Test your understanding of economics in the news: Is this a change in supply or a change in demand?

In the January 6, 2010 article "Cold grips much of US, Fla. races to save crops," Associated Press writer Melissa Nelson reports that freezing temperatures in Florida might destroy "millions of dollars' worth of strawberries and other crops."

Using the ceteris paribus assumption that ignores other potential changes, what is the likely effect on the market for strawberries if the freeze destroys the ones grown in Florida.

Is this change in the strawberry market (a) an increase in the supply of strawberries, (b) a decrease in the supply of strawberries, (c) an increase in the demand for strawberries, or (d) a decrease in the demand for strawberries? Will the equilibrium price of strawberries increase or decrease as a result of the damage from cold temperatures?

Read the article below and then illustrate this price change with a graph that shows the initial positions of the supply and demand for strawberries and the new positions of the supply and demand curves. (Hint: Only one of the curves shifts.) There is a link at the bottom that provides the answer.

PENSACOLA, Fla. – A stubborn cold wave locked freezing temperatures in place across the central and eastern U.S. Wednesday as far south as Florida, where farmers worked to salvage millions of dollars' worth of strawberries and other crops.

Arctic air was expected to hover through the weekend. In a rare turn for the South, forecasters warned that snow and ice were possible Thursday from South Carolina to Louisiana and wind chills in the region could get down to near zero at night.

In central and south Florida, farmers were trying to salvage citrus and vegetable crops by spraying them in protective layers of ice and covering them in plastic. Florida Gov. Charlie Crist signed an executive order Wednesday that gave the state's Division of Emergency Management and other agencies the authority to provide farmers with assistance.

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Test your understanding of economics in the news: Is this a change in supply or a change in demand?

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In the January 6, 2010 Wall Street Journal article "Cramped on Land, Big Oil Bets at Sea," Ben Casselman and Guy Chazan report that oil companies exploring in deep ocean waters have discovered "unexpectedly large quantities of oil -- oil that only they have the technology and financial muscle to find and produce."

Using the ceteris paribus assumption that ignores other potential changes, what is the likely effect of this discovery on the market for oil?

Is this change in the oil market (a) an increase in the supply of oil, (b) a decrease in the supply of oil, (c) an increase in the demand for oil, or (d) a decrease in the demand for oil? Will the equilibrium price of oil increase or decrease as a result of these newly found oil reserves?

Read the article below and then illustrate this price change with a graph that shows the initial positions of the supply and demand for oil and the new positions of the supply and demand curves. (Hint: Only one of the curves shifts.) There is a link at the bottom that provides the answer.

Big Oil never wanted to be here, in 4,300 feet of water far out in the Gulf of Mexico, drilling through nearly five miles of rock.

It is an expensive way to look for oil. Chevron Corp. is paying nearly $500,000 a day to the owner of the Clear Leader, one of the world's newest and most powerful drilling rigs. The new well off the coast of Louisiana will connect to a huge platform floating nearby, which cost Chevron $650 million to build. The first phase of this oil-exploration project took more than 10 years and cost $2.7 billion -- with no guarantee it would pay off.

Chevron came here, an hour-long helicopter ride south of New Orleans, because so many of the places it would rather be -- big, easily tapped oil fields close to shore -- have become off-limits. Western oil companies have been kicked out of much of the Middle East in recent decades, had assets seized in Venezuela and seen much of the U.S. roped off because of environmental regulations. Their access in Iran is limited by sanctions, in Russia by curbs on foreign investment, in Iraq by violence.

So, Chevron and other major oil companies are moving ever farther from shore in search of oil. That quest is paying off as these companies discover unexpectedly large quantities of oil -- oil that only they have the technology and financial muscle to find and produce.

In May, the first wells from Chevron's latest Gulf of Mexico project came online. The wells are now pumping 125,000 barrels of oil a day, making the project one of the gulf's biggest producers. In September, BP PLC announced what could be the biggest discovery in the gulf in years: a field that could hold three billion barrels.

Beyond the Gulf of Mexico, companies have announced big finds off the coasts of Brazil and Ghana, leading some experts to suggest the existence of a massive oil reservoir stretching across the Atlantic from Africa to South America. Production from deepwater projects -- those in water at least 1,000 feet deep -- grew by 67%, or by about 2.3 million barrels a day, between 2005 and 2008, according to PFC Energy, a Washington consulting firm.

The discoveries come as many of the giant oil fields of the past century are beginning to dry up, and as some experts are warning that global oil production could soon reach a peak and begin to decline. The new deepwater fields represent a huge and largely untapped source of oil, which could help ease fears that the world won't be able to meet demand for energy, which is expected to grow rapidly in coming years.

For oil companies, the discoveries mean something more: After a decade of retreat, large Western energy companies are taking back the lead in the quest to find oil. "A lot of people can get the very easy oil," says George Kirkland, Chevron's vice chairman. "There's just not a lot of it left."

There are challengers to Big Oil's deepwater dominance. Brazil recently has moved to give a larger share of its offshore oil to its state-run oil company, Petrobras. A handful of smaller companies, such as Anadarko Petroleum Corp. and Tullow Oil PLC, have had success offshore, particularly in Ghana, where giants like BP and Exxon Mobil Corp. are now playing catch-up.

