.

In the broader economy, manufacturing production in the United States has risen nearly 15 percent since its trough, driven substantially by growth in exports. Indeed, the U.S. trade deficit has been notably lower recently than it was before the crisis, reflecting in part the improved competitiveness of U.S. goods and services. Business investment in equipment and software has continued to expand, and productivity gains in some industries have been impressive, though new data have reduced estimates of overall productivity improvement in recent years. Households also have made some progress in repairing their balance sheets–saving more, borrowing less, and reducing their burdens of interest payments and debt. Commodity prices have come off their highs, which will reduce the cost pressures facing businesses and help increase household purchasing power.

Notwithstanding these more positive developments, however, it is clear that the recovery from the crisis has been much less robust than we had hoped. From the latest comprehensive revisions to the national accounts as well as the most recent estimates of growth in the first half of this year, we have learned that the recession was even deeper and the recovery even weaker than we had thought; indeed, aggregate output in the United States still has not returned to the level that it attained before the crisis. Importantly, economic growth has for the most part been at rates insufficient to achieve sustained reductions in unemployment, which has recently been fluctuating a bit above 9 percent. Temporary factors, including the effects of the run-up in commodity prices on consumer and business budgets and the effect of the Japanese disaster on global supply chains and production, were part of the reason for the weak performance of the economy in the first half of 2011; accordingly, growth in the second half looks likely to improve as their influence recedes. However, the incoming data suggest that other, more persistent factors also have been at work.

Why has the recovery from the crisis been so slow and erratic? Historically, recessions have typically sowed the seeds of their own recoveries as reduced spending on investment, housing, and consumer durables generates pent-up demand. As the business cycle bottoms out and confidence returns, this pent-up demand, often augmented by the effects of stimulative monetary and fiscal policies, is met through increased production and hiring. Increased production in turn boosts business revenues and household incomes and provides further impetus to business and household spending. Improving income prospects and balance sheets also make households and businesses more creditworthy, and financial institutions become more willing to lend. Normally, these developments create a virtuous circle of rising incomes and profits, more supportive financial and credit conditions, and lower uncertainty, allowing the process of recovery to develop momentum.

These restorative forces are at work today, and they will continue to promote recovery over time. Unfortunately, the recession, besides being extraordinarily severe as well as global in scope, was also unusual in being associated with both a very deep slump in the housing market and a historic financial crisis. These two features of the downturn, individually and in combination, have acted to slow the natural recovery process.

Notably, the housing sector has been a significant driver of recovery from most recessions in the United States since World War II, but this time–with an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines–the rate of new home construction has remained at less than one-third of its pre-crisis level. The low level of construction has implications not only for builders but for providers of a wide range of goods and services related to housing and homebuilding. Moreover, even as tight credit for some borrowers has been one of the factors restraining housing recovery, the weakness of the housing sector has in turn had adverse effects on financial markets and on the flow of credit. For example, the sharp declines in house prices in some areas have left many homeowners “underwater” on their mortgages, creating financial hardship for households and, through their effects on rates of mortgage delinquency and default, stress for financial institutions as well. Financial pressures on financial institutions and households have contributed, in turn, to greater caution in the extension of credit and to slower growth in consumer spending.

I have already noted the central role of the financial crisis of 2008 and 2009 in sparking the recession. As I also noted, a great deal has been done and is being done to address the causes and effects of the crisis, including a substantial program of financial reform, and conditions in the U.S. banking system and financial markets have improved significantly overall. Nevertheless, financial stress has been and continues to be a significant drag on the recovery, both here and abroad. Bouts of sharp volatility and risk aversion in markets have recently re-emerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation, including the recent downgrade of the U.S. long-term credit rating by one of the major rating agencies and the controversy concerning the raising of the U.S. federal debt ceiling. It is difficult to judge by how much these developments have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth. The Federal Reserve continues to monitor developments in financial markets and institutions closely and is in frequent contact with policymakers in Europe and elsewhere.

