The Economy’s Secret Success in 2013 – ByDaniel Gross 12.31.13

Photo by Richard Drew/AP

In 2013, the U.S. economy managed not just to survive a series of shocks—the fiscal cliff, the sequester, tax increases, the government shutdown, the advent of the Affordable Care Act—but to power through them. As we speak, the U.S. is closing out its 54th month of growth, and the headline growth numbers are as good as they’ve been in years. The stock market is at a record high.

This confluence of events remains something of a mystery. The U.S. is a consumer-driven economy, but consumer confidence remains at recessionary levels and wages have hardly budged. Companies are hoarding cash. The Federal Reserve has continued to support the economy with unprecedented levels of bond-buying but with diminishing returns. And government continues to weigh on the economy.

There is one overlooked factor that can help explain the comparative buoyancy of the U.S. economy: the decline of financial failure.

Financial failure comes in many forms: the shuttering of banks, defaults on mortgages, credit-card charge-offs, corporate and personal bankruptcies, and mass lay-offs. Each is damaging as an event on its own. But, like rocks tossed into lakes, their impacts cause larger ripples. Because the American financial system piles debt upon debt, one small financial failure can lead to a larger number of financial failures. Because humans are, well, human, they tend to react to failures around them by becoming more financially conservative—even if their own livelihood isn’t in danger. Put another way, failure is pro—cylical—a company going bankrupt fires a worker, who defaults on a mortgage, which causes a sharp decline in value on a mortgage-backed security, which can help push a bank toward insolvency. And that’s part of the reason the recession of 2008-2009 was so deep and harsh. Failure begot failure.

But the forces work in the other direction. For the reasons cited above, success (or a mere decline in failure) can lead to further success (or further declines in financial failure.) And to a large degree, this was the story of 2013.

Fewer companies failed this year than in previous years. Corporate bankruptcies in the third quarter of 2013 (PDF), at 8,119, were down 12.2 percent from the third quarter of 2012. In fiscal year 2013, which ended in September, corporate filings were down 17 percent from the year before—and down 42 percent from fiscal 2009. Yes, companies continue to restructure, revamp, and rightsize, often in very public ways. Through the first 11 months, large companies publicly announced478,428 job cuts, according to Challenger, Gray & Christmas. But that’s down 2.5 percent from the first 11 months of 2012. Overall, there was generally a lot less firing in 2013 than in 2012. As a result, the weekly pace of first-time unemployment claims declined over the course of the year. In the second half of 2013, on a seasonally adjusted basis, about 330,000 Americans experienced the trauma and psychological blow of filing for unemployment benefits each week. In the second half of 2012, about 380,000 Americans did so.

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US announces six drone test sites – BBC News 30 December 2013 Last updated at 15:20 ET

DIY drones: Enthusiasts making their own aircraft

The US aviation regulator has announced the six states that will host sites for testing commercial use of drones.

The Federal Aviation Administration (FAA) picked Alaska, Nevada, New York, North Dakota, Texas and Virginia.

The sites are part of a programme to develop safety and operational rules for drones by the end of 2015.

Hitherto mainly used by the military, the potential of drones is now being explored by everyone from real estate agents to farmers or delivery services.

The head of the FAA, Michael Huerta, said safety would be the priority as it considers approval for unleashing the unmanned aircraft into US skies.

Pilots will be notified through routine announcements about where drones are being flown.

The FAA said in a statement that its decision followed a 10-month process involving proposals from 24 states.

The agency said it had considered geography, climate, location of ground infrastructure, research needs, airspace use, aviation experience and risk.

The sites chosen are:

  • A set of locations proposed by the University of Alaska in seven zones with varying climates, from Hawaii to Oregon
  • Griffiss International Airport in central New York state will test how to integrate drones into the congested north-east airspace
  • North Dakota Department of Commerce will test the human impact of drones and also how the aircraft cope in temperate climates
  • The state of Nevada will concentrate on standards for air traffic and drone operators
  • Texas A&M University plans to develop safety requirements for drones and testing for airworthiness
  • Virginia Tech university will research operational and technical areas of risk for drones

The biggest chunk of the growth in the commercial drone industry is currently expected to be for agriculture and law enforcement.