The enormous investments of time and money required for such projects have made many experts skeptical that they can ease the long-term pressure on global oil supplies. The scale of the projects means that few smaller companies have the resources to take them on. Devon Energy Corp., an independent producer based in Oklahoma City, recently announced plans to abandon its deepwater-exploration business to focus on less-expensive onshore projects, which is says will produce a better return.

"This is technology capable of going to the moon," says Robin West, chairman of consulting firm PFC Energy, involving "extraordinary uncertainty, immense levels of information processing, staggering amounts of capital."

Offshore drilling is almost as old as the oil industry itself. In the 1890s, companies began prospecting for oil from piers extending off the beach near Santa Barbara, Calif. Gulf Oil drilled the world's first fully offshore well from cedar pilings on a shallow lake near Oil City, La., in 1911.

From there, the industry pushed gradually outward, from the Louisiana bayous in the 1920s into the Gulf of Mexico, where Kerr McGee drilled the first well out of sight of land in 1947.

The push into deeper water has come in the past decade.

"What has enabled us to do that is technology," says David Rainey, BP's head of exploration for the Gulf of Mexico. "We have been pushing the limits of seismic-imaging technology and drilling technology."

Perhaps a bigger reason for the recent emphasis on deepwater exploration is that companies had few other places to go. In the early decades of oil exploration, Western companies were the only ones with the technology to manage big oil projects. But as technology spread and state-run oil companies became more sophisticated, foreign governments have relied less on outside help and have demanded greater control of their own oil resources.

With a few exceptions, state-run companies have largely stayed out of the deep water, with its enormous technical challenges and multibillion-dollar investment requirements. Western companies have steadily pushed farther offshore, not just in the Gulf of Mexico but in places like Nigeria, Malaysia, Norway and Australia.

At the same time, traditional oil fields have begun to dry up. In Mexico, the world's seventh-largest oil producer, daily production has dropped 23% since 2004 as output from its giant Cantarell field fell sharply. Other countries have seen their own, mostly smaller, declines.

Falling output from old fields has stoked fears that world-wide production could be nearing its peak. Global oil reserves -- a measure of oil that has been found but not yet produced -- fell in 2008 for the first time in a decade, according to BP's annual statistical review. Moreover, there are signs demand could soon catch up to supply. Global oil consumption has risen by 5.4 million barrels a day in the past five years, while production has risen by just 4.8 million barrels a day.

Such fears helped drive a rapid run-up in oil prices to nearly $150 a barrel in July 2008. The global recession cooled demand, driving down prices, although many experts expect prices to rise again when the economy recovers. Already, prices have rebounded to about $80 a barrel, from under $35 in December 2008.

Rising prices have spurred offshore exploration. By 2008, about 8% of global oil production came from deepwater fields.

Yet even the biggest deepwater projects aren't enough to put a dent in global supply problems on their own. The world's largest deepwater platform, BP's Thunder Horse in the Gulf of Mexico, produces 250,000 barrels of oil a day, just 0.3% of global consumption.

"These discoveries are changing the debate," says Ed Morse, chief economist for LCM Commodities, a brokerage firm. What remains unclear, he says, is whether the deepwater projects will ensure that new discoveries continue to meet demand.

Many in the industry argue the new fields have expanded the limits of where the industry can find oil, potentially delaying a decline in global production.

"There are vast unexplored areas in deep water, so tremendous opportunities for growth," says Steven Newman, president of Transocean Ltd., which owns the Clear Leader rig.

The push into deeper water hasn't always been smooth sailing. Offshore projects are expensive, time-consuming and prone to failure. Chevron boasts of a 45% exploration overall success rate in recent years, a remarkable run by industry standards, but one that also means the company has spent billions on projects that haven't panned out.

Chevron's successes have outweighed its failures. It was expected to be the fastest-growing big oil company in 2009, as measured by oil production, in large part because of new offshore projects in the Gulf of Mexico and off Brazil. Other companies that have embraced offshore exploration, such as BP, are also seeing big growth, while those that haven't are scrambling.

Exxon, which hasn't emphasized deepwater exploration as much as competitors, recently offered $4 billion for a stake in an oil field off the coast of Ghana.

Chevron made its big offshore bet in the 1990s, when it began buying up leases in the Gulf of Mexico that were in such deep water, the technology didn't yet exist to drill there. Confident that technology would catch up, the company in 1996 bid in and won a U.S. government auction for the right to explore for oil in several areas of the gulf, in hopes that a fraction would turn into producing fields.

Chevron then spent six years analyzing its new holdings, figuring out which were most likely to hold oil. The key tool in its arsenal: seismic imaging, a sonar-like process in which sound waves are shot into the rock, and their echoes are picked up by sensors on the surface.

Adding to the challenge: The oil that Chevron was pursuing lay beneath a thick layer of salt, which disrupts seismic sound waves and blurs the images like a smudge on a camera lens. The company had to analyze the data with supercomputers to clear up that distortion.

The analysis revealed a potentially huge oil reservoir. Even so, Chevron estimated it had only a one-in-eight chance of finding commercial quantities of oil. The only way to know for sure was to drill.

So, in 2002, Chevron spent about $100 million to sink its first well in the field, which came to be known as Tahiti. That well needed to hit a 200-foot-long target from five miles away -- akin to hitting a dart board from a city block away.

"You have to roll the dice, and the dice roll now is north of $100 million," says Gary Luquette, president of Chevron's North American exploration and production division.