Monetary policy must be responsive to changes in the economy and, in particular, to the outlook for growth and inflation. As I mentioned earlier, the recent data have indicated that economic growth during the first half of this year was considerably slower than the Federal Open Market Committee had been expecting, and that temporary factors can account for only a portion of the economic weakness that we have observed. Consequently, although we expect a moderate recovery to continue and indeed to strengthen over time, the Committee has marked down its outlook for the likely pace of growth over coming quarters. With commodity prices and other import prices moderating and with longer-term inflation expectations remaining stable, we expect inflation to settle, over coming quarters, at levels at or below the rate of 2 percent, or a bit less, that most Committee participants view as being consistent with our dual mandate.

In light of its current outlook, the Committee recently decided to provide more specific forward guidance about its expectations for the future path of the federal funds rate. In particular, in the statement following our meeting earlier this month, we indicated that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. That is, in what the Committee judges to be the most likely scenarios for resource utilization and inflation in the medium term, the target for the federal funds rate would be held at its current low levels for at least two more years.

In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.

Economic Policy and Longer-Term Growth in the United States

The financial crisis and its aftermath have posed severe challenges around the globe, particularly in the advanced industrial economies. Thus far I have reviewed some of those challenges, offered some diagnoses for the slow economic recovery in the United States, and briefly discussed the policy response by the Federal Reserve. However, this conference is focused on longer-run economic growth, and appropriately so, given the fundamental importance of long-term growth rates in the determination of living standards. In that spirit, let me turn now to a brief discussion of the longer-run prospects for the U.S. economy and the role of economic policy in shaping those prospects.

Notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if–and I stress if–our country takes the necessary steps to secure that outcome. Over the medium term, housing activity will stabilize and begin to grow again, if for no other reason than that ongoing population growth and household formation will ultimately demand it. Good, proactive housing policies could help speed that process. Financial markets and institutions have already made considerable progress toward normalization, and I anticipate that the financial sector will continue to adapt to ongoing reforms while still performing its vital intermediation functions. Households will continue to strengthen their balance sheets, a process that will be sped up considerably if the recovery accelerates but that will move forward in any case. Businesses will continue to invest in new capital, adopt new technologies, and build on the productivity gains of the past several years. I have confidence that our European colleagues fully appreciate what is at stake in the difficult issues they are now confronting and that, over time, they will take all necessary and appropriate steps to address those issues effectively and comprehensively.

This economic healing will take a while, and there may be setbacks along the way. Moreover, we will need to remain alert to risks to the recovery, including financial risks. However, with one possible exception on which I will elaborate in a moment, the healing process should not leave major scars. Notwithstanding the trauma of the crisis and the recession, the U.S. economy remains the largest in the world, with a highly diverse mix of industries and a degree of international competitiveness that, if anything, has improved in recent years. Our economy retains its traditional advantages of a strong market orientation, a robust entrepreneurial culture, and flexible capital and labor markets. And our country remains a technological leader, with many of the world’s leading research universities and the highest spending on research and development of any nation.

Of course, the United States faces many growth challenges. Our population is aging, like those of many other advanced economies, and our society will have to adapt over time to an older workforce. Our K-12 educational system, despite considerable strengths, poorly serves a substantial portion of our population. The costs of health care in the United States are the highest in the world, without fully commensurate results in terms of health outcomes. But all of these long-term issues were well known before the crisis; efforts to address these problems have been ongoing, and these efforts will continue and, I hope, intensify.

The quality of economic policymaking in the United States will heavily influence the nation’s longer-term prospects. To allow the economy to grow at its full potential, policymakers must work to promote macroeconomic and financial stability; adopt effective tax, trade, and regulatory policies; foster the development of a skilled workforce; encourage productive investment, both private and public; and provide appropriate support for research and development and for the adoption of new technologies.

The Federal Reserve has a role in promoting the longer-term performance of the economy. Most importantly, monetary policy that ensures that inflation remains low and stable over time contributes to long-run macroeconomic and financial stability. Low and stable inflation improves the functioning of markets, making them more effective at allocating resources; and it allows households and businesses to plan for the future without having to be unduly concerned with unpredictable movements in the general level of prices. The Federal Reserve also fosters macroeconomic and financial stability in its role as a financial regulator, a monitor of overall financial stability, and a liquidity provider of last resort.

