Author Archives: Laura Hertzfeld

Checking in across the pond

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While the U.S. economy may be seeing a slight tick upward despite poor job numbers, in Europe, the Euro and other currencies are hitting lows against the dollar, and dividing the continent.

PRI reported today on a meeting of European finance ministers to assess the latest troubles.

Some countries such as France and Germany have climbed out of the recession, others have not, and that’s putting a strain on the Euro and the Eurozone governments.
Five Eurozone countries in particular are struggling with negative growth, high unemployment and soaring debt. Economists refer to them by the unfortunate acronym, PIGGS — that’s Portugal, Italy, Ireland, Greece and Spain.

The BBC’s Gavin Hewitt remarked on the current climate, and found that traditional European industrial leaders losing ground in industry.

China has taken over from Germany as the world’s largest exporter. In speech after speech you detect that Europe is racked with concern over its lack of competitiveness.

Europe is leading on green policy and environmental issues, but as talks in Copenhagen broke down last month, NPR/Foreign Policy commentator Jonathan Holslag noted that the continent may not have the economic strength to support the green trends it’s promoting for the rest of the world.

This ambition to turn the challenge of climate change into an opportunity for economic growth has been entirely missing in the European Union. When melting glaciers started to make newspaper headlines, Europe started to dream of making green power into a sort of soft power. It spent billions to profile itself as a clean-energy champion vis-à-vis China, India, and Brazil. This engagement certainly helped raise awareness, but at the same time Europe failed to engage its own member states.

But there’s one trend where Europe is consistently leading the pack: Fashion. There’s a hat craze that’s hitting Paris, Global Post reports, and these styles harken fashion back to a simpler time. Could berets be an economic indicator, too?

The giving text

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Earthquake in Haiti/ Credit: Matthew Marek, American Red Cross

Earthquake in Haiti/ Credit: Matthew Marek, American Red Cross

The devastating earthquake in Haiti has dominated headlines this week, and now we are learning where aid is going and how people are giving. The spread of information and opportunities to contribute to the cause online are more advanced than during any previous crisis – to date, over $5 million dollars has been raised from text message donation programs alone.

Scott Jagow at Marketplace explains how text donations work and why they may be turning “slacktivists” into activists.

Since the money is being billed to customers and collected later, the phone companies have to advance it to the Red Cross and the other organizations…. It also allows people to act immediately as the crisis is unfolding (when they are the most emotionally moved by it as well). The trick will be getting the money in place as quickly as the technology is allowing it to be donated, and of course, as with any natural disaster, properly accounting for it and spending it effectively.

Those text donations may take a little while to meet their destination — up to 90 days — as GigaOm reported, but surely the need will still be there. Social giving site MGive is even mapping where those text donations have come from.

Once the donation is made, where does it go? Doesn’t common sense dictate that Haiti would need goods and services before or in tandem with financial donations? GlobalPost says no – supplies and drugs clog up a system that’s trying to get sorted. After the Asian tsunami in 2004, there was a “mountain of materials that confounded the efforts of the pros, and made it more difficult to deliver essential supplies on the earthquake-ravaged roads.”

Under no circumstances should you mail care packages, toys, food or clothes. Don’t even think about sending drugs. The response to prior disasters shows that regardless of your intentions, you will only be making matters worse.

For a list of where to donate and how, PBS NewsHour has compiled a page of organizations sending relief funds directly to Haiti, including Wyclef Jean’s aid organization Yele, the American Red Cross, and Partners in Health.

In addition to donation resources, there are emerging ways of finding people and information coming out of Haiti.

The Miami Herald and WLRN are following Facebook messages from people in Haiti and Facebook is trying to unclog servers so people can find each other via groups.

A map at http://haiti.ushahidi.com/ plots incidents in Haiti as they occur and reports from workers and citizens.

NPR’s Twitter list aggregates updates from people in Haiti and organizations working in the region.

Money moves

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Last week, the “Move Your Money” campaign seemed to hit a fever pitch online, as our sister blog EconomyBeat.org reported. Starting with The Huffington Post and moving onto Twitter and Facebook, as well as various blogs, people were urging their friends to move their money into community banks, and out of the large banks that received TARP funding, in order to support Main Street over Wall Street.

This week, Seattle NPR station KUOW invited experts to respond to the Huffington Post-promoted idea, including Checkbook.org President Robert Krugoff and Rob Johnson, director of the Financial Reform Initiative.

President Obama’s small business legislation may help the Move Your Money cause, as this NewsHour report from just before Christmas found.

U.S. PRESIDENT BARACK OBAMA: I think it’s fair to say that most of these community banks were not engaged in some of the hugely risky activities that helped to precipitate the financial crisis.
JUDY WOODRUFF: To ease that crisis, the administration plans to pump $30 billion into a new small business lending program. And the Fed has tried to help by holding interest rates at practically zero.

Not everyone thinks moving to smaller banks is a good idea. The Atlantic’s Derek Thompson (who wrote in support of a bank tax on big banks to boost smaller ones) spoke to an unnamed finance expert in a blog post. The expert, whom Thompson calls “Dr. Gonzo” responds:

But I definitely think the small is better thing is pretty unfounded and runs contrary to common sense, specifically considering diversification. I mean, 2008 was all about market risk and assets hitting the floor at the same time. But just because diversification didn’t work as well as it should, doesn’t mean that it’s not useful. … The small bank thing is definitely fetishized, and IMHO, not based in any objective theory or evidence. It’s just an aesthetic people like to cling to.

For more background on how local bank franchises failed, Nightly Business Report in September looked at the community bank crisis.

Permanent vacation?

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While new fulltime jobs are at a virtual standstill, the jobs that are available are more flexible, with more and more people working temporary and contract jobs to make ends meet. But more varied work means it’s harder to take time off.

WNYC’s Brian Lehrer show spoke with Bloomberg BusinessWeek editor Peter Coy about the rise of the temp worker.

The uncertainty of temp work isn’t helping us to relax. Minnesota Public Radio’s In the Loop talked to a pair of vacation experts, who mused about the shortcomings of vacation policies at U.S. companies.

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But if you are among the lucky few with time to take off, now may be the best time to start using those credit card reward points, as new programs are aimed at those trying to save money and take vacation, PBS’s Nightly Business Report notes.

Card issuers are always looking for the newest “hook” to entice consumers to choose their cards over the hundreds of other reward programs available. To do that, they look to trends in the economy. Economy booming? Offer cards that reward spending. Times are tight? Appeal to the budget conscious.

Fees, keys and ripped up tees

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It hasn’t been an upbeat start to 2010.

A blog post on NPR this morning pointed out that while the December jobless rate was higher than economists anticipated, it would have been EVEN HIGHER if those who’d dropped out of the market all together had been counted. And talk of a new recession for 2010 was the headline on a NewsHour analysis piece this week.

A range of issues indicate recessionary trends from reports at stations around the country:

Minnesota Public Radio reported on “Cash for Keys” plans, where lenders pay former – and busted — homeowners to surrender their keys faster. These systems have cropped up across the country, with some success.

Cash for keys has been around for years, he says, and it’s increased with the jump in foreclosures.

On the health care front, as a national bill moves through Congress, WSIU in Illinois reported on a new bill in the state that allows young people up to age 24 to stay on their parents’ health insurance, costing the state nothing but charging fees to those families that wish to keep their grown kids covered.

Many people shop at discount retailer H&M to save some money on fashionable clothes, particularly as little luxuries are less affordable. But reports this week about the chain ripping up old clothes, making them unwearable, rather than donating them to charity had the Web up in arms.

But maybe being in the dumps isn’t all bad. Creating more waste is actually a GOOD economic indicator, according to a story from WIUM in western Illinois. A waste management expert told the station:

“A trash collection report is one of the strongest economic indicators. When more waste is collected in an area, in this case western Illinois, that means more people are staying home. But at the same time, they’re buying things close to home.”