Chevron's first Tahiti well struck enough oil to make it worth more drilling to see how big the field might be. By 2005, the company had learned enough to go forward with the project. That required building a 700-foot-tall, 45,000-ton floating oil-production platform, and drilling a half dozen wells to feed oil to it. Tahiti produced its first commercial quantities of oil in May.

On a recent morning, the Clear Leader rolled on the waves 190 miles south of New Orleans, held almost perfectly in place by its satellite-controlled navigation system and six Korean-made engines.

In a cabin on the ship's deck, a team of drillers in coveralls monitored computer terminals as they used joysticks to control a drill bit more than 12,800 feet below. The oil they were targeting lay another 14,000 feet underground -- an easy reach for a ship that can drill down 7.5 miles.

The well is part of a second phase of the Tahiti project, which will require drilling several more wells and expanding the floating platform -- an additional $2 billion in spending, still with no guarantee of success.

Kevin Ricketts, a Chevron engineer who worked on both phases of the Tahiti project, recalled looking up at the massive platform while it was still on shore, and reflecting on how his team's analysis had led to its construction.

"I'd never seen anything that big," Mr. Ricketts said. "I thought, holy moly, our production forecast led to that thing being built. I sure hope we're right."

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Americans' job satisfaction falls to record low

In the January 5, 2010 article "Americans' job satisfaction falls to record low," Associated Press economics writer Jeannine Aversa reports that a "survey says American workers can't get no job satisfaction; recession partly to blame."

WASHINGTON (AP) -- We can't get no job satisfaction.

Even Americans who are lucky enough to have work in this economy are becoming more unhappy with their jobs, according to a new survey that found only 45 percent of Americans are satisfied with their work.

That was the lowest level ever recorded by the Conference Board research group in more than 22 years of studying the issue. In 2008, 49 percent of those surveyed reported satisfaction with their jobs.

The drop in workers' happiness can be partly blamed on the worst recession since the 1930s, which made it difficult for some people to find challenging and suitable jobs. But worker dissatisfaction has been on the rise for more than two decades.

"It says something troubling about work in America. It is not about the business cycle or one grumpy generation," says Linda Barrington, managing director of human capital at the Conference Board, who helped write the report, which was released Tuesday.

Workers have grown steadily more unhappy for a variety of reasons:

-- Fewer workers consider their jobs to be interesting.

-- Incomes have not kept up with inflation.

-- The soaring cost of health insurance has eaten into workers' take-home pay.

If the job satisfaction trend is not reversed, economists say, it could stifle innovation and hurt America's competitiveness and productivity. And it could make unhappy older workers less inclined to take the time to share their knowledge and skills with younger workers.

Nate Carrasco, 26, of Odessa, Texas, says he's been pretty unhappy in most of his jobs, including his current one at an auto parts store.

"There is no sense of teamwork in most places any more," Carrasco gripes.

When the Conference Board's first survey was conducted in 1987, most workers -- 61 percent -- said they were happy in their jobs. The survey of 5,000 households was conducted for the Conference Board by TNS, a global market research company.

One clue that may explain workers' growing dissatisfaction: Only 51 percent now find their jobs interesting -- another low in the survey's 22 years. In 1987, nearly 70 percent said they were interested in their work.

Workers who find their jobs interesting are more likely to be innovative and to take the calculated risks and the initiative that drive productivity and contribute to economic growth, Barrington says.

"What's really disturbing about growing job dissatisfaction is the way it can play into the competitive nature of the U.S. work force down the road and on the growth of the U.S. economy -- all in a negative way," says Lynn Franco, another author of the report and director of the Conference Board's Consumer Research Center.

Conference Board officials and outside economists suggested that weak wage growth helps explain why workers' unhappiness has been rising for more than 20 years. After growing in the 1980s and 1990s, average household incomes adjusted for inflation have been shrinking since 2000.

Also, compared with 1980, three times as many workers contribute to the cost of their health insurance -- and those contributions have gone up. The average employee contribution for single-coverage medical care benefits rose from $48 a month to $76 a month between 1999 and 2006.

Workers under 25 expressed the highest level of dissatisfaction. Roughly 64 percent of workers under 25 say they were unhappy in their jobs. The recession has been especially hard on young workers, who face fewer opportunities now and lower wages, some analysts say.

The most satisfied were those ages 25 to 34, who may see some opportunities for upward mobility as baby boomers retire. Around 47 percent of workers 25 to 34 say they were happy in their jobs.

Some other key findings of the survey:

-- Forty-three percent of workers feel secure in their jobs. In 2008, 47 percent said they feel secure in their jobs, while 59 percent felt that way in 1987.

-- Fifty-six percent say they like their co-workers, slightly less than the 57 percent who said so last year but down from 68 percent in 1987.

-- Fifty-six percent say they are satisfied with their commute to work even as commute times have grown longer over the years. That compares with 54 percent in 2008 and 63 percent in 1987.

-- Fifty-one percent say their are satisfied with their boss. That's down from 55 percent in 2008 and around 60 percent two decades ago.

Carrasco said he wishes his bosses would take time to listen to workers' ideas -- and their difficulties on the job.

"Most of the time they only listen to what their bosses are saying," he says. "Bosses need to come down to the employee level more and see what actually goes on, versus what their paperwork tells them is happening in the stores."