Normally, monetary or fiscal policies aimed primarily at promoting a faster pace of economic recovery in the near term would not be expected to significantly affect the longer-term performance of the economy. However, current circumstances may be an exception to that standard view–the exception to which I alluded earlier. Our economy is suffering today from an extraordinarily high level of long-term unemployment, with nearly half of the unemployed having been out of work for more than six months. Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well. In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow. In the longer term, minimizing the duration of unemployment supports a healthy economy by avoiding some of the erosion of skills and loss of attachment to the labor force that is often associated with long-term unemployment.

Notwithstanding this observation, which adds urgency to the need to achieve a cyclical recovery in employment, most of the economic policies that support robust economic growth in the long run are outside the province of the central bank. We have heard a great deal lately about federal fiscal policy in the United States, so I will close with some thoughts on that topic, focusing on the role of fiscal policy in promoting stability and growth.

To achieve economic and financial stability, U.S. fiscal policy must be placed on a sustainable path that ensures that debt relative to national income is at least stable or, preferably, declining over time. As I have emphasized on previous occasions, without significant policy changes, the finances of the federal government will inevitably spiral out of control, risking severe economic and financial damage.1 The increasing fiscal burden that will be associated with the aging of the population and the ongoing rise in the costs of health care make prompt and decisive action in this area all the more critical.

Although the issue of fiscal sustainability must urgently be addressed, fiscal policymakers should not, as a consequence, disregard the fragility of the current economic recovery. Fortunately, the two goals of achieving fiscal sustainability–which is the result of responsible policies set in place for the longer term–and avoiding the creation of fiscal headwinds for the current recovery are not incompatible. Acting now to put in place a credible plan for reducing future deficits over the longer term, while being attentive to the implications of fiscal choices for the recovery in the near term, can help serve both objectives.

Fiscal policymakers can also promote stronger economic performance through the design of tax policies and spending programs. To the fullest extent possible, our nation’s tax and spending policies should increase incentives to work and to save, encourage investments in the skills of our workforce, stimulate private capital formation, promote research and development, and provide necessary public infrastructure. We cannot expect our economy to grow its way out of our fiscal imbalances, but a more productive economy will ease the tradeoffs that we face.

Finally, and perhaps most challenging, the country would be well served by a better process for making fiscal decisions. The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses. Although details would have to be negotiated, fiscal policymakers could consider developing a more effective process that sets clear and transparent budget goals, together with budget mechanisms to establish the credibility of those goals. Of course, formal budget goals and mechanisms do not replace the need for fiscal policymakers to make the difficult choices that are needed to put the country’s fiscal house in order, which means that public understanding of and support for the goals of fiscal policy are crucial.

Economic policymakers face a range of difficult decisions, relating to both the short-run and long-run challenges we face. I have no doubt, however, that those challenges can be met, and that the fundamental strengths of our economy will ultimately reassert themselves. The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability.


1. See Ben S. Bernanke (2011), “Fiscal Sustainability,” speech delivered at the Annual Conference of the Committee for a Responsible Federal Budget, Washington, June 14.

Related Links:

Bernanke: Economy is Washington’s problem

Bernanke Offers No Plan for New Stimulus

Bernanke Gives No New Signs on Fed Move

 

 

The Hill – By Michael O’Brien

Texas Gov. Rick Perry (R) fired back Wednesday at President Obama, who admonished the Republican presidential candidate to watch his words more carefully.

Perry said “actions speak louder than words” after Obama’s public admonishment Tuesday on CNN for Perry’s comments that an expanded money supply by Federal Reserve Chairman Ben Bernanke would be “almost treasonous.”

“Yesterday the president said I needed to watch what I say,” Perry told a crowd in New Hampshire at a politics-and-eggs breakfast, which was broadcast online.

“I’d just like to respond, if I may: Mr. President, actions speak louder than words. My actions as governor are helping to create jobs in this country,” Perry said. “This president’s actions are killing jobs in this country.”…]

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. . . .

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. . . . (It) does it in a manner which not one man in a million is able to diagnose. . . .”   

John Maynard Keynes, “The Economic Consequences of the Peace – 1920

Bernanke Endorses Obama

There was a time when Fed chairmen feared to even seem political.

WSJ – OCTOBER 21, 2008

Ben Bernanke apparently wants four more years as Federal Reserve Chairman. At least that’s a reasonable conclusion after Mr. Bernanke all but submitted his job application to Barack Obama yesterday by endorsing the Democratic version of fiscal “stimulus.”