In death, as in life, one size doesn’t fit all – by Jamie Tarabay December 30, 2013 5:00AM ET

Screen Shot 2013-12-31 at Dec 31, 2013 5.54

A casket in the workshop of Goliath Caskets, an Indiana company that specializes in providing coffins for the growing number of obese Americans. This 52-inch model, one of the company’s larger designs, awaits a liner and other final touches.Hollis Bennett for Al Jazeera America

“We need to quit hiding it and thinking, ‘Oh, well, they’re just larger than life,'” says Keith Davis, slightly out of breath. “If I hear that one more time, I think I’m going to scream.”

Davis is puffing a little because as we’re speaking, he’s loading one of the specialized caskets he manufactures onto a truck to begin its journey from his town of Lynn, Ind., to another state and, eventually, a funeral home.

But Davis’ caskets are different from those most Americans are placed in after they die. The one he’s wheeling onto the truck is 37 inches wide; the average casket width is about 26 inches. Davis and his company, Goliath Caskets, make some of the largest caskets in the country for some of the largest Americans, who are simply too big to fit into the ones most people use.

The New Year usually brings with it resolutions to tackle weight gain. Gym memberships spike in January as more people vow to get fit and drop pounds.

Responses to the obesity epidemic often deal with the issues facing those living with the disease: how to combat it, medicate it or prevent future generations from suffering from it.

Companies everywhere are adapting products and services to accommodate the widening of girths and the steady climb in the numbers on scales. Movie-theater seats are wider. Car seats are broader; some even have rearview cameras for drivers too big to turn around when they drive in reverse. Revolving doors are roomier. Amtrak is adjusting its dining-car seats. Hospitals have surgery tables that can support heavier patients.

Yet one of the most overlooked aspects of obesity is what happens after we die.

Caskets and the many other aspects of a funeral that come into focus after death are often the last things people think of, says Davis.

“Stuff you would never, never think about suddenly become gigantic obstacles,” he says. “Who would ever have thought you’d have to have two grave sites or have a backhoe come in and lower the casket into the grave?”


‘A noticeable trend’


Bob Arrington has been in and around funeral services since he was 7 years old, growing up in Milan, Tenn.

“My elementary school was across the road from the funeral home my neighbor worked at,” he recalls. “I used to go across the road and wait for my neighbor to drive me home at the end of the day.”

By the time he was 9, he was helping out — opening the front door, handing out flowers, spending the long summer months there. Now 57, he heads a funeral directors’ association in Jackson, Tenn., and is the treasurer of the National Funeral Directors Association.

He says he began to see changes in the size of caskets about seven years ago.

“You go to a casket convention, you used to have one or two choices. Now they have a whole line of choices because it’s becoming more requested,” he says. “It’s a noticeable trend.”

“They’re making more room on the inside,” he says of average-width caskets, which can range from 26 to 30 inches. “The casket manufacturers are realizing that this is an issue, and they’re starting to make changes.”

Most of the standard caskets have room to accommodate people who are slightly wider or heavier than average. They’re usually filled with extra padding to fit most people.

When someone is simply too big for that accommodation, specially made oversize caskets come in.

The larger caskets are “among the fastest growing of the different categories of products,” says Teresa Gyulafia of Batesville Casket Co., one of the largest manufacturers of caskets in the country.

And, she says, the demand varies by geography too.

“There are parts of the U.S. — states that have higher-than-average demand for oversize products,” she says.

The spread of obesity across the country and now across the world has reached epidemic proportions. The Centers for Disease Control and Prevention reports that in the U.S., approximately 1 in 3 adults is obese, as well as 1 in 6 children. It is a major cause of death, a consequence of heart disease, cancer and diabetes.

The World Health Organization reports that obesity, “once considered a problem only in high-income countries,” is now increasingly an issue in low- and middle-income countries, particularly in Africa and Central and South America.

Causes for the rise in obesity range from a change in lifestyle for many in developed countries — from labor intensive to largely sedentary — to the availability and higher cost of fresh, natural food compared with easily accessible, cheaper fast and processed food.