It wouldn't be fair to blame low job satisfaction solely on bad bosses, Barrington says.

"It is two-way responsibility," she says. "Workers also have to figure out what they should be doing to be the most engaged in their jobs and the most productive."

Lax Oversight Caused Crisis, Bernanke Says

In the January 4, 2010 New York Times article "Lax Oversight Caused Crisis, Bernanke Says," Catherine Rampell reports that the Federal Reserve chairman blames regulatory failure for the economic decline of recent years:

ATLANTA — Regulatory failure, not low interest rates, was responsible for the housing bubble and subsequent financial crisis of the last decade, Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Sunday.

Mr. Bernanke’s remarks, perhaps his strongest language yet assessing the roots of the financial crisis, came as he awaited confirmation for a second term as Fed chairman and as he sought greater regulatory authority from Congress.

“Stronger regulation and supervision aimed at problems with underwriting practices and lenders’ risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates,” Mr. Bernanke said in remarks to the American Economic Association.

Mr. Bernanke, addressing accusations that the Fed contributed to the financial crisis, argued in his speech that the interest rates set by the central bank from 2002 to 2006 were appropriately low. He was a member of the board of governors of the Federal Reserve system for most of that period.

“When historical relationships are taken into account, it is difficult to ascribe the house price bubble either to monetary policy or to the broader macroeconomic environment,” Mr. Bernanke said.

Some lawmakers and economists have argued that the Fed kept interest rates too low in the aftermath of the 2001 recession, making loans cheap and feeding reckless lending by banks.

“I strongly disapprove of some of the past deeds of the Federal Reserve while Ben Bernanke was a member and its chairman, and I lack confidence in what little planning for the future he has articulated,” Richard Shelby of Alabama, the Senate Banking Committee’s top-ranking Republican, said in December during a committee vote on Mr. Bernanke’s reconfirmation.

The Senate Banking Committee approved Mr. Bernanke’s renomination last month. He is expected to be reconfirmed by the full Senate before his current term expires on Jan. 31, despite some vocal opposition.

Even if confirmed, however, Mr. Bernanke is likely to face further political challenges over financial regulatory reform and the governance of the Fed.

The House passed a provision to audit the Fed as part of a larger financial reform package last month. Representative Ron Paul, Republican of Texas, has been carrying the banner for such an audit for decades.

The debate over what caused the financial crisis comes as the economy shows signs of recovery and as Congress considers a wide-ranging overhaul of financial regulation.

In a separate talk on Sunday at the conference, Donald L. Kohn, the Fed’s vice chairman, listed several measures the central bank was likely to take to shed the problematic assets it took from banks during the financial crisis. He said “the appropriate use and sequencing of these tools is under active discussion” by regulators.

But, as members of the rate-setting Federal Open Market Committee said last month, he noted that the fragile economic recovery and weak job market would “warrant exceptionally low” interest rates “for an extended period.”

Mr. Bernanke, in his talk, echoed his previous calls for Congress to grant the Fed greater oversight powers over the financial system, like the ability to help monitor and regulate against “systemic risk.”

The implication is that the Fed believes that regulation and supervision, rather than tighter monetary policies, should be used to address asset bubbles in the future.

Mr. Bernanke has pointed to the Fed’s extraordinary efforts to stem the crisis, including the creation of new lending vehicles to banks and a reduction of bank-to-bank interest rates to virtually zero, as evidence that the Fed has a firm grasp of what the economy needs. The Fed’s handling of the crisis has been widely praised by economists.

The Treasury and other government agencies already have supervisory power over parts of the financial system, but so, too, does the Federal Reserve.

In his talk on Sunday, Mr. Bernanke acknowledged as much, rattling off a list of regulatory efforts the bank made to address nontraditional mortgages and poor underwriting practices.

But, he said, “these efforts came too late or were insufficient to stop the decline in underwriting standards and effectively constrain the housing bubble.”

Networks blur policy of not paying for interviews

In the January 3, 2010 article "Networks blur policy of not paying for interviews," Associated Press television writer David Bauder reports that media payments for subjects of interviews is questioning the integrity of news media:

NEW YORK – Policies forbidding payment for news interviews increasingly seem like the network television equivalent of the 55 mph speed limit: a rule often winked at unless you're heading into a speed trap.

Three of the past month's accidental celebrities — Jasper Schuringa, who helped thwart an attack on a Detroit-bound plane; David Goldman, who took a custody fight for his son to Brazil; and the White House party-crashing Salahis — have either sought or received goodies from TV networks eager to hear their stories.

Schuringa gave interviews to outlets that had agreed to purchase blurry cell phone images he'd taken of a man who authorities say tried to use explosives to take down the plane. Goldman and his son accepted NBC's offer of a ride home from Brazil on a charter airplane.

Representatives for Michaele and Tareq Salahi, who embarrassed the Obama administration by sneaking into a state dinner, were reportedly seeking six-figure bids from networks to tell their story.

"I don't know if people would have thought of that in the past," said Andy Schotz, head of the ethics committee for the Society of Professional Journalists. "But now often the first thing people think of is to get a publicist, a lawyer and an agent and figure out how to make money" from instant notoriety, he said.

The society condemned NBC for "checkbook journalism" with the Goldman trip. NBC said it had already chartered a plane to bring its personnel back from Brazil, and Goldman's lawyer said the invitation was accepted so father and son could avoid being accosted by multiple camera crews on the way home.