While the Fed chief said any stimulus should be “well targeted,” even a general endorsement amounts to a political green light. Mr. Bernanke certainly knows that Mr. Obama and Democrats on Capitol Hill are talking about some $300 billion in new “stimulus” spending, while President Bush and Republicans are resisting. And by saying any help should “limit longer-term effects” on the federal deficit, he had to know he was reinforcing Democratic opposition to permanent tax cuts.

Mr. Bernanke could have begged off — and would have been wiser to do so — given how much the Fed has already made itself a political lightning rod with its many Wall Street interventions. He might also have thought twice about endorsing one party’s policy preferences a mere two weeks before Election Day given his obligation to preserve the Fed’s independence. We can remember when tougher Fed chairmen used to refrain from adjusting interest rates close to an election for fear of seeming to be political; they would never have dreamed of meddling in campaign tax and spending debates.

Perhaps Mr. Bernanke’s blunderbuss political intrusion will win him more Democrat friends, and maybe even Mr. Obama’s goodwill. To the rest of the world, he has harmed the Fed and made himself less credible.

Embry: Perry takes a liking to Iowa

Longview News-Journal By Jason Embry

DES MOINES, Iowa — A man in a stars and stripes bandanna tricked Texas Gov. Rick Perry on Monday.

“Governor Perry, try a corn dog,” the Iowa State Fair vendor yelled as Perry and the horde with cameras surrounding him strode down the fair’s main thoroughfare. Having already passed up a couple of food vendors, Perry grabbed the corn dog, dipped it in mustard, took a bite and gratefully looked back.

’’It’s a veggie corn dog,” the vendor said.

Perry looked startled for a second but soon recovered. “As long as they make it on a farm,” he said.

The governor has been talking about farming quite a bit, and quite comfortably, in his first couple of days in Iowa, site of the country’s initial nominating contests. His background in agriculture — raised on a West Texas farm, eight years as state agriculture commissioner — is one reason he’ll be a major contender to win the Iowa caucuses in early 2012.

Religion is another.

’’Thank you for calling our nation to pray and fast,” Norma Johnson of Story County told Perry as she pulled him in for a hug. Johnson was wearing a red Michele Bachmann T-shirt but said she’d be re-evaluating all of the candidates with Perry’s entry.

Experts say more than half of Iowans who took part in the 2008 caucuses were religious conservatives.

Iowa is shaping up well for Perry, and his team likes his chances here.

Bachmann won the Ames Straw Poll on Saturday and hails from Waterloo, so it’s reasonable to call her the Iowa front-runner. Many Iowans say they like that she’s been so outspoken on national issues.

But Perry was clearly the more comfortable candidate Sunday night, when they both appeared in Waterloo. He arrived well before his speech and approached individual voters who had assembled for a Black Hawk County Republican Party dinner.

Bachmann, on the other hand, stayed in her campaign bus until well after her allotted speaking time (she didn’t enter the building until her second introduction) and stayed on stage afterward to sign autographs. Voters, in other words, had to approach her…

Related Previous Posts:

Armstrong Economics: Indirect vs Direct Stimulus

The Creature From Jekyll Island

It’s The Economy Stupid…

Public Sector Employment: The Gravy Train Robs Peter To Pay Paul

World Governance: Who Gave Them The Right To Take What I Have Earned?

Obama’s “Union” Trade War Has Started

Wealth Redistribution: Legal Plunder Or Just California Dreamin?

“Helicopter Ben” Bernanke: Keynesian Fine Tuning Or Intertemporal Misallocation?

The One World Currency Has Comith?

“The deal that was reached tonight is a disappointment for me and for millions of Americans who expected $100 billion in cuts, who wanted to make sure their tax dollars stopped flowing to the nation’s largest abortion provider, and who wanted us to defund ObamaCare,” Bachmann said in a statement.”