The statistics in this country have raised so much concern that First Lady Michelle Obama has taken the helm of a White House initiative to spotlight obesity and, as she says on the Let’s Move campaign’s website, “change the way a generation of kids think about food and nutrition.”


Eating into an early grave


If anyone can do a snap survey of the fluctuating fortunes of overweight Americans, it’s Keith Davis. From the casket-manufacturing business he inherited from his father, he has a pretty good sense of how widespread the obesity problem is and how young those who die of obesity-related complications can be.

“We have a generation of people now, especially the younger ones in their 30s, who are going to die before their parents because of obesity,” he says. “As I travel around and deliver these caskets, the average age of these people is 40, 45 years old. And many of them are younger than that.

“I’ve delivered to people who are 25 years old, and it’s not because they died on a football field. They were just so big, their hearts gave out or their kidneys gave out,” he says. “We’re eating ourselves into an early grave, one shovelful at a time.”

Winter Olympics inflame political and social tensions in Russia by Alice Speri December 31, 2013 5:00AM ET

Moscow’s aim to deliver ‘the safest games ever’ exacerbating troubles in the North Caucasus and rousing nationalism Sochi flame

To many, the Kremlin seems to be more focused on protecting the venues — and its reputation — than addressing the country’s social and political tensions.
Kirill Kudryavetsev/AFP/Getty

MOSCOW — With a 60-mile-long security zone, extensive identity checks, drones and Cossacks patrolling the streets around Sochi, the Russian government is determined to deliver on its promise that the Winter Olympics, opening in the Black Sea city in February, will be “the safest games ever,” according to Dmitry Chernyshenko, president of the Sochi organizing committee.

But securing Sochi, which sits in the southern Krasnodar region next to the most active insurgency in Europe, is only possible through a monumental deployment of force that has already impacted the North Caucasus, where conflict with ethnic and religious minorities has flared for years.

This week, two bomb attacks in two days — on a bus and at a railway station — rocked the city of Volgograd, 420 miles northeast of Sochi, killing more than 30 people and injuring more than a hundred. While no group has claimed responsibility for the bombings, authorities believe them to be related and a warning sign as the games approach.

Moscow has geared up for the Olympics by running a repressive campaign in parts of the Caucasus region, particularly in Dagestan, leaving many to fear an escalation in the aftermath of the games.

“The perception of people on the ground is that they are waiting until the Olympics are over and then they’ll completely unleash some kind of a horrible campaign against everyone who is even remotely suspected of anything,” said Valeriy Dzutsev, a scholar of the region, who said the technology and manpower displayed at Sochi are there to stay.

Preparations for Sochi, where foreign laborers worked on most Olympic construction, also highlighted a separate set of problems: Russia’s treatment of immigrants and recent surges in nationalism and xenophobia.

While the issues differ in context and scale, the government has used similar tactics — including raids and arrests — to deal with both Russian minorities in the North Caucasus and foreigners.

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10 best political feuds of 2013 – By LUCY MCCALMONT | 12/30/13 2:58 PM EST Updated: 12/30/13 5:04 PM EST

(From left) Sean Hannity, Larry Klayman, Donald Trump and Bill O'Reilly are pictured in a composite image. | AP Photos

There were many high-profile feuds on television in 2013.


It was an epic year when it came to high-profile feuds. Whether it was politicians versus TV hosts over Obamacare, or journalists going after one another over scoops, everyone was duking it out on the airwaves in 2013 in front of viewers who hopefully had some popcorn close by. In case you missed any, POLITICO has rounded up the must-see rumbles of the year.

1. Larry Klayman vs. CNN

Following his court victory in December challenging NSA surveillance, conservative legal activist Larry Klayman appeared on CNN’s “Erin Burnett: OutFront,” but from the start argued with guest host Don Lemon and legal analyst Jeffrey Toobin. Klayman immediately attacked Lemon for supporting President Barack Obama, calling the host an “ultra-leftist,” drawing protests from Lemon. Toobin tagged Klayman as a “lunatic” and said his court case was based on “tin-foil hat paranoia.”