But NBC took multiple pictures and interviewed Goldman on the plane before his exclusive "Today" interview with Meredith Vieira. And the network seems immune to the industry's financial troubles: A chartered jet from Brazil to New York would cost about $90,000, according to Blue Star Jets, a New York-based charter company. Going commercial, a coach seat runs under $1,400.

Policies against paying for interviews are in place to avoid distorting the news. The concern is that news subjects will change their stories to make them more valuable or please those who paid them.

Evasion efforts seem centered primarily on ultra-competitive morning news shows and prime-time magazines. These outlets now fight for stories that might have been considered tabloid fodder years ago, often against Web sites or other outlets that won't hesitate to pay for an interview or information.

News organizations now frequently pay interview subjects for the use of personal photos or videos. Both CNN and ABC paid for a Schuringa photo, reportedly thousands of dollars, and insisted they were not paying for an interview. Yet Gawker.com said Shai Ben-Ami, a Schuringa friend who was helping arrange media appearances, made it clear the Dutch hero wouldn't speak to an outlet that didn't buy rights to a photo. Ben-Ami would not comment to The Associated Press.

It's an increasingly easy dodge in these days of cell phone cameras, when there are usually visual images available to accompany an interview.

Morning shows will often bring an interview subject to New York and cover expenses. (It's not payment for an interview, but it can be a nice vacation.)

Networks can skirt ethics policies by putting their entertainment divisions in charge of an interview, said Nicolla Hewitt, a longtime network news booker. These would seem most likely in cases involving major celebrities.

"Do I think it's right? No," Hewitt said. "But is it the new reality? Yes."

Paul Friedman, a veteran news executive and CBS News senior vice president, said there's a generational change with more people in the industry who argue that the old standards are too rigid.

The Schuringa case led Foster Kamer, a Gawker writer, to mock the network news divisions. Gawker has acknowledged that it paid for a story last fall where a collaborator to Richard Heene provided evidence that the "balloon boy" episode was a hoax.

"Mainstream outlets who hold themselves in higher regards than those (like ours) who openly admit ponying up for a story are doing the same thing themselves, the sole difference being: We don't feel the need to lie about it," Kamer wrote. "Why do they?"

Paul Levinson, head of the communications department at Fordham University, said he's been paid for interviews by the British Broadcasting Corp. ("I'm not allergic to money," he said.) He said he can't recall a case where the story was distorted because money was exchanged and argues that the policy doesn't make sense.

"It has always been the case that our free press operates in a capitalist economy — meaning money is involved, whether we like it or not," he said.

Networks have a cadre of paid consultants, like former generals or national security experts who share insights when a complicated story breaks that involves their topic. There was a time they'd do it for free for the attention it offered, Friedman said.

Even with policies in place that prohibit payment of interview subjects, it's interesting how many news subjects think they can cash in. And how quickly: Schuringa had wrestled with the Detroit terror subject and dragged him to the front of the plane yet still had the presence of mind to snap photos when authorities came.

It's hard to know how frequently evasion practices are taking place, said Kelly McBride, ethics group leader at the Poynter Institute think tank. They don't usually become known unless the interview subjects talk about it or disgruntled network officials leak the news, as happened with the Salahis.

Reporters at local TV stations or newspapers that don't pay for interviews are more frequently meeting news subjects who won't talk unless they're paid, McBride said.

"If we all drew a line again, maybe we could stop this," Friedman said. "But that's probably hopelessly naive. It's out of the bottle."
___
On the Net:
http://www.gawker.com

Fed Chairman Bernanke argues for increased regulation of financial markets

In the January 3, 2010 article "Fed: Regulation 1st defense against speculation," Associated Press economics writer Jeannine Aversa reports that Federal Reserve Chairman Ben Bernanke argues increased regulation of financial markets is necessary to avoid future economic crises:

WASHINGTON – Stronger regulation is the best way to prevent financial speculation from getting out of hand and throwing the economy in a new crisis, Federal Reserve Chairman Ben Bernanke said Sunday.

But he didn't rule out higher interest rates to stop new speculative investment bubbles from forming.

The Fed chief's remarks were his most extensive on the subject since the housing market's tumble led to the gravest financial crisis since World War II — and perhaps the worst in modern history, in his view.

Critics blame the Fed for feeding that speculative boom in housing by holding interest rates too low for too long after the 2001 recession.

But Bernanke, in a speech to the American Economic Association's annual meeting in Atlanta, defended the central bank's actions. Extra-low rates were needed to get the economy and job creation back to full throttle after the Sept. 11 attacks and accounting scandals that rocked Wall Street, he said.

Bernanke said the direct links were weak between super-low interest rates and the rapid rise in house prices that occurred at roughly the same time. The stance of interest rates during that period "does not appear to have been inappropriate," he said.

Still, the enormous economic damage from the housing bust — the longest and deepest recession since the 1930s and double-digit unemployment — shows how important it is to guard against a repeat, Bernanke said.

"All efforts should be made to strengthen our regulatory system to prevent a recurrence of the crisis, and to cushion the effects if another crisis occurs," he said.

"However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous buildups of financial risks, we must remain open to using monetary policy as a supplementary tool," he added.