Paul voted against the short-term resolution that will give negotiators time to hash out the larger deal. “As I have said before,” he said in a statement, “there is not much of a difference between a $1.5 trillion deficit and a $1.6 trillion deficit – both will lead us to a debt crisis that we may not recover from.” Source:  Politico

It is the duty of every Republican Congressman to vote no on this terrible deal. It violates our campaign promises to the American people. We promised $100 billion of cuts and we delivered $38 billion ($62 billion on a twelve month basis). In the Republican House’s first real test out of the box it has broken the promise over which it was elected. Only in Meat Loaf’s music is “two out of three not bad.” Dick Morris

Government shutdown averted

Politico – By: David Rogers

The bottom line to Friday night’s spending deal is a record $40 billion cut in domestic and foreign aid appropriations – and a hard lesson in the tough and almost permanent disorder of Washington’s budget politics.

This weekend, the grind goes on with House and Senate Appropriations Committee clerks now doing the hard work of making the pieces actually fit in the new top line, just under $1.050 trillion. And having played hard-to-get, House Speaker John Boehner (R-Ohio) becomes the suitor, having to sell the deal to his young and restless Republican Conference before a floor vote next week.

Racing the clock in a long, dizzying long day of trading offers, Boehner and President Barack Obama only reached agreement hours before what would have been an unprecedented wartime shutdown of the government that threatened both men. Down to the end, Boehner was still pressing for a lower top line when Obama called him in the early evening. And the deal was only sealed in the midst of the speaker making his own presentation to fellow Republicans during a closed door party caucus.

Both men later cast the agreement as the best available, but the grueling, often distrustful process testified to how tough this legislative year will be and the immense pressure on Boehner from the right.

The administration largely succeeded in blocking the most controversial policy riders impacting the environment and abortion-rights. But the spending cut is one of the single largest in history, and a preview of what lies ahead when Republicans move their 2012 budget plan next week and fight with Obama over raising the debt ceiling in May and June.

“Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them,” Obama said. “And I certainly did that.”

“We didn’t do it at this late hour for drama,” said Senate Majority Leader Harry Reid (D-Nev.), the third major player in the talks, “We did it because it has been hard to arrive at this point.”…]

President Obama’s Statement on the Bipartisan Agreement on the Budget

White House Blog – Posted by Macon Phillips

REMARKS BY THE PRESIDENT ON THE BUDGET

11:04 P.M. EDT

THE PRESIDENT:  Good evening.  Behind me, through the window, you can see the Washington Monument, visited each year by hundreds of thousands from around the world.  The people who travel here come to learn about our history and to be inspired by the example of our democracy — a place where citizens of different backgrounds and beliefs can still come together as one nation.

Tomorrow, I’m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business.  And that’s because today Americans of different beliefs came together again.

In the final hours before our government would have been forced to shut down, leaders in both parties reached an agreement that will allow our small businesses to get the loans they need, our families to get the mortgages they applied for, and hundreds of thousands of Americans to show up at work and take home their paychecks on time, including our brave men and women in uniform.

This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history.  Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them.  And I certainly did that.

Some of the cuts we agreed to will be painful. Programs people rely on will be cut back.  Needed infrastructure projects will be delayed.  And I would not have made these cuts in better circumstances.

But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs — investments in our kids’ education and student loans; in clean energy and life-saving medical research.  We protected the investments we need to win the future.

At the same time, we also made sure that at the end of the day, this was a debate about spending cuts, not social issues like women’s health and the protection of our air and water.  These are important issues that deserve discussion, just not during a debate about our budget.

I want to think Speaker Boehner and Senator Reid for their leadership and their dedication during this process.  A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground.  Now the same cooperation will make possible the biggest annual spending cut in history, and it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead, from creating jobs and growing our economy to educating our children and reducing our deficit.  That’s what the American people expect us to do.  That’s why they sent us here.

A few days ago, I received a letter from a mother in Longmont, Colorado.  Over the year, her son’s eighth grade class saved up money and worked on projects so that next week they could take a class trip to Washington, D.C.  They even have an appointment to lay a wreath on the Tomb of the Unknown Soldier.

The mother wrote that for the last few days the kids in her son’s class had been worried and upset that they might have to cancel their trip because of a shutdown.  She asked those of us in Washington to get past our petty grievances and make things right.  And she said, “Remember, the future of this country is not for us.  It’s for our children.”

Today we acted on behalf of our children’s future.  And next week, when 50 eighth graders from Colorado arrive in our nation’s capital, I hope they get a chance to look up at the Washington Monument and feel the sense of pride and possibility that defines America — a land of many that has always found a way to move forward as one.