Lemon and Klayman went back and forth until Lemon asked producers to cut Klayman from the screen, which led Klayman to hit back at the host, saying “you’re a charter member of the ACLU, you believe in free speech, right?” Lemon brought Klayman back on the air to give him the last word. That’s when Klayman ripped into the two men, comparing them to the recently resigned Martin Bashir of MSNBC.

(PHOTOS: Best quotes of the year)

“Let anybody watch this and see that CNN removes you from the screen when it doesn’t like what you think,” Klayman said, adding, “You have not acted in a respectful way, and it’s, in fact, disgraceful.”

2. Lawrence O’Donnell vs. Anthony Weiner

It’s fair to say when failed New York mayoral candidate and disgraced former Democrat Rep. Anthony Weiner appeared on MSNBC’s “Lawrence O’Donnell” show ahead of the primary in September, he wasn’t expecting a dressing down. But that’s exactly what he got from O’Donnell, who kicked off the segment by bluntly asking Weiner, “What is wrong with you?”

“What I find strange about your campaign is what seems to be your absolute desperate need for elective office and what seems to be your inability to live outside of it,” O’Donnell said, adding, “You are being driven by some kind of demons.”

(PHOTOS: 8 times Weiner lied about lewd pics)

“Dude, I don’t really need your psychiatric questions,” Weiner shot back.

3. Chris Cuomo vs. Rep. Darrell Issa

The blame game of the government shutdown engulfed much of Washington for a time in the fall. And CNN’s Chris Cuomo pointed an accusing finger at the Republicans and Rep. Darrell Issa when the California lawmaker appeared on “New Day” in October.

“No, Chris, I’m not going to let you have a pass on that,” Issa responded to Cuomo’s claim that the GOP shut down the government.

Cuomo, the younger brother of Democratic New York Gov. Andrew Cuomo, responded, “You’re not letting me have a pass? You just said a shutdown isn’t worth it, but you shut down the government.”

(QUIZ: How well do you know Darrell Issa?)

Issa struck back, “Well, you can’t accuse me of beating my wife and then turn around and tell me, isn’t that true?”

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It’s Time to Close New York’s School-to-Prison Pipeline – Mychal Denzel Smith December 26, 2013

Students raise hands during a Global Studies class at Bedford Academy High School on Tuesday, December 3, 2013, in New York. (AP Photo/Bebeto Matthews)

Incoming New York City Mayor Bill de Blasio does not lack for issues demanding his immediate attention. Among them are the historic levels of income inequality and homelessness, as well as the matter of a militarized police force and its abuse of power, particularly with regard to communities of color. So he certainly has his work cut out for him. But if he wishes to address many of these urgent issues at the same time while also tackling something of great importance in its own right, a major priority for his administration should be closing the school-to-prison pipeline—the name given to a set of regressive, “zero tolerance” policies that frequently end up pushing students into the criminal justice system instead of through school.

In May of last year, the New York Times editorial board described the situation as follows: “School officials across the country responded to a surge in juvenile crime during the 1980s and the Columbine High School shootings a decade later by tightening disciplinary policies and increasing the number of police patrolling public schools. One unfortunate result has been the creation of a repressive environment in which young people are suspended, expelled or even arrested over minor misbehaviors—like talking back or disrupting class—that would once have been handled by the principal.”

In fact, the results of these policies are more than just “unfortunate”; they’re racist. The stats bear this out. As Molly Knefel reported in Rolling Stone, half of the New York City students suspended during Mayor Michael Bloomberg’s tenure were black, even though black students made up around one-third of the student population. And this is on top of the overpolicing they face in their daily lives, namely as a result of the controversial practice of stop-and-frisk.

In the same article, Donna Lieberman, executive director of the New York Civil Liberties Union (NYCLU), noted that students living in neighborhoods with high rates of stop-and-frisk are also more likely to be suspended than their peers from neighborhoods with lower rates.

The result, according to the NYCLU, is that kids with criminal records consisting mostly of minor infractions that could have been resolved in school face further discrimination when applying for college, scholarships and jobs. This can also have an effect on whether their families are eligible to live in public housing, since people with criminal records are barred from many government assistance programs. And this doesn’t even take into account the psychological toll that coming into contact with the criminal justice system can have on students who are still wading through the thickets of childhood development. Whether in school or out, these children are being subjected to state use of a police force to address social issues that governments have failed to tackle. This practice is ruining lives, mostly of black children, before they even get a chance to start.