Speculative excesses are not easy to pinpoint in their early stages, he said, and using higher interest rates to combat them can hurt the economy.

For instance, rate increases in 2003 and 2004 to constrain the housing bubble could have "seriously weakened" the economy just when a recovery from the 2001 recession was starting, he said.

To help the country emerge from that recession, the Fed under then-Chairman Alan Greenspan cut its key bank lending rate from 6.5 percent in late 2000 to 1 percent in June 2003. It held rates at what was then a record low for a year. It's this action that critics blame for feeding the housing speculation.

Bernanke, however, said the expansion of complex mortgage products and the belief that housing prices would keep rising were the keys to inflating the housing bubble. As a result, lenders made home loans to people to finance houses they couldn't afford.

The Fed in 2005 did crack down on dubious mortgage practices and the type of mortgages blamed for the crisis. Bernanke acknowledged that these efforts "came too late or were insufficient to stop the decline in underwriting standards and effectively constrain the housing bubble."

Still, Bernanke said the lesson learned from the crisis isn't that regulation is ineffective but that regulation "must be better and smarter."

However, the Fed's regulatory lapses and its failure to spot problems leading up to the crisis have spurred efforts in Congress to rein in the Fed's powers and subject it to more oversight. Bernanke, who has been tapped by President Barack Obama to a second term as Fed chief, faces a contentious confirmation in the Senate.

During a brief question-and-answer session after his speech, Bernanke didn't talk about current economic conditions or the future course of interest rates.

When the Fed meets later this month, it is expected to keep its key bank lending rate at a record low, near zero. The big question is whether the Fed will provide clues at that time about when it will need to start raising rates to prevent inflation from taking off.

Some analysts worry that the Fed, which has held rates at record lows since December 2008, could be fueling a new speculative period and potentially a future economic crisis.

Looking back, Bernanke suggested the Fed might have underestimated the full force of the recession, which struck in December 2007. "It turns out the recession was worse than we thought at the time," he said.

After four straight losing quarters, the economy finally grew from July through September last year. Much of that growth, though, came from government-supported spending on homes and cars. There's concern about how vigorous the recovery will be once government supports are removed later this year.

High Unemployment is Associated with Increases in Crimes - Such as Cattle Rustling

In the January 3, 2009 article "Rustlers ride wideopen range of Great Basin," Associated Press writer Jeff Barnard reports:

FRENCHGLEN, Ore. – Cruising down a two-lane blacktop where the Catlow Rim drops down into a broad valley of sagebrush and bunchgrass, ranch manager Stacy Davies pulls his pickup over to let pass a herd of young bulls being trailed along the road by a couple of his buckaroos, as ranch hands are called here.

Arriving at the corrals at Three Mile Creek, Davies opens the tailgate on the gooseneck trailer hitched to his pickup, leads his horse into the cold hard sunshine, and swings up into the saddle to cut out cattle destined for shipment to market.

Two springs ago, Davies pulled up to these same corrals to find that dozens of weaned calves were gone, rustled, with truck tracks half-stomped by the remaining cattle the only clue to what had happened.

Out of pride and a reluctance to point a finger at neighbors, ranchers in the vast Great Basin outback where Oregon, Idaho and Nevada come together have been slow to admit that someone in their midst, perhaps even someone they know from barbecues and brandings, has been stealing cattle. Just who is doing it, and how they have gotten away with it for at least three years, remains a mystery.

"There's a lot of men who have worked these various ranches, moved from ranch to ranch and know this country well, who would be capable of such activity," said Davies, manager of Roaring Springs Ranch, which covers 1.1 million acres of private and federal range. "They know when we are at ballgames, they know when we're at church. They know where the animals are at."

Last summer, pushed by Jordan Valley rancher Bob Skinner, a past president of the Oregon Cattlemen's Association, ranchers overcame their reluctance to talk and started sharing information with law enforcement and each other. It quickly became clear that more than 1,200 cattle worth about $1 million had disappeared, far more than could be accounted for by the bones that dot this harsh country, or strays joining a neighbor's herd.

That would make this the rustling hotspot of the nation, said Rick Wahlert, Colorado state brand commissioner and secretary of the International Livestock Identification Association. The group's members in 20 states and three Canadian provinces have reported about 500 cattle thefts a year the past two years, up from 150 a year.

The association believes the jump in rustling is apparently spurred by the hard economic times, he said.

Rancher Skinner urged an aggressive new attitude among his far-flung neighbors, and he organized regular meetings to raise the profile on rustling. Once the cattlemen began admitting their losses, the numbers snowballed. The county sheriffs realized for the first time they had a major problem.

"Cattle theft — rustling — is not just something you read about in old Western magazines or watch in the Western movies you see," said Ed Kilgore, sheriff of Nevada's Humboldt County. "I really believe it's going on with people riding horses like in the old days, gathering cattle and taking them to a place they can load them up on transport."

With cows worth as much as $1,200 apiece, and calves $650, the losses mounted quickly, Skinner said. Despite struggling with their losses and the recession, ranchers have kicked in close to $60,000 in reward money to back a wanted poster circulating with the brands of stolen cattle.

Ranchers are keeping closer watch on their cattle, even with hidden cameras, and taking counts every time a herd moves through a gate, so they can report a theft sooner.

"The worst thing we can do is just to not say anything and hope they show up, then four or five or who knows how many months later go, 'Oh my gosh, I'm missing a bunch,' and by then there's no more smoking trail," Skinner said.