Thank you.

end – ;(

Computer pioneer Ken Olsen dies

Globe – By Bryan Marquard and Hiawatha Bray

Ken Olsen, who cofounded Digital Equipment Corp. and built it into the second-largest computer company in the nation by creating small but powerful machines called minicomputers, died Sunday.

He was 84, and his death was announced by Gordon College in Wenham, for which Mr. Olsen was a longtime trustee and benefactor. The college did not provide a cause of death or information about where Mr. Olsen was living.

Mr. Olsen launched Digital in 1957 in a defunct woolen mill in Maynard with $70,000 in venture capital. For a time, Mr. Olsen, his partner, Harlan Anderson, and his brother Stanley Olsen were the company’s only employees. With innovation after innovation, Mr. Olsen and Digital helped create the computer industry. At one point, the company was valued at about $14 billion.

In the 1960s, Digital pioneered a smaller, less- expensive alternative to the hulking mainframes that dominated the industry.

Mainframes were usually run by specially-trained operators and were off-limits to everyone else. Users stood in line, handed over their computing tasks, then waited for minutes or hours for the results.

But the minicomputers developed by Digital were so inexpensive that companies could buy several for scientists, engineers, or business managers, then let the workers use the computers themselves.

Digital and Wang Laboratories, along with their spinoffs, were widely credited with playing a large role in the Massachusetts Miracle, the period of economic growth in the 1980s.

Even when his own net worth was measured in the hundreds of millions, Mr. Olsen looked more like an engineer than an entrepreneur, favoring thick-soled work boots and preferring to drive a 1963 Ford Falcon because he admired its design and found it easy to maintain.

Under his leadership, Digital endured financial ups and downs. But after the company surged in the mid-1980s, Fortune magazine ran a cover story on Mr. Olsen, calling him “arguably the most successful entrepreneur in the history of American business.’’

Adjusting for inflation, Fortune said, Digital was bigger than Ford Motor Co. at the death of its founder, Henry Ford, and also larger than US Steel when Andrew Carnegie sold his company or Standard Oil when John D. Rockefeller stepped aside.

Digital was second to IBM in the computer industry, though it was less than one-sixth of IBM’s size.

Kenneth Harry Olsen was born in Bridgeport, Conn., and grew up in the suburb of Stratford. His father held patents and designed equipment such as a safety-pin machine and one that made universal joints for cars.

Mechanical even as a child, Mr. Olsen read technical manuals, rather than comic books. He began studying electrical engineering in the US Navy, which he joined in 1944, and continued his studies at the Massachusetts Institute of Technology. At MIT, he received a bachelor’s degree in 1950 and a master’s two years later, in electrical engineering.

Afterward, he worked at Lincoln Laboratory until deciding to start his own company in 1957, getting seed money from the early venture capital firm American Research and Development Corp. The financial backers did not want the word computer in the company’s name, and Mr. Olsen settled on Digital Equipment Corp., or DEC.

The company had sales of $94,000 in its first year. By 1977, when sales topped $1 billion, Digital had 36,000 employees.

In 1986, a Wall Street Journal reporter interviewed Mr. Olsen in his office in the building that formerly housed a woolen mill and dated to the mid-1800s. One wall was given over to his collection of old computer parts. “They’re artifacts, like dinosaur bones,’’ he said…

Kenneth H. Olsen, Digital Computing Pioneer, Entrepreneur and Gordon Board Member, Remembered

WENHAM, MA—Widely recognized as one of the 20th century’s leading computer industry pioneers, Mr. Kenneth H. Olsen, founder and former CEO of Digital Equipment Corporation (DEC), long time trustee at Gordon College in Wenham, Massachusetts, and alumnus of the Massachusetts Institute of Technology (MIT), died Sunday, February 6, 2011. He would have been 85 years old on February 20.

In 2008, the Ken Olsen Science Center was dedicated at Gordon College during which time Olsen’s archives were given to the College.

“An inventor, scientist, and entrepreneur, Ken Olsen is one of the true pioneers of the computing industry,” said Bill Gates, founder and chairman of Microsoft, in a letter to Gordon College. “He was also a major influence in my life and his influence is still important at Microsoft through all the engineers who trained at Digital and have come here to make great software products.”

Born in Bridgeport, Connecticut, Olsen developed a love and curiosity for electronics at a young age. After an enlistment in the Navy during World War II, he attended MIT for both undergraduate and graduate degrees. While at MIT, he worked on a team that developed air defense technology and core memory, the precursor to today’s RAM. He married Aulikki Valve in Finland on December 12, 1950.

In 1957, he co-founded DEC in a refurbished mill in Maynard just outside of Boston, a company that grew to over 125,000 employees in 86 countries. Countless CEOs, engineers and inventors recognize Olsen’s technological innovations, leadership style and entrepreneurial philosophies as the foundation for today’s information and computer networking industry.

“Ken Olsen was a pioneer of the computer age, but beyond that, he was a good man. He was a major philanthropist who did his giving quietly, never seeking recognition or thanks. Ken’s many contributions to business, leadership and technological innovations were unmatched,” said Tom Phillips, former chairman of Raytheon and fellow board member at Gordon College since 1970. “He cared deeply about his family, his faith and of course, his work, and sincerely expected that each would help make the world better. That was his legacy and I’m proud to have called him friend.”

Under Olsen’s 35-year leadership tenure, DEC pioneered the concepts behind interactive computing. Creating one of the first digital computers for commercial use, DEC marketed the “mini-computer” and set records in size and affordability. The company also set industry standards in program languages, operating systems, networking architectures, applications software, computer peripherals, component and circuit technology, manufacturing processes and business practices.

In 1986 Fortune Magazine named him the “most successful entrepreneur in the history of American business.” He was also inducted into multiple halls of fame including the National Inventor’s Hall of Fame (1990) and the Computer History Museum (1996). He served on the boards of several prestigious organizations including the Computer Science and Engineering Board of the National Academy of Sciences, Washington, D.C.; and as a member of the President’s Science Advisory Committee. He was awarded the National Medal of Technology in 1993.

Olsen had a particular fondness for Christian higher education. As an active member of Park Street Church in Boston, Olsen joined the board of Gordon College in 1961, along with fellow trustees Phillips and evangelist Billy Graham. Olsen admired Gordon’s openness to scientific inquiry and commitment to the Christian faith, and provided both spiritual and business input for the next 50 years. He supported numerous capital and building projects in all areas of academics, athletics, music and the arts, and moved the College towards greater efficiency in technology by donating his time, expertise, and company equipment.

In his early leadership at DEC, Olsen often visited Gordon’s campus to meet informally with science students or professors about specific developments in computing. Sometimes he would drop off his latest prototype for Gordon scientists and challenge them to “play around with this in the lab and let me know what you think.” Because of his involvement, Gordon was a natural recipient for his archives.

“Ken Olsen made a lasting impact on generations of science students at Gordon College. He took his leadership role seriously, not just attending meetings but also helping to design new computer labs, giving of his own resources for the College to meet its financial goals, and asking the tough questions that a growing institution needed to answer,” said Gordon College President R. Judson Carlberg. “Ken never saw a conflict between his Christian commitment and his embrace of scientific methods. It was up to us to understand how science and the Bible were two expressions of God’s creativity; and we are still pursuing that task.”

Through all of his accomplishments, Olsen’s family and friends defined him by his humble commitment to loving God, loving excellence and loving others. His character in and out of the workplace reflected his life-long belief that values, business ethics, and scientific inquiry should coincide with faith in God.

“Science is more than a study of molecules and calculations; it is the love of knowledge and the continued search for the truth,” Olsen once wrote. “The study of the sciences promotes humility, leaving us with a clear sense that we will never understand all there is to know. At the same time, science provides a defense for truth, authenticates Christianity and stems from the nature of God.”

A public memorial service will be held at Gordon College (255 Grapevine Road, Wenham, MA, Exit 17 from Route 128) on Saturday, May 14, 2011, at 2 p.m., and a documentary of Ken Olsen is scheduled for release by the College later in 2011. Friends and former colleagues are encouraged to leave a memory about Olsen.

Reboot: 7 7 7 7 6 (3 up, 3 up, 3 up, 3 up, first 2 up)…

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Aulikki Olsen, wife of DEC co-founder Ken Olsen, dies at 84

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