In order to begin closing the school-to-prison pipeline, the NYCLU report provides solutions, starting with investing more money in education than in the correctional system—but also using methods such as peer mediation, guidance counseling and mentoring in order to reduce conflicts. The report suggests allowing “students to have a role in designing school discipline codes,” the rationale being that when students understand the rules, they are more likely to comport themselves according to those rules.

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New York could follow the example set in Meridian, Mississippi, where in March of last year the Department of Justice and the Meridian Public School District agreed to what was called a “landmark consent decree.” The result of a two-year investigation by the DOJ, the consent decree was aimed at ensuring that Meridian, which is notorious for its excessive punishment of minor infractions, “administers student discipline in a fair and non-discriminatory manner, reduces the disproportionate assignment of exclusionary sanctions to black students, and provides all students with an equal opportunity to learn in a safe, orderly, and supportive environment.” It’s a fantastic start to reducing the amount 
of interaction children have 
with the criminal justice system and moving toward educating 
them instead.

De Blasio understands that New York helps to set a precedent for policy across the nation. By closing the school-to-prison pipeline and recommitting the city to educating its young people rather than policing them, he could send a message that America’s youth deserves better. And he could help stem the tide of fear-based policy-making that does more harm than good to our children’s future.

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9 questions about South Sudan you were too embarrassed to ask – BY MAX FISHER December 30 at 3:36 pm

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South Sudan’s crisis began just two weeks ago, on Dec. 15, and it already has observers warning that it could lead to civil war. Fighting has killed an estimated 1,000 people and sent 121,600 fleeing from their homes. International peacekeepers are preparing for the worst; some have been killed and a number of them, including four U.S. troops, have been injured.

What’s happening in South Sudan is complicated and can be difficult to follow; understanding how it got to be this way can be even tougher. Here, then, are the most basic answers to your most basic questions. First, a disclaimer: This is not an exhaustive or definitive account of South Sudan and its history — just some background, written so that anyone can understand it.

1. What is South Sudan?

South Sudan is the world’s newest country. It’s located in Central Africa, is about the size of Texas and has about as many people as Ohio (11 million). South Sudan is one of the poorest countries in the world, has a 27 percent literacy rate and is so underdeveloped that it has only about 35 miles of paved road. Its economy is driven by oil exports.

South Sudan declared independence from the rest of Sudan on July 9, 2011. At the time, it was considered a huge success for the world. But its 2½ years as a sovereign state have been disastrous. This latest crisis is just another part of the country’s struggle to stand on its own.

2. Why are people in South Sudan killing each other?

The violence started on Dec. 15, when troops in the presidential guard started fighting against one another, in what is a depressingly accurate metaphor for South Sudan’s problems. That fighting quickly spread and is now engulfing entire swaths of the country.

If that seems like a strange way for a potential civil war to start, it will make more sense once you hear the backstory. In July, the president of South Sudan, Salva Kiir, fired his vice president, Riek Machar. The two were more rivals than partners; Kiir thought that Machar was gunning for his job. Here’s the really important thing: Kiir and Machar are from different ethnic groups, and in South Sudan ethnic groups are really important. Kiir is ethnic Dinka, the largest of South Sudan’s many ethnic groups. Machar is Nuer, the country’s second-largest group.

Tension between the Dinka and the Nuer goes way back in South Sudan, and the political rivalry between the groups’ two most powerful members, Kiir and Machar, always had the potential to become an ethnic conflict. It did on Dec. 15, when members of the presidential guard who are Dinka tried to disarm members of the guard who are Nuer, maybe because they feared the Nuer would try to stage a coup. (Kiir later said the fighting had started because Machar had tried to stage a coup, although evidence for this is thin.)

The fighting between Dinka and Nuer presidential guards very quickly spread across the country. The main antagonists are rebels, often ethnic Nuer, including a group called the White Army. (Some reports say the group got its name because fighters smeared themselves with white ash to protect themselves from insects.) The rebels have seized territory, including some oil-producing land, and may or may not be marching on the city of Bor.

Read the rest of the list here: