New York Times Editorial: Great Lakes Rescue
Copyright by The New York Times
Published: August 31, 2009
http://www.nytimes.com/2009/09/01/opinion/01tue3.html?th&emc=th
Barack Obama, of Illinois, is the first president since Michigan’s Gerald Ford to come from a heartland state that depends heavily on the Great Lakes for its economic well-being. Hopes have thus been raised that the Great Lakes will at last get the help they need.
The Clean Water Act of 1972 did much to stop direct discharges from industries and municipal sewage systems. But the lakes still suffer — from lingering industrial pollution, toxics like mercury, deteriorating wetlands and, more recently, invasive species that have devastated the fishing industry and fouled shorelines.
In response, the Environmental Protection Agency will soon roll out recovery programs known collectively as the Great Lakes Restoration Initiative. In June, the House gave the program the entire $475 million the White House wanted. The Senate should do likewise.
This is a small down payment on a project that could ultimately cost $20 billion. But it is an important start that will be administered by one agency, the E.P.A., in an effort to avoid the scattershot funding that undermined earlier restoration efforts.
Many of the tasks that lie ahead are easily identified, and some are “shovel-ready,” awaiting only an infusion of federal energy and money. But nobody has found the answer to what has become the lakes’ biggest and most complex enemy — the invasive species.
The worst is the quagga mussel, a fingernail-sized shellfish that made its way to the lakes on an ocean freighter. First documented in Lake Erie in 1989, these tiny creatures now carpet the lake floor and filter out the tiny organisms at the bottom of the food chain with such efficiency that there is little left for bigger fish. Species vital to local economies — like salmon and whitefish — are disappearing. Recreational fishing in Lake Huron has nearly collapsed. Lake Michigan could be next.
The hope is that a truce of sorts can someday be reached between native species and the exotics. But that will not happen unless new invasions stop — which will require sterilizing the ballast of overseas freighters or, possibly, closing the lakes to foreign shipping.
That would be a radical step, but not irrational. It seems increasingly clear that the economic damage from exotic species outweighs the benefits of allowing polluting ocean ships into the Great Lakes.
Tuesday, September 1, 2009
Iran News Agency Reports Prisoner Died of Abuse
Iran News Agency Reports Prisoner Died of Abuse
By MICHAEL SLACKMAN
Copyright by The New York Times
Published: August 31, 2009
http://www.nytimes.com/2009/09/01/world/middleeast/01iran.html?th&emc=th
CAIRO — In what may be the first admission that a prisoner died from abuse by Iranian prison authorities in the wake of post-election unrest, a semiofficial news service reported Monday that the son of an adviser to a prominent conservative politician had died of “physical stress, conditions of imprisonment, repeated blows and harsh physical treatment.”
The report, by the Mehr News Agency, quoted “informed sources” as saying the medical examiner had determined that Mohsen Ruholamini, 25, died of abuse and neglect after being held in the Kahrizak detention center and then being transferred to Evin prison under “unsuitable conditions.” He was one of hundreds of people arrested as mass protests swept major Iranian cities after President Mahmoud Ahmadinejad claimed a landslide victory in June, and one of dozens who died.
“As a result of his poor physical condition, at the end of the journey, and after a delay of 70 minutes in transferring him to hospital, he unfortunately died,” said the report by Mehr, which has close ties to conservatives.
The apparent admission of abuse appears to fit squarely with the recent strategy of Ayatollah Ali Khamenei, the supreme leader, of trying to calm the political crisis that has not let up, and to restore some of his lost credibility, political analysts said.
As a religious and civil leader, he is supposed to be seen as above the political fray and as the embodiment of justice, qualities that analysts and reform supporters say were badly compromised when he sided with the president during the crisis.
The admission — if it is made official and leads to punishment — could also shore up the supreme leader’s support among senior clerics and pragmatic conservative politicians who are upset about the treatment of prisoners, President Ahmadinejad’s attempts to consolidate power and the ayatollah’s handling of the post-election crisis. Mr. Ruholamini’s case helped galvanize their anger.
Mr. Ruholamini’s father, Abdolhossein, was a senior political adviser to Mohsen Rezai, a defeated presidential candidate and former commander of the powerful Revolutionary Guards.
Authorities told the elder Mr. Ruholamini on Aug. 9 that his son had died of meningitis. But Mr. Ruholamini, who leads a prestigious scientific center in Tehran, later said that he had found his son’s bloodied and bruised body in a morgue.
On Sunday, one day before the report was released by Mehr, Mr. Ruholamini met privately with Ayatollah Khamenei, where he was assured that those responsible would be held accountable, even if they were part of the system, according to Iranian news services.
If the Mehr report is officially confirmed, it could pave the way for the arrest and conviction of government agents — perhaps even relatively high-ranking prison officials, a step that might be necessary to restore confidence among senior clerics and pragmatic conservatives, political analysts said.
“The supreme leader got what he wants — Ahmadinejad is president now — but he will not allow this conflict to deepen and continue,” said Mustafa Alani, director of security and defense studies at the Gulf Research Center in the United Arab Emirates. “He sees the bad side of this crisis and wants to start a new page.”
When the government tried to silence the post-election conflict through arrests, trials and intimidation, the crisis grew more heated amid a steady stream of charges, including that male and female prisoners had been raped and sodomized, that bodies had been buried in secret graves and that bruised and contorted corpses were being turned over to families.
Leaders of the reform movement said that at least 69 people had been killed during the post-election crackdown, while the government reported that 30 had died.
The president and his allies in the police force, prison system and military have consistently denied all charges of abuse, and they repeated those denials this week.
However, Ayatollah Khamenei ordered the closing of the Kahrizak prison, where several prisoners died, and authorities ordered an investigation into the deaths there.
But with the political crisis not subsiding, and the credibility of the Islamic republic’s system of governance questioned by the general public and the clerical elite, Parliament has begun two investigations into charges of prisoner abuse, and the supreme leader has shifted course, political analysts said.
In what analysts call an attempt to calm the concerns of his more pragmatic conservative allies and senior clerics, Ayatollah Khamenei recently said he did not believe that the opposition had been conspiring with foreign enemies, undercutting the most serious charges against former officials, journalists and academics that have been leveled by Mr. Ahmadinejad and his government.
And in another sign of efforts to soften the edges of the crackdown directed by the president, the judiciary — headed by a rival of Mr. Ahmadinejad — on Monday released Hamzeh Ghalebi, according to Parleman News, a Web site affiliated with conservative members of Parliament who are critical of the president. Mr. Ghalebi, a prominent member of the Islamic Iran Participation Front, has been very close to Mir Hussein Moussavi, a reform leader and presidential candidate.
Mr. Ghalebi’s health had deteriorated after almost 60 days in solitary confinement, and like others he had been forced to confess, according to a Web site affiliated with Mr. Moussavi.
Another element of Ayatollah Khamenei’s shift in tone was spelled out Wednesday in a meeting with university students, when he vowed that torture and abuse would not go unpunished.
“Be sure that no crime or atrocity will go unpunished, but with issues of that importance the judiciary should rule based on solid evidence,” the supreme leader said, insisting that rumors would not be enough.
But Ayatollah Khamenei was also clear about where he placed the greatest blame for what had convulsed the country since the presidential election, and it was not with the issue of torture or abuse.
“Some people — who tend to turn a blind eye to the oppression of the people, the Islamic establishment and the tarnished reputation of the establishment — seem to portray the Kahrizak issue as the main problem, whereas this on its own is another form of oppression against the nation,” he said.
The bigger problem, he maintained, was the post-election unrest, which he said had tarnished an otherwise valid election — a point millions of Iranians disputed when they took to the streets in protests that were later crushed by the police and armed militias.
By MICHAEL SLACKMAN
Copyright by The New York Times
Published: August 31, 2009
http://www.nytimes.com/2009/09/01/world/middleeast/01iran.html?th&emc=th
CAIRO — In what may be the first admission that a prisoner died from abuse by Iranian prison authorities in the wake of post-election unrest, a semiofficial news service reported Monday that the son of an adviser to a prominent conservative politician had died of “physical stress, conditions of imprisonment, repeated blows and harsh physical treatment.”
The report, by the Mehr News Agency, quoted “informed sources” as saying the medical examiner had determined that Mohsen Ruholamini, 25, died of abuse and neglect after being held in the Kahrizak detention center and then being transferred to Evin prison under “unsuitable conditions.” He was one of hundreds of people arrested as mass protests swept major Iranian cities after President Mahmoud Ahmadinejad claimed a landslide victory in June, and one of dozens who died.
“As a result of his poor physical condition, at the end of the journey, and after a delay of 70 minutes in transferring him to hospital, he unfortunately died,” said the report by Mehr, which has close ties to conservatives.
The apparent admission of abuse appears to fit squarely with the recent strategy of Ayatollah Ali Khamenei, the supreme leader, of trying to calm the political crisis that has not let up, and to restore some of his lost credibility, political analysts said.
As a religious and civil leader, he is supposed to be seen as above the political fray and as the embodiment of justice, qualities that analysts and reform supporters say were badly compromised when he sided with the president during the crisis.
The admission — if it is made official and leads to punishment — could also shore up the supreme leader’s support among senior clerics and pragmatic conservative politicians who are upset about the treatment of prisoners, President Ahmadinejad’s attempts to consolidate power and the ayatollah’s handling of the post-election crisis. Mr. Ruholamini’s case helped galvanize their anger.
Mr. Ruholamini’s father, Abdolhossein, was a senior political adviser to Mohsen Rezai, a defeated presidential candidate and former commander of the powerful Revolutionary Guards.
Authorities told the elder Mr. Ruholamini on Aug. 9 that his son had died of meningitis. But Mr. Ruholamini, who leads a prestigious scientific center in Tehran, later said that he had found his son’s bloodied and bruised body in a morgue.
On Sunday, one day before the report was released by Mehr, Mr. Ruholamini met privately with Ayatollah Khamenei, where he was assured that those responsible would be held accountable, even if they were part of the system, according to Iranian news services.
If the Mehr report is officially confirmed, it could pave the way for the arrest and conviction of government agents — perhaps even relatively high-ranking prison officials, a step that might be necessary to restore confidence among senior clerics and pragmatic conservatives, political analysts said.
“The supreme leader got what he wants — Ahmadinejad is president now — but he will not allow this conflict to deepen and continue,” said Mustafa Alani, director of security and defense studies at the Gulf Research Center in the United Arab Emirates. “He sees the bad side of this crisis and wants to start a new page.”
When the government tried to silence the post-election conflict through arrests, trials and intimidation, the crisis grew more heated amid a steady stream of charges, including that male and female prisoners had been raped and sodomized, that bodies had been buried in secret graves and that bruised and contorted corpses were being turned over to families.
Leaders of the reform movement said that at least 69 people had been killed during the post-election crackdown, while the government reported that 30 had died.
The president and his allies in the police force, prison system and military have consistently denied all charges of abuse, and they repeated those denials this week.
However, Ayatollah Khamenei ordered the closing of the Kahrizak prison, where several prisoners died, and authorities ordered an investigation into the deaths there.
But with the political crisis not subsiding, and the credibility of the Islamic republic’s system of governance questioned by the general public and the clerical elite, Parliament has begun two investigations into charges of prisoner abuse, and the supreme leader has shifted course, political analysts said.
In what analysts call an attempt to calm the concerns of his more pragmatic conservative allies and senior clerics, Ayatollah Khamenei recently said he did not believe that the opposition had been conspiring with foreign enemies, undercutting the most serious charges against former officials, journalists and academics that have been leveled by Mr. Ahmadinejad and his government.
And in another sign of efforts to soften the edges of the crackdown directed by the president, the judiciary — headed by a rival of Mr. Ahmadinejad — on Monday released Hamzeh Ghalebi, according to Parleman News, a Web site affiliated with conservative members of Parliament who are critical of the president. Mr. Ghalebi, a prominent member of the Islamic Iran Participation Front, has been very close to Mir Hussein Moussavi, a reform leader and presidential candidate.
Mr. Ghalebi’s health had deteriorated after almost 60 days in solitary confinement, and like others he had been forced to confess, according to a Web site affiliated with Mr. Moussavi.
Another element of Ayatollah Khamenei’s shift in tone was spelled out Wednesday in a meeting with university students, when he vowed that torture and abuse would not go unpunished.
“Be sure that no crime or atrocity will go unpunished, but with issues of that importance the judiciary should rule based on solid evidence,” the supreme leader said, insisting that rumors would not be enough.
But Ayatollah Khamenei was also clear about where he placed the greatest blame for what had convulsed the country since the presidential election, and it was not with the issue of torture or abuse.
“Some people — who tend to turn a blind eye to the oppression of the people, the Islamic establishment and the tarnished reputation of the establishment — seem to portray the Kahrizak issue as the main problem, whereas this on its own is another form of oppression against the nation,” he said.
The bigger problem, he maintained, was the post-election unrest, which he said had tarnished an otherwise valid election — a point millions of Iranians disputed when they took to the streets in protests that were later crushed by the police and armed militias.
Justice Dept. to Recharge Enforcement of Civil Rights
Justice Dept. to Recharge Enforcement of Civil Rights
By CHARLIE SAVAGE
Copyright by The New York Times
Published: August 31, 2009
http://www.nytimes.com/2009/09/01/us/politics/01rights.html?_r=1&th&emc=th
WASHINGTON — Seven months after taking office, Attorney General Eric H. Holder Jr. is reshaping the Justice Department’s Civil Rights Division by pushing it back into some of the most important areas of American political life, including voting rights, housing, employment, bank lending practices and redistricting after the 2010 census.
As part of this shift, the Obama administration is planning a major revival of high-impact civil rights enforcement against policies, in areas ranging from housing to hiring, where statistics show that minorities fare disproportionately poorly. President George W. Bush’s appointees had discouraged such tactics, preferring to focus on individual cases in which there is evidence of intentional discrimination.
To bolster a unit that has been battered by heavy turnover and a scandal over politically tinged hiring under the Bush administration, the Obama White House has also proposed a hiring spree that would swell the ranks of several hundred civil rights lawyers with more than 50 additional lawyers, a significant increase for a relatively small but powerful division of the government.
The division is “getting back to doing what it has traditionally done,” Mr. Holder said in an interview. “But it’s really only a start. I think the wounds that were inflicted on this division were deep, and it will take some time for them to fully heal.”
Few agencies are more engaged in the nation’s social and cultural debates than the Civil Rights Division, which was founded in 1957 to enforce anti-discrimination laws.
The division has been at the center of a number of controversies over the decades, serving as a proxy for disputes between liberals and conservatives in matters like school busing and affirmative action. When the Nixon administration took office, it sought to delay school desegregation plans reached under former President Lyndon B. Johnson. The Reagan administration dropped the division’s policy of opposing tax-exempt status for racially discriminatory private schools. And former President Bill Clinton withdrew his first nominee to lead the division, Lani Guinier, after her writings about racial quotas were criticized.
But such dust-ups were minor when compared with sweeping changes at the division under the Bush administration, longtime career civil rights lawyers say.
Now the changes that Mr. Holder is pushing through have led some conservatives, still stinging from accusations that the Bush appointees “politicized” the unit, to start throwing the same charge back at President Obama’s team.
The agency’s critics cite the downsizing of a voter intimidation case involving the New Black Panther Party, an investigation into whether an Arizona sheriff’s enforcement of immigration laws has discriminated against Hispanics, and the recent blocking of a new rule requiring Georgia voters to prove their citizenship. (Under the Bush administration, the division had signed off on a similar law requiring Georgia voters to furnish photographic identification, rejecting criticism that legitimate minority voters are disproportionately more likely not to have driver’s licenses or passports.)
Among the critics, Hans von Spakovsky, a former key Bush-era official at the division, has accused the Obama team of “nakedly political” maneuvers.
Tracy Schmaler, a Justice Department spokeswoman, rejected such criticism, saying those cases were decided “based on the facts and the law.”
Under the Bush administration, the agency shifted away from its traditional core focus on accusations of racial discrimination, channeling resources into areas like religious discrimination and human trafficking.
Department officials are working to avoid unleashing potential controversies as they rebuild the division’s more traditional efforts on behalf of minorities.
They are not planning to dismantle the new initiatives, rather to hire enough additional lawyers to do everything. The administration’s fiscal year 2010 budget request includes an increase of about $22 million for the division, an 18 percent increase from the 2009 budget. Other changes are already apparent.
The division has filed about 10 “friend of the court” briefs in private discrimination-related lawsuits since Mr. Obama’s inauguration, a practice that had dwindled in the previous administration.
In July, moreover, the division’s acting head, Loretta King, sent a memorandum to every federal agency urging more aggressive enforcement of regulations that forbid recipients of taxpayer money from policies that have a disparate impact on minorities.
The division has also lifted Bush-era rules that some career staff members saw as micromanagement or impediments, like restrictions on internal communications and a ban on front-line career lawyers’ making recommendations on whether to approve proposed changes to election laws.
Other changes from the Bush years may be harder to roll back. The division’s downgrading of the New Black Panther Party charges, which were filed in the final days of the Bush administration, has had rippling consequences. It apparently prompted Senate Republicans to put a hold on President Obama’s nominee to lead the division as assistant attorney general for civil rights, Thomas Perez.
The delay in Mr. Perez’s arrival, in turn, is stalling plans to review section managers installed by the Bush team, including several regarded with suspicion by civil rights advocacy groups. Under federal law, top-level career officials may not be transferred to other positions for the first 120 days after a new agency head is confirmed.
Bush-era changes to the division’s permanent rank may also have lingering effects. From 2003 to 2007, Bush political appointees blocked liberals from career jobs and promotions, which they steered to fellow conservatives, whom one such official privately described as “real Americans,” a department inspector general report found. The practice, which no previous administration had done, violated civil service laws, it said.
As morale plunged among veterans, turnover accelerated. The Obama transition team’s confidential report on the division, obtained by The New York Times, says 236 civil rights lawyers left from 2003 to 2007. (The division has about 350 lawyers.)
Many of their replacements had scant civil rights experience and were graduates of lower-ranked law schools. The transition report says the era of hiring such “inexperienced or poorly qualified” lawyers — who are now themselves protected by civil service laws — has left lasting damage.
“While some of the political hires have performed competently and a number of others have left, the net effect of the politicized hiring process and the brain drain is an attorney work force largely ill-equipped to handle the complex, big-impact litigation that should comprise a significant part” of the division’s docket, the transition report said.
At the end of the Bush administration, the attorney general at the time, Michael B. Mukasey, began to make changes intended to reduce political influence over entry-level career lawyer hiring. The Civil Rights Division is now seeking to expand those changes.
It is developing a new hiring policy under which panels of career employees — not political appointees — would decide both whom to hire and to promote for positions from interns to veteran lawyers. The policy could be completed as early as this month.
“We wanted to create a very transparent policy that will stand the test of time and ensure that we hire the best and brightest,” said Mark Kappelhoff, a longtime civil rights lawyer who is the division’s acting principal deputy assistant attorney general.
Some conservatives are skeptical that such a policy will keep politics out of hiring, however. Robert Driscoll, a division political appointee from 2001 to 2003, said career civil rights lawyers are “overwhelmingly left-leaning” and will favor liberals.
“If you are the Obama administration and you allow the career staff to do all the hiring, you will get the same people you would probably get if you did it yourself,” he said. “In some ways, it’s a masterstroke by them.”
Mr. Holder has elsewhere called for social changes with civil rights overtones, like the passage of a federal hate-crimes law, the elimination of the sentencing disparity between crack and powder cocaine and greater financing for indigent defense.
By contrast, he described his Civil Rights Division efforts as more restoration than change. The recent moves, he argued, are a return to its basic approach under presidents of both parties — despite some policy shifts between Republican and Democratic administrations — before the “sea change” and “aberration” of the Bush years.
“Of course there are going to be critics,” Mr. Holder said. But, he argued, “any objective observer” would see the recent approach as consistent with “the historical mission of the division, not straying into some kind of liberal orthodoxy. It really is just a function of enforcing the statutes.”
By CHARLIE SAVAGE
Copyright by The New York Times
Published: August 31, 2009
http://www.nytimes.com/2009/09/01/us/politics/01rights.html?_r=1&th&emc=th
WASHINGTON — Seven months after taking office, Attorney General Eric H. Holder Jr. is reshaping the Justice Department’s Civil Rights Division by pushing it back into some of the most important areas of American political life, including voting rights, housing, employment, bank lending practices and redistricting after the 2010 census.
As part of this shift, the Obama administration is planning a major revival of high-impact civil rights enforcement against policies, in areas ranging from housing to hiring, where statistics show that minorities fare disproportionately poorly. President George W. Bush’s appointees had discouraged such tactics, preferring to focus on individual cases in which there is evidence of intentional discrimination.
To bolster a unit that has been battered by heavy turnover and a scandal over politically tinged hiring under the Bush administration, the Obama White House has also proposed a hiring spree that would swell the ranks of several hundred civil rights lawyers with more than 50 additional lawyers, a significant increase for a relatively small but powerful division of the government.
The division is “getting back to doing what it has traditionally done,” Mr. Holder said in an interview. “But it’s really only a start. I think the wounds that were inflicted on this division were deep, and it will take some time for them to fully heal.”
Few agencies are more engaged in the nation’s social and cultural debates than the Civil Rights Division, which was founded in 1957 to enforce anti-discrimination laws.
The division has been at the center of a number of controversies over the decades, serving as a proxy for disputes between liberals and conservatives in matters like school busing and affirmative action. When the Nixon administration took office, it sought to delay school desegregation plans reached under former President Lyndon B. Johnson. The Reagan administration dropped the division’s policy of opposing tax-exempt status for racially discriminatory private schools. And former President Bill Clinton withdrew his first nominee to lead the division, Lani Guinier, after her writings about racial quotas were criticized.
But such dust-ups were minor when compared with sweeping changes at the division under the Bush administration, longtime career civil rights lawyers say.
Now the changes that Mr. Holder is pushing through have led some conservatives, still stinging from accusations that the Bush appointees “politicized” the unit, to start throwing the same charge back at President Obama’s team.
The agency’s critics cite the downsizing of a voter intimidation case involving the New Black Panther Party, an investigation into whether an Arizona sheriff’s enforcement of immigration laws has discriminated against Hispanics, and the recent blocking of a new rule requiring Georgia voters to prove their citizenship. (Under the Bush administration, the division had signed off on a similar law requiring Georgia voters to furnish photographic identification, rejecting criticism that legitimate minority voters are disproportionately more likely not to have driver’s licenses or passports.)
Among the critics, Hans von Spakovsky, a former key Bush-era official at the division, has accused the Obama team of “nakedly political” maneuvers.
Tracy Schmaler, a Justice Department spokeswoman, rejected such criticism, saying those cases were decided “based on the facts and the law.”
Under the Bush administration, the agency shifted away from its traditional core focus on accusations of racial discrimination, channeling resources into areas like religious discrimination and human trafficking.
Department officials are working to avoid unleashing potential controversies as they rebuild the division’s more traditional efforts on behalf of minorities.
They are not planning to dismantle the new initiatives, rather to hire enough additional lawyers to do everything. The administration’s fiscal year 2010 budget request includes an increase of about $22 million for the division, an 18 percent increase from the 2009 budget. Other changes are already apparent.
The division has filed about 10 “friend of the court” briefs in private discrimination-related lawsuits since Mr. Obama’s inauguration, a practice that had dwindled in the previous administration.
In July, moreover, the division’s acting head, Loretta King, sent a memorandum to every federal agency urging more aggressive enforcement of regulations that forbid recipients of taxpayer money from policies that have a disparate impact on minorities.
The division has also lifted Bush-era rules that some career staff members saw as micromanagement or impediments, like restrictions on internal communications and a ban on front-line career lawyers’ making recommendations on whether to approve proposed changes to election laws.
Other changes from the Bush years may be harder to roll back. The division’s downgrading of the New Black Panther Party charges, which were filed in the final days of the Bush administration, has had rippling consequences. It apparently prompted Senate Republicans to put a hold on President Obama’s nominee to lead the division as assistant attorney general for civil rights, Thomas Perez.
The delay in Mr. Perez’s arrival, in turn, is stalling plans to review section managers installed by the Bush team, including several regarded with suspicion by civil rights advocacy groups. Under federal law, top-level career officials may not be transferred to other positions for the first 120 days after a new agency head is confirmed.
Bush-era changes to the division’s permanent rank may also have lingering effects. From 2003 to 2007, Bush political appointees blocked liberals from career jobs and promotions, which they steered to fellow conservatives, whom one such official privately described as “real Americans,” a department inspector general report found. The practice, which no previous administration had done, violated civil service laws, it said.
As morale plunged among veterans, turnover accelerated. The Obama transition team’s confidential report on the division, obtained by The New York Times, says 236 civil rights lawyers left from 2003 to 2007. (The division has about 350 lawyers.)
Many of their replacements had scant civil rights experience and were graduates of lower-ranked law schools. The transition report says the era of hiring such “inexperienced or poorly qualified” lawyers — who are now themselves protected by civil service laws — has left lasting damage.
“While some of the political hires have performed competently and a number of others have left, the net effect of the politicized hiring process and the brain drain is an attorney work force largely ill-equipped to handle the complex, big-impact litigation that should comprise a significant part” of the division’s docket, the transition report said.
At the end of the Bush administration, the attorney general at the time, Michael B. Mukasey, began to make changes intended to reduce political influence over entry-level career lawyer hiring. The Civil Rights Division is now seeking to expand those changes.
It is developing a new hiring policy under which panels of career employees — not political appointees — would decide both whom to hire and to promote for positions from interns to veteran lawyers. The policy could be completed as early as this month.
“We wanted to create a very transparent policy that will stand the test of time and ensure that we hire the best and brightest,” said Mark Kappelhoff, a longtime civil rights lawyer who is the division’s acting principal deputy assistant attorney general.
Some conservatives are skeptical that such a policy will keep politics out of hiring, however. Robert Driscoll, a division political appointee from 2001 to 2003, said career civil rights lawyers are “overwhelmingly left-leaning” and will favor liberals.
“If you are the Obama administration and you allow the career staff to do all the hiring, you will get the same people you would probably get if you did it yourself,” he said. “In some ways, it’s a masterstroke by them.”
Mr. Holder has elsewhere called for social changes with civil rights overtones, like the passage of a federal hate-crimes law, the elimination of the sentencing disparity between crack and powder cocaine and greater financing for indigent defense.
By contrast, he described his Civil Rights Division efforts as more restoration than change. The recent moves, he argued, are a return to its basic approach under presidents of both parties — despite some policy shifts between Republican and Democratic administrations — before the “sea change” and “aberration” of the Bush years.
“Of course there are going to be critics,” Mr. Holder said. But, he argued, “any objective observer” would see the recent approach as consistent with “the historical mission of the division, not straying into some kind of liberal orthodoxy. It really is just a function of enforcing the statutes.”
Recession hits US cities’ finances
Recession hits US cities’ finances
By Nicole Bullock in New York
Copyright The Financial Times Limited 2009
Published: September 1 2009 13:44 | Last updated: September 1 2009 13:44
http://www.ft.com/cms/s/0/1e6e2d8c-9666-11de-84d1-00144feabdc0.html
The finances of US cities continue to deteriorate as the ripple effects of a national recession reach local revenues, according to research.
For 2009, 88 per cent of city finance officers said their cities were less able to meet fiscal needs than in 2008, amid declining house values, restrictive credit markets, slowed consumer spending and rising unemployment, a survey conducted by the National League of Cities and released on Tuesday shows.
Nine out of 10 predicted the situation would be worse in 2010.
The reading is up from 64 per cent last year and puts pessimism about cities’ ability to meet fiscal needs at its highest level since the research firm began surveying city finance officers 24 years ago.
“Despite our ability to absorb major cuts and the hits we have taken in this crisis, municipal officers are all sitting on edge,” said Joseph Curtatone, the mayor of Somerville, Massachusetts, a working class city north of Boston. “Have we hit bottom? Have we turned the corner? We just cannot predict that.”
The difficulty may be just beginning, since city finances tend to lag behind changing economic conditions by 18 months to several years.
Because of assessment cycles, for example, it often takes several years for city property taxes to reflect changes in property values. For this reason, cities will feel the deeper effects of the recession beyond 2009, with the worst years being 2010 and 2011, the survey predicted.
That dynamic poses a potential headwind for a national economic recovery, as local governments lay off workers and scrap projects to cut costs.
“One out of seven jobs in the US is the state and local government sector,” said Christopher Hoene, director of the NLC centre for research and innovation. “It suggests that this sector is large enough to drag the economy down.”
It represents about 12-13 per cent of national gross domestic product, equivalent to the tourism sector, Mr Hoene said. “This is a big sector of the economy: they hire, they spend, they invest and not in inconsequential ways.”
Fiscal conditions of independent US cities vary depending on local tax structures. Most cities set property taxes, but many also rely on local sales and income tax. Many cities get a large chunk of revenue from state aid, which states are cutting to deal with their own shortfalls.
Officials in Somerville, Massachusetts, had to craft the 2010 budget without more than $11m in state aid. Cuts include giving holidays to more than 300 employees and raising fines and fees, like parking meter rates and building permits.
In New Haven, which also saw a drop in state aid as Connecticut still has not agreed a budget, John DeStefano, the mayor, says the city has cut about 5 per cent of the workforce, closed three centres for the elderly and one school building.
Finance officers predicted revenue in 2009 would fall an inflation-adjusted 0.4 per cent, while spending would increase 2.5 per cent from declining local economic health; rising costs of services, public safety and infrastructure; and the costs of healthcare, pensions and wages for workers.
By Nicole Bullock in New York
Copyright The Financial Times Limited 2009
Published: September 1 2009 13:44 | Last updated: September 1 2009 13:44
http://www.ft.com/cms/s/0/1e6e2d8c-9666-11de-84d1-00144feabdc0.html
The finances of US cities continue to deteriorate as the ripple effects of a national recession reach local revenues, according to research.
For 2009, 88 per cent of city finance officers said their cities were less able to meet fiscal needs than in 2008, amid declining house values, restrictive credit markets, slowed consumer spending and rising unemployment, a survey conducted by the National League of Cities and released on Tuesday shows.
Nine out of 10 predicted the situation would be worse in 2010.
The reading is up from 64 per cent last year and puts pessimism about cities’ ability to meet fiscal needs at its highest level since the research firm began surveying city finance officers 24 years ago.
“Despite our ability to absorb major cuts and the hits we have taken in this crisis, municipal officers are all sitting on edge,” said Joseph Curtatone, the mayor of Somerville, Massachusetts, a working class city north of Boston. “Have we hit bottom? Have we turned the corner? We just cannot predict that.”
The difficulty may be just beginning, since city finances tend to lag behind changing economic conditions by 18 months to several years.
Because of assessment cycles, for example, it often takes several years for city property taxes to reflect changes in property values. For this reason, cities will feel the deeper effects of the recession beyond 2009, with the worst years being 2010 and 2011, the survey predicted.
That dynamic poses a potential headwind for a national economic recovery, as local governments lay off workers and scrap projects to cut costs.
“One out of seven jobs in the US is the state and local government sector,” said Christopher Hoene, director of the NLC centre for research and innovation. “It suggests that this sector is large enough to drag the economy down.”
It represents about 12-13 per cent of national gross domestic product, equivalent to the tourism sector, Mr Hoene said. “This is a big sector of the economy: they hire, they spend, they invest and not in inconsequential ways.”
Fiscal conditions of independent US cities vary depending on local tax structures. Most cities set property taxes, but many also rely on local sales and income tax. Many cities get a large chunk of revenue from state aid, which states are cutting to deal with their own shortfalls.
Officials in Somerville, Massachusetts, had to craft the 2010 budget without more than $11m in state aid. Cuts include giving holidays to more than 300 employees and raising fines and fees, like parking meter rates and building permits.
In New Haven, which also saw a drop in state aid as Connecticut still has not agreed a budget, John DeStefano, the mayor, says the city has cut about 5 per cent of the workforce, closed three centres for the elderly and one school building.
Finance officers predicted revenue in 2009 would fall an inflation-adjusted 0.4 per cent, while spending would increase 2.5 per cent from declining local economic health; rising costs of services, public safety and infrastructure; and the costs of healthcare, pensions and wages for workers.
German joblessness falls in August - Boost for Merkel ahead of election
German joblessness falls in August - Boost for Merkel ahead of election
By Ralph Atkins in Frankfurt
Copyright The Financial Times Limited 2009
Published: September 1 2009 10:54 | Last updated: September 1 2009 10:54
http://www.ft.com/cms/s/0/f5963316-96d6-11de-9c24-00144feabdc0.html
German unemployment fell unexpectedly in August, helped by government action to safeguard jobs, as the country’s economic rebound left rival eurozone economies trailing.
Although modest, the second successive monthly fall in seasonally adjusted joblessness in Europe’s largest economy will come as a boost to Angela Merkel, Germany’s chancellor, as she seeks re-election on September 27.
It will also encourage hopes that Germany will avoid a dramatic shake-out in its labour market as a result of the steep collapse in economic output since late last year.
In contrast, the eurozone seasonally adjusted unemployment rate rose from 9.4 per cent in June to a 10-year high of 9.5 per cent in July, according to separate figures from Eurostat, the European Union’s statistical office.
Germany took economists aback last month by reporting it had escaped recession in the second quarter – ahead of the UK and US.
Seasonally-adjusted German unemployment fell by 1,000 to 3.48m in August. That followed a 5,000 fall in the previous month. Unemployment as a share of the labour force remained unchanged at 8.3 per cent in August.
Berlin has expanded significantly publicly funded schemes allowing companies to put workers on short-time working. Earlier in the crisis, many economists – including at the European Central Bank – feared such measures would simply slow an inevitable economic restructuring process in Germany’s heavily export-dependent economy.
Economic forecast
Interactive feature on the outlook across Europe
Even if fears of German unemployment hitting 5m next year were looking misplaced, further rises were inevitable, said Andreas Rees, economist at Unicredit in Munich. ”Since one cannot beat fundamentals, this is simply a mission impossible,” he said.
Germany’s latest unemployment numbers were also flattered by one-off statistical changes which masked an underlying rising trend, economists said.
Trends in German unemployment in the coming months could now prove decisive in determining the strength of the eurozone’s recovery. If rises are only modest, domestic demand – coupled with a pick-up in exports powered by a revival in global demand – may see Germany leading a broader recovery across continental Europe.
However, divergences remain across the eurozone – possibly exacerbated by the strength of the euro, which appears to be wreaking less damage in Germany.
The fall in German unemployment coincided with revised purchasing managers’ indices for August that highlighted the strength of the country’s manufacturing rebound, relative to other eurozone countries.
Along with their counterparts in France, German manufacturers reported the fastest rate of improvement in August, with its index leaping from 45.7 in July to an upwards revised 49.2 in August. That brought it close to the 50 level, above which the index indicates an expansion in activity.
At the other end of the scale were Italy, Spain and Ireland, which reported lower levels of output.
“Italy was by far the weakest performer overall and the only nation to report a steeper contraction in production than in July,” according to Markit, the information group, which produces the survey.
Spain, meanwhile, has the worst unemployment situation in the European Union, with its unemployment rate rising from 18.2 per cent in June to 18.5 per cent in July, according to the Eurostat figures.
By Ralph Atkins in Frankfurt
Copyright The Financial Times Limited 2009
Published: September 1 2009 10:54 | Last updated: September 1 2009 10:54
http://www.ft.com/cms/s/0/f5963316-96d6-11de-9c24-00144feabdc0.html
German unemployment fell unexpectedly in August, helped by government action to safeguard jobs, as the country’s economic rebound left rival eurozone economies trailing.
Although modest, the second successive monthly fall in seasonally adjusted joblessness in Europe’s largest economy will come as a boost to Angela Merkel, Germany’s chancellor, as she seeks re-election on September 27.
It will also encourage hopes that Germany will avoid a dramatic shake-out in its labour market as a result of the steep collapse in economic output since late last year.
In contrast, the eurozone seasonally adjusted unemployment rate rose from 9.4 per cent in June to a 10-year high of 9.5 per cent in July, according to separate figures from Eurostat, the European Union’s statistical office.
Germany took economists aback last month by reporting it had escaped recession in the second quarter – ahead of the UK and US.
Seasonally-adjusted German unemployment fell by 1,000 to 3.48m in August. That followed a 5,000 fall in the previous month. Unemployment as a share of the labour force remained unchanged at 8.3 per cent in August.
Berlin has expanded significantly publicly funded schemes allowing companies to put workers on short-time working. Earlier in the crisis, many economists – including at the European Central Bank – feared such measures would simply slow an inevitable economic restructuring process in Germany’s heavily export-dependent economy.
Economic forecast
Interactive feature on the outlook across Europe
Even if fears of German unemployment hitting 5m next year were looking misplaced, further rises were inevitable, said Andreas Rees, economist at Unicredit in Munich. ”Since one cannot beat fundamentals, this is simply a mission impossible,” he said.
Germany’s latest unemployment numbers were also flattered by one-off statistical changes which masked an underlying rising trend, economists said.
Trends in German unemployment in the coming months could now prove decisive in determining the strength of the eurozone’s recovery. If rises are only modest, domestic demand – coupled with a pick-up in exports powered by a revival in global demand – may see Germany leading a broader recovery across continental Europe.
However, divergences remain across the eurozone – possibly exacerbated by the strength of the euro, which appears to be wreaking less damage in Germany.
The fall in German unemployment coincided with revised purchasing managers’ indices for August that highlighted the strength of the country’s manufacturing rebound, relative to other eurozone countries.
Along with their counterparts in France, German manufacturers reported the fastest rate of improvement in August, with its index leaping from 45.7 in July to an upwards revised 49.2 in August. That brought it close to the 50 level, above which the index indicates an expansion in activity.
At the other end of the scale were Italy, Spain and Ireland, which reported lower levels of output.
“Italy was by far the weakest performer overall and the only nation to report a steeper contraction in production than in July,” according to Markit, the information group, which produces the survey.
Spain, meanwhile, has the worst unemployment situation in the European Union, with its unemployment rate rising from 18.2 per cent in June to 18.5 per cent in July, according to the Eurostat figures.
U.S. Rebates Gave Auto Sales a Big Lift in August
U.S. Rebates Gave Auto Sales a Big Lift in August
By NICK BUNKLEY
Copyright by The New York Times
Published: September 1, 2009
http://www.nytimes.com/2009/09/02/business/02auto.html?_r=1&ref=global-home
DETROIT — The federal government’s “cash for clunkers” program made August the best month of the year for new-vehicle sales in the United States, automakers said Tuesday.
But the numbers also show that sales fell dramatically in the last week of the month, after the $3 billion program came to an end. Analysts say the rest of the year could be fairly slow, though sales are expected to be up on a year-over-year basis because the final months of 2008 were so miserable.
The first automaker to report, the Ford Motor Company, said its sales rose 17 percent last month from a year ago, marking the first time since 2006 that Ford’s sales rose in two consecutive months. Its sales rose 2.3 percent in July.
Ford also said its retail market share, which excludes bulk deliveries to businesses and governments, rose for the 10th time in 11 months.
Sales of the Ford F-series, a large pickup truck popular among building contractors, rose 13 percent to the highest level in more than a year, a positive sign for the automotive market and the broader economy, the company said.
“We’re very pleased with the balanced performance of our products — from Focus to F-Series,” Ken Czubay, Ford’s vice president of marketing, sales and service in the United States, said in a statement. “We are hopeful that the sales of our pickups and all-new Transit Connect are an indication that small business owners are seeing signs of recovery and gaining confidence in the outlook for stronger business conditions.”
Hyundai, the South Korean carmaker, is expected to report record-high sales for the month, far surpassing its year-ago numbers.
Other companies, though, are projected to report that their sales were about even with or below their August 2008s, despite the lift that the clunkers program provided. General Motors, Chrysler, Toyota and others are scheduled to report August sales later Tuesday.
The clunkers program, which gave consumers a credit of $3,500 or $4,500 if they turned in an older vehicle and bought a new, more fuel-efficient one, led to nearly 700,000 sales in a one-month period. It began July 24 and received a $2 billion extension from Congress after its popularity greatly outstripped expectations in its first week.
The surge in demand caused many dealers to run low on inventory of popular vehicles, especially small and midsize cars. Most automakers are ramping up production to replenish those inventories. G.M. is calling back about 1,350 hourly workers to factories in Ohio and Ontario, and factories operated by a variety of companies are suddenly running on overtime, something that has been extremely rare since the market’s slump began in 2008.
“We estimate that as much as 60 percent of vehicle sales under the program represented ‘stimulated demand’ from consumers who were not otherwise intending to buy,” Bruce Clark, a senior vice president at Moody’s in New York, wrote in a report this week. “While the program pulled forward some sales that would have occurred later, we are maintaining our base-case scenario of an 11.5 million unit” market in 2010.
That is still well below the type of market that automakers had been used to, until this year’s slump. Through the first half of 2009, sales were on pace to fall below 10 million for the full year, and in 2008, automakers sold about 13.2 million vehicles, the fewest since 1992. Earlier this decade, annual new-vehicle sales were around 17 million.
The clunkers program helped Asian automakers more than the Detroit companies, which accounted for 39 percent of sales through the program compared with their year-to-date market share of 45 percent.
About one out of every five vehicle bought through the program was a Toyota, making that the most popular brand among participants. It was followed by G.M., Ford and Honda, in that order.
Although the program has ended, most dealers still are waiting to receive reimbursement for the rebates they gave customers. After initial processing delays, the Transportation Department tripled the number of workers handling paperwork for the program.
The backlog has caused a cash crunch for some dealers, but the crowded showrooms were a welcome change from the gloominess that has characterized most of this year.
By NICK BUNKLEY
Copyright by The New York Times
Published: September 1, 2009
http://www.nytimes.com/2009/09/02/business/02auto.html?_r=1&ref=global-home
DETROIT — The federal government’s “cash for clunkers” program made August the best month of the year for new-vehicle sales in the United States, automakers said Tuesday.
But the numbers also show that sales fell dramatically in the last week of the month, after the $3 billion program came to an end. Analysts say the rest of the year could be fairly slow, though sales are expected to be up on a year-over-year basis because the final months of 2008 were so miserable.
The first automaker to report, the Ford Motor Company, said its sales rose 17 percent last month from a year ago, marking the first time since 2006 that Ford’s sales rose in two consecutive months. Its sales rose 2.3 percent in July.
Ford also said its retail market share, which excludes bulk deliveries to businesses and governments, rose for the 10th time in 11 months.
Sales of the Ford F-series, a large pickup truck popular among building contractors, rose 13 percent to the highest level in more than a year, a positive sign for the automotive market and the broader economy, the company said.
“We’re very pleased with the balanced performance of our products — from Focus to F-Series,” Ken Czubay, Ford’s vice president of marketing, sales and service in the United States, said in a statement. “We are hopeful that the sales of our pickups and all-new Transit Connect are an indication that small business owners are seeing signs of recovery and gaining confidence in the outlook for stronger business conditions.”
Hyundai, the South Korean carmaker, is expected to report record-high sales for the month, far surpassing its year-ago numbers.
Other companies, though, are projected to report that their sales were about even with or below their August 2008s, despite the lift that the clunkers program provided. General Motors, Chrysler, Toyota and others are scheduled to report August sales later Tuesday.
The clunkers program, which gave consumers a credit of $3,500 or $4,500 if they turned in an older vehicle and bought a new, more fuel-efficient one, led to nearly 700,000 sales in a one-month period. It began July 24 and received a $2 billion extension from Congress after its popularity greatly outstripped expectations in its first week.
The surge in demand caused many dealers to run low on inventory of popular vehicles, especially small and midsize cars. Most automakers are ramping up production to replenish those inventories. G.M. is calling back about 1,350 hourly workers to factories in Ohio and Ontario, and factories operated by a variety of companies are suddenly running on overtime, something that has been extremely rare since the market’s slump began in 2008.
“We estimate that as much as 60 percent of vehicle sales under the program represented ‘stimulated demand’ from consumers who were not otherwise intending to buy,” Bruce Clark, a senior vice president at Moody’s in New York, wrote in a report this week. “While the program pulled forward some sales that would have occurred later, we are maintaining our base-case scenario of an 11.5 million unit” market in 2010.
That is still well below the type of market that automakers had been used to, until this year’s slump. Through the first half of 2009, sales were on pace to fall below 10 million for the full year, and in 2008, automakers sold about 13.2 million vehicles, the fewest since 1992. Earlier this decade, annual new-vehicle sales were around 17 million.
The clunkers program helped Asian automakers more than the Detroit companies, which accounted for 39 percent of sales through the program compared with their year-to-date market share of 45 percent.
About one out of every five vehicle bought through the program was a Toyota, making that the most popular brand among participants. It was followed by G.M., Ford and Honda, in that order.
Although the program has ended, most dealers still are waiting to receive reimbursement for the rebates they gave customers. After initial processing delays, the Transportation Department tripled the number of workers handling paperwork for the program.
The backlog has caused a cash crunch for some dealers, but the crowded showrooms were a welcome change from the gloominess that has characterized most of this year.
Global manufacturing rebound gathers pace - UK is left behind as US, China and France improve/US manufacturing revives in August
Global manufacturing rebound gathers pace - UK is left behind as US, China and France improve
By Ralph Atkins in Frankfurt, Alan Rappeport in New York and Justine Lau in Hong Kong
Copyright The Financial Times Limited 2009
Published: September 1 2009 16:11 | Last updated: September 1 2009 16:11
http://www.ft.com/cms/s/0/b00e0644-9707-11de-83c5-00144feabdc0.html
The global rebound in manufacturing gathered pace in August, but some European countries, especially the UK, were left behind.
The US, China, Germany and France reported further strong improvements in manufacturing activity surveys, adding to evidence of a v-shaped recovery in economic growth in the third quarter.
The latest upbeat data could help calm financial markets’ fears about growth prospects once emergency measures by governments and central bank are withdrawn. Although rising unemployment and weakened banks remain threats to growth, the industrial sector’s renewed dynamism boosted hopes of self-sustaining growth.
“At the global level there is very strong evidence of a powerful upturn coming through, particularly in the new order components of these indices,” said Julian Callow, European economist at Barclays Capital.
However manufacturers themselves did not appear convinced the recovery was sustainable. ”Companies are spending on rebuilding stocks but not on capital equipment,” said Chris Williamson, chief economist at Markit, which produces the surveys outside the US.
US manufacturing activity grew for the first time in more than a year and a half in August, as bold government stimulus measures spurred a surge in new orders. The Institute of Supply Management said its August survey index rose from 48.9 to 52.9, beating economists’ expectations. It was the first time in 19 months that the index had exceeded 50, which marks the boundary between contracting and expanding activity.
US manufacturers said they were experiencing greater demand from car makers due to the cash-for-clunkers rebate programme and that the sudden surge in demand had caused a shortage in supply of raw steel.
“The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand,” said Norbert Ore, ISM chairman.
In the eurozone, revised French and German purchasing managers’ indices showed the fastest rates of improvement. France’s index rose from 48.1 in July to 50.8 in August – the first time it had indicated expanding activity since May last year. Germany’s index leapt from 45.7 in July to 49.2 last month.
Divergences emerged, however, across Europe with Italy and Spain seeing industrial activity contracting at a faster pace again – which economists said could have resulted from the impact of the strong euro on their exporters.
Beyond the eurozone, the UK’s CIPS/Markit purchasing managers’ index fell from 50.2 to 49.7 in August – pointing to a contraction in activity.
“Concerns will remain that the improvements seen in recent months may have been temporary rather than a sustainable recovery,” warned David Noble, chief executive at the Chartered Institute for Purchasing and Supply. He noted a “worrisome” slowdown in the UK rate of new order growth.
China has shown the clearest rebound so far this year. Its manufacturing purchasing managers’ index rose to 55.1 from 52.8 in July, pointing to a fifth consecutive month of expanding activity.
“China’s recovery is keeping up strong momentum,” said Qu Hongbin, chief China economist at HSBC. Fears that government curbs on bank lending could stall the recovery have led to high volatility in the Shanghai stock market.
Manufacturing activities also expanded in other Asian countries. In Taiwan, the HSBC PMI rose for the sixth successive month, from 53.8 in July to 55 in August. In South Korea, the index stood at 53.6 in August, the second-highest reading for 19 months, though down from 54 in July. Japan said this week that the seasonally adjusted Nomura/JMMA PMI rose from 50.4 in July to 53.6 in August, its highest level since November 2006.
Additional reporting by Norma Cohen in London
US manufacturing revives in August
By Alan Rappeport in New York
Copyright The Financial Times Limited 2009
Published: September 1 2009 16:00 | Last updated: September 1 2009 16:00
http://www.ft.com/cms/s/0/90e21fa0-96f1-11de-9c24-00144feabdc0.html
US manufacturing activity grew for the first time in more than a year and a half in August as bold government stimulus measures spurred a surge in new orders.
Separately on Tuesday, pending home sales rose to the highest level in more than two years as buyers were lured back to the market by first-time buyer tax credits while US construction spending slipped in July.
The Institute of Supply Management said on Tuesday that its survey for August rose from 48.9 to 52.9, beating economists’ expectations. The index surpassed 50, which signals expanding activity, for the first time in 19 months.
Manufacturers said they were experiencing greater demand from car makers due to the cash-for-clunkers rebate programme and that the sudden surge in demand had caused a shortage in supply of raw steel.
Last month, 11 of the 18 industries surveyed reported growth, led by textiles, apparel and paper. New orders jumped by 9.6 percentage points, rising to the highest level since December 2004.
Analysts have been waiting to see if the signs of life in manufacturing are sustainable, which ultimately depends on a return of consumer demand.
“The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand,” said Norbert Ore, ISM chairman.
The expansion in US manufacturing is a good sign for the overall economy. Mr Ore noted that if the current level of activity is maintained, US gross domestic product would expand at an annual rate of 3.7 per cent.
Meanwhile, the National Association of Realtors said on Tuesday that pending home sales jumped by 12 per cent year-on-year in July and rose by 3.2 per cent from June. Lawrence Yun, NAR’s chief economist, pointed to record levels of home affordability and the impact of government tax incentives as reasons the housing market was stabilising.
Compared with last year, sales were up by 4.7 per cent in the northeast, 8.1 per cent in the midwest, 12 per cent in the south and 20 per cent in the west.
“Even with a good recovery taking place, the market is not yet back to normal,” said Charles McMillan, NAR president. “With a gradual absorption of inventory, we are on the cusp of a general stabilisation in home prices.”
Rising sales failed to generate gains in construction spending in July as federal spending on schools and highways declined during the month. However, spending ticked up for privately funded residential and commercial building.
By Ralph Atkins in Frankfurt, Alan Rappeport in New York and Justine Lau in Hong Kong
Copyright The Financial Times Limited 2009
Published: September 1 2009 16:11 | Last updated: September 1 2009 16:11
http://www.ft.com/cms/s/0/b00e0644-9707-11de-83c5-00144feabdc0.html
The global rebound in manufacturing gathered pace in August, but some European countries, especially the UK, were left behind.
The US, China, Germany and France reported further strong improvements in manufacturing activity surveys, adding to evidence of a v-shaped recovery in economic growth in the third quarter.
The latest upbeat data could help calm financial markets’ fears about growth prospects once emergency measures by governments and central bank are withdrawn. Although rising unemployment and weakened banks remain threats to growth, the industrial sector’s renewed dynamism boosted hopes of self-sustaining growth.
“At the global level there is very strong evidence of a powerful upturn coming through, particularly in the new order components of these indices,” said Julian Callow, European economist at Barclays Capital.
However manufacturers themselves did not appear convinced the recovery was sustainable. ”Companies are spending on rebuilding stocks but not on capital equipment,” said Chris Williamson, chief economist at Markit, which produces the surveys outside the US.
US manufacturing activity grew for the first time in more than a year and a half in August, as bold government stimulus measures spurred a surge in new orders. The Institute of Supply Management said its August survey index rose from 48.9 to 52.9, beating economists’ expectations. It was the first time in 19 months that the index had exceeded 50, which marks the boundary between contracting and expanding activity.
US manufacturers said they were experiencing greater demand from car makers due to the cash-for-clunkers rebate programme and that the sudden surge in demand had caused a shortage in supply of raw steel.
“The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand,” said Norbert Ore, ISM chairman.
In the eurozone, revised French and German purchasing managers’ indices showed the fastest rates of improvement. France’s index rose from 48.1 in July to 50.8 in August – the first time it had indicated expanding activity since May last year. Germany’s index leapt from 45.7 in July to 49.2 last month.
Divergences emerged, however, across Europe with Italy and Spain seeing industrial activity contracting at a faster pace again – which economists said could have resulted from the impact of the strong euro on their exporters.
Beyond the eurozone, the UK’s CIPS/Markit purchasing managers’ index fell from 50.2 to 49.7 in August – pointing to a contraction in activity.
“Concerns will remain that the improvements seen in recent months may have been temporary rather than a sustainable recovery,” warned David Noble, chief executive at the Chartered Institute for Purchasing and Supply. He noted a “worrisome” slowdown in the UK rate of new order growth.
China has shown the clearest rebound so far this year. Its manufacturing purchasing managers’ index rose to 55.1 from 52.8 in July, pointing to a fifth consecutive month of expanding activity.
“China’s recovery is keeping up strong momentum,” said Qu Hongbin, chief China economist at HSBC. Fears that government curbs on bank lending could stall the recovery have led to high volatility in the Shanghai stock market.
Manufacturing activities also expanded in other Asian countries. In Taiwan, the HSBC PMI rose for the sixth successive month, from 53.8 in July to 55 in August. In South Korea, the index stood at 53.6 in August, the second-highest reading for 19 months, though down from 54 in July. Japan said this week that the seasonally adjusted Nomura/JMMA PMI rose from 50.4 in July to 53.6 in August, its highest level since November 2006.
Additional reporting by Norma Cohen in London
US manufacturing revives in August
By Alan Rappeport in New York
Copyright The Financial Times Limited 2009
Published: September 1 2009 16:00 | Last updated: September 1 2009 16:00
http://www.ft.com/cms/s/0/90e21fa0-96f1-11de-9c24-00144feabdc0.html
US manufacturing activity grew for the first time in more than a year and a half in August as bold government stimulus measures spurred a surge in new orders.
Separately on Tuesday, pending home sales rose to the highest level in more than two years as buyers were lured back to the market by first-time buyer tax credits while US construction spending slipped in July.
The Institute of Supply Management said on Tuesday that its survey for August rose from 48.9 to 52.9, beating economists’ expectations. The index surpassed 50, which signals expanding activity, for the first time in 19 months.
Manufacturers said they were experiencing greater demand from car makers due to the cash-for-clunkers rebate programme and that the sudden surge in demand had caused a shortage in supply of raw steel.
Last month, 11 of the 18 industries surveyed reported growth, led by textiles, apparel and paper. New orders jumped by 9.6 percentage points, rising to the highest level since December 2004.
Analysts have been waiting to see if the signs of life in manufacturing are sustainable, which ultimately depends on a return of consumer demand.
“The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand,” said Norbert Ore, ISM chairman.
The expansion in US manufacturing is a good sign for the overall economy. Mr Ore noted that if the current level of activity is maintained, US gross domestic product would expand at an annual rate of 3.7 per cent.
Meanwhile, the National Association of Realtors said on Tuesday that pending home sales jumped by 12 per cent year-on-year in July and rose by 3.2 per cent from June. Lawrence Yun, NAR’s chief economist, pointed to record levels of home affordability and the impact of government tax incentives as reasons the housing market was stabilising.
Compared with last year, sales were up by 4.7 per cent in the northeast, 8.1 per cent in the midwest, 12 per cent in the south and 20 per cent in the west.
“Even with a good recovery taking place, the market is not yet back to normal,” said Charles McMillan, NAR president. “With a gradual absorption of inventory, we are on the cusp of a general stabilisation in home prices.”
Rising sales failed to generate gains in construction spending in July as federal spending on schools and highways declined during the month. However, spending ticked up for privately funded residential and commercial building.
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