Once the stolen cattle are loaded on a truck, there is no telling where they might end up. They could be driven in a matter of hours to be sold in a state like Kansas with no brand laws, said Wahlert.

Or they could be hidden out in a remote pasture to produce their calves year after year, which could easily be branded and sold, said Idaho brand inspector Larry Hayhurst.

"There are a lot of ways to beat the system," he said.

This high desert country has fed cows since the early 1870s, when California cattle barons who struck it rich feeding gold miners first trailed their herds here. Even today, cattle outnumber people 1,000 to one, and it can take 40 acres to feed one cow and its calf for a month.

Buckaroos, a corruption of the Spanish word vaquero, follow many of the Old California traditions, braiding their own bridles and hackamores, and throwing long ropes that give them more room to slow a calf without hurting their horse.

Bred cows are turned loose on rangeland far from home and left on their own for months at a time. The only good count of what the weather, predators, disease, poisonous weeds and now rustlers have left comes at the fall gather.

Kilgore said they have established the rustling is real, but have little hard evidence to target any suspects.

The Roaring Springs theft from corrals next to a paved highway was the exception. Most cattle have disappeared from remote valleys where no one lays eyes on them for months at a time.

Jordan Valley ranchers Rand and Jane Collins swim their cows across the Owyhee River to get them to their federal allotment in February, and don't see them again until June or July, when they brand the new calves.

Rand Collins figures about 90 mother cows were stolen in the spring of 2007, though it was fall before he could be sure they weren't just lost. All carried the box-slash brand — a square with a diagonal line inside. The fact the cows had yet to drop their calves made them easier to handle on the long drive _three to five days — to a gravel road where they could be loaded on trucks. And it gave the rustlers 90 calves with no brands.

"It's not the kind of thing you like to admit," Rand Collins said. "There's always the chance as the season goes along that the cattle will turn up, and then you look like a fool for crying wolf."

Malheur County Sheriff Andrew Bentz figures the rustlers are a small group, more like a family than a gang, with the horseback skills to drive a herd hundreds of miles in rough country to read a road good enough to handle a cattle truck.

Chances of catching them in the act are slim in this wide-open country, he said.

"It's a long and methodical process of following money and the animals themselves," he said. "When the rustlers are named the people who are arrested will be no surprise to anybody. Nobody falls in out of Mars and takes care of this business."

When the fall gather came in this year, the losses appeared to be down, leading several ranchers to figure the rustlers are feeling the heat and laying low.

"We catch guys stealing stuff all the time. Those are onesy-twosy guys," said Idaho Brand Inspector Larry Hayhurst. "This is something different.

"They have a system down to beat this system. They have it figured out. We've just got to figure out what they're doing. Sooner or later we'll find out."

Will latest jobs bill really produce jobs?

In the January 3, 2010 article "Will latest jobs bill really produce jobs?," Associated Press writer Jim Abrams outlines opposing sides in the Congressional battle over U.S. government efforts to increase employment:

WASHINGTON – When the Senate takes up a jobs bill later this month or early in February, the debate will center on whether it really will create jobs and be worth plunging the government tens of billions of dollars further into debt.

Republicans scoff at the "Jobs for Main Street Act" title that House Democrats put on their $174 billion package last month. They refer to it as "son of the stimulus," the $787 billion economic recovery plan of nearly a year ago that they say was ineffective at producing jobs.

In its last vote of 2009, the House narrowly passed the bill, 217-212, without a single Republican supporter.

Democrats tick off the job prospects from the House bill's $75 billion in infrastructure and public sector spending: tens of thousands of new construction jobs, 5,500 more police officers, 25,000 additional AmeriCorps members, 250,000 summer jobs for disadvantaged youth, 14,000 part-time jobs for parks and forestry workers.

"Why don't we just put everyone in the United States on the federal government payroll and call it a day?" counters Rep. Jerry Lewis, R-Calif.

House Democrats diverted $75 billion from the Wall Street bailout fund to offset some of the costs. Opponents said that amounted to a shell game because unused bailout money is supposed to be used to reduce the deficit, which hit $1.4 trillion in the 2009 budget year.

The Senate, however, has less of an appetite for another costly round of economic stimulus measures, particularly with a vote on tap for Jan. 20 to again raise the ceiling on the government's total debt just a month after upping it to $12.4 trillion.

Conspicuously absent from the House plan were President Barack Obama's proposals to attack unemployment through tax credits for small businesses that create jobs and for homeowners who make their dwellings more energy efficient.

A job-creating tax credit for small businesses has support among some Democrats in the Senate, even though critics fear it may be too complex to work.

"Small business people have too much to do just to keep their businesses afloat to try and figure out some fancy, complex credit," Lawrence Lindsey, an economic adviser to former President George W. Bush, told a Democratic panel last month.

But Gene Sperling, an adviser to Treasury Secretary Timothy Geithner, said tax credits would empower growing small businesses.

"If these have even a marginal incentive on even a few ... employers, the bang for the buck in terms of job creation would be one of the highest of any of the types of incentives that we've had," Sperling said.

The job creation issue is complicated. Much of the money in the House bill goes to programs that may stimulate the economy but don't appear to directly put people to work.

