The Least, First

Monte Asbury's blog

Posts Tagged ‘Recession

G8 balks at fulfilling aid pledges; 10 million to die?

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May result in 11 million preventable deaths; only 2% of G20 stimulus package needed to keep promises. From an article by World Vision:
clipped from www.huffingtonpost.com
Today’s communiqué from the G8 leaders contains neither an acknowledgement they are off track on fulfilling their aid pledges, nor any concrete plans to get them back on track. In fact, there is now no way they can meet their 2005 promise to double aid for Africa by 2010.
This year’s failure is particularly significant as the current economic crisis means up to 2.8 million more children could die by 2015. That’s beyond the 9.2 million who die each year of preventable causes
Any excuse from G8 leaders that aid is unaffordable in an economic downturn is unacceptable. The 2005 G8 pledge of an extra $50 billion by 2010 is just 2% of the G20 stimulus package
Over the 48 hours of this summit 50,000 children will die from preventable causes. At least 50% of these will be in Sub-Saharan Africa. In the absence of urgent action by the international community this means over 9 million child deaths between now and the next G8 in Canada.
when the G8 chooses […]
it can make a real impact on child deaths.
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Ford CEO’s foresight may save the company

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When’s the last time you read an inspiring story about a U.S. automaker?

Today’s New York Times has one.

Turns out that Ford’s CEO, Alan Mulally, saw a crisis coming back in 2006.   He led the company into sweeping—and, no doubt, highly controversial—transformation:

clipped from www.nytimes.com

On Nov. 29, 2006, the Ford Motor Company made a surprising pitch to the nation’s biggest banks. In a packed ballroom at a New York hotel, Ford’s chief executive, Alan R. Mulally, said he would mortgage all the company’s assets for billions of dollars in loans to finance an overhaul of the troubled automaker.[…]
Although the economy was healthy then, Mr. Mulally said the money would give Ford “a cushion to protect for a recession or other unexpected event.” […]
[T]he $23.6 billion in loans it received turned out to be Ford’s saving grace […]
Ford, because of the money it borrowed in the private sector nearly three years ago, is in far better shape than its two crosstown rivals. The loans have kept it independent, and on a course to survive the worst new-vehicle market in nearly 30 years. […]
“It was a defining moment for us,” Mr. Mulally said in an interview. “But they never would have been willing to lend us the money if we weren’t on a different path.”  Ford has accelerated along that path, pursuing a top-to-bottom transformation into smaller cars, fewer brands, and a leaner cost structure. […]
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Ford Motor Company

Image via Wikipedia

Pretty courageous, seems to me. There’s lots more to the story – follow the link for many more intriguing details – but the upshot is that Ford today gets to say things like this:

“From Day One, we had no desire to access the government money,” […]

“Ninety-seven percent of the people know that Ford is not taking taxpayer money to create a viable company,” Mr. Mulally said. “This is America. This is about making products people want and being self sufficient.” […]

Think this CEO deserves a bonus?  He’s no saint, and he gets paid way too much money, and no one knows for sure yet if Ford can survive plunging car sales.

But at least he’s doing his job.

N.B.: The leave a comment button has moved to the top of each post.
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Why we need government to attack poverty, too

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In recessions, when more people need help, most donors have less to give.

Many not-for-profits simply collapse.  Those that remain often move away from long-term indepence-developing programs, crowded by the increase in immediate needs.

Richard Florida, the economic geographer who writes of places, people, and prosperity, described the situation like this:

clipped from www.creativeclass.com
Richard Florida, an American urban studies the...

Image via Wikipedia

I spent this weekend with a friend who’s a retired corporate CEO, has a personal foundation that
supports local and international projects, and is very savvy in business, finance, and nonprofits. He said he’s heard that as many as half of U.S. nonprofits (charities) will go out of business during the current downturn […]

  • Many foundations, having seen their endowments dive with the stock market, are cutting back on large grants. In addition, they’re moving from longer-range capacity-building grants to meeting people’s immediate needs (as one foundation director put it, from philanthropy to charity).
  • Arts organizations are seeing their donations and audiences shrinking. Seasons are being cut back, shows canceled. Some of the weaker players are seeking mergers or takeovers by larger organizations.
  • Safety net organizations like free clinics and food banks are flooded with not only the poor but the formerly middle class.
  • Capital building campaigns are dead in the water.
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    I’m no economist, but I see no means to sustain an attack on poverty without resources that are more stable and more broadly shared than voluntary contributions alone could ever be.

    Do you?


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    Bush recession different in size and substance

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    This recession is not only more serious than others of recent memory, but it affects different parts of the economy than previous ones have.  A couple of graphs show the former, and a few sentences, the latter:
    clipped from www.dailykos.com

    For the first time ever, more private-sector services [industry] jobs have been lost than goods-producing [manufacturing] jobs have been lost.
    Many of those lost jobs were in retailing, which has seen its largest job losses since the data collection began in 1939
    Some economists say many of those jobs will never come back as Americans wean themselves from the easy credit that’s fueled their consumption for the past 25 years.
    “A lot of them are gone for good,” said Nigel Gault, chief U.S. economist for IHS Global Insight, a major economic consulting firm. “The age of the U.S. and world economy being driven by the U.S. consumer may be in the past.”
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    UPDATE:  This morning, GM announced layoffs of an additional 10,000 workers.

    The President’s stimulus plan is, doubtless, far from perfect.  But it has the support of the most brilliant economists we have, including the Nobel laureate Robert Krugman (whose chief concern is that it is far too small).  Investing in the economy has the potential for paying the government back manyfold, even above the cost of borrowing.

    And another ten thousand people will be bringing bad news home to their families.

    Seems foolish to delay.


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    Written by Monte

    February 9, 2009 at 9:04 pm