There's $41 billion to extend unemployment benefits for six months and $12.3 billion to extend a health insurance subsidy for people who have lost their jobs. There's extension of a child tax credit for poor families, $23.5 billion to help states cover Medicaid costs and $23 billion so states can support some 250,000 education jobs over the next two years. An additional $2.8 billion goes to clean water and environmental restoration projects.

Even the investment in "shovel-ready" highway and bridge projects may not immediately translate into a reduction in the nation's 10 percent unemployment rate.

Republicans cited government figures showing that, as of Sept. 30, only 9 percent of $27.5 billion for highways in the first stimulus bill had been spent. The Congressional Budget Office estimates that of the $39 billion in the new House jobs bill directed to the departments of Transportation and Housing and Urban Development, only $1.7 billion will get spent before next October.

A lot of the money "hasn't even gotten out of Washington yet," said Rep. Eric Cantor of Virginia, the House's second-ranked Republican. "Why is it still here if it was designed to create jobs?"

Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, said some 8,000 highway and transit projects — more than half those designated under last February's stimulus bill — are under way, creating or sustaining 210,000 direct jobs. When indirect jobs are included, that number reaches 630,000, he said.

The low federal spending rate, committee officials said, is because the treasury outlay comes at the end of the process, after the contractor bills the state and the state bills Washington.

Dan DuBray, spokesman for the Interior Department's Bureau of Reclamation, said his agency will have no problem putting to work the $100 million it would receive under the jobs bill to provide clean drinking water to rural areas. "Projects in Reclamation are much akin to planes waiting on the taxiway waiting to take off."

Matt Jeanneret, spokesman for the American Road and Transportation Builders Association, agreed that "a lot of jobs" have been saved by the stimulus act, although in many cases federal money is basically replacing lower levels of private or state investment. The unemployment rate in the construction industry remains at about 19 percent, almost double the national level.

The stimulus is "a needed shot in the arm, but the real solution is a long-term highway and transit investment bill," Jeanneret said. Congress has put off consideration of a six-year $450 billion infrastructure measure to replace the highway and transit act that expired in September.

The CBO has estimated that employment was 600,000 to 1.6 million higher in the third quarter of 2009 because of the stimulus act.
___
Associated Press writer Ann Sanner contributed to this report.
___
On the Net:
Information on the bill, H.R. 2847, can be found at http://thomas.loc.gov/
Congressional Budget Office: http://www.cbo.gov/
Background on the Jobs for Main Street Act: http://tinyurl.com/yz2ryx9

Poster child for recession shows signs of recovery

In the January 2, 2020 article "Poster child for recession shows signs of recovery," Associated Press writer Charles Wilson says Elkhart, Indiana, one of the cities hit hardest by the Great Recession, is showing signs of economic recovery:

ELKHART, Ind. – When Ed Neufeldt introduced Barack Obama at a speech in Elkhart County in February, the new president promised the laid off RV worker would find a job.

Since then, Neufeldt has found two, setting up bread displays in grocery stores and working with a company that hopes to hire hundreds of people to make electric motors.

"If I was on unemployment, I'd be bringing home more money than I bring home from both jobs," said Neufeldt, 63, of Wakarusa. "But that's OK, I want to work and I feel like I'm helping the economy a little not being on the unemployment ranks."

Obama has visited the northern Indiana county four times — twice during the 2008 campaign and twice since — focusing attention on the area as emblematic of the nation's double-digit unemployment woes.

Now, hope is rising in the struggling area as people head back to work — though not always at the same jobs they left, and sometimes for less money.

The unemployment rate here, driven by job cuts at factories that made Elkhart County the capital of recreational vehicle manufacturing, spiked in March to 18.9 percent. But it has fallen steadily since, reaching 14.5 percent in November while the national rate climbed to 10 percent.

Part of the drop in unemployment may be due to hiring at a handful of RV makers like Heartland RV in Elkhart, which recently held a job fair after announcing it would add 400 jobs by March. For jobless workers who have spent months scrimping to keep up with mortgages, the job fair was a welcome first step in returning to the life they used to know.

"Unemployment is livable, but it's not like how we were living," said Marcia Blanton, who lost her job at RV maker Monaco Coach in September 2008. Blanton, 53, of Elkhart, briefly landed a job at a musical instrument factory before being laid off again a year later. She was still waiting to hear from Heartland about her application weeks later.

Other RV makers also have begun hiring, albeit slowly, as orders from dealers have picked up in the past few months. Dealers don't generally discuss sales figures, but two economists who follow the industry have predicted a slight rebound in production for 2010.

Gulf Stream Coach and Electric Motors Corp. announced in May they plan to spend more than $80 million on building renovations and equipment for factories in Wakarusa and Nappanee. The companies estimate the project could have 1,600 workers by 2012.

"I don't think there's any question that jobs are up," said Morton Marcus, a retired Indiana University economist who recently conducted a study for the Elkhart County Economic Development Corporation that forecast an upswing in the RV industry.

Still, some of those who have gone back to work are making less money.

Doug Hartzell, 59, of Nappanee, was rehired as a temp worker at the new Monaco RV in September after the old company's assets were bought by Navistar International Corp.

"I really did make an effort to find a job in those 12 months I was off and it was kind of discouraging after a while when you go door to door and you don't even get a chance for an interview," he said.

He said he's fine with working 9 1/2- to 10-hour days, even for the smaller paycheck.

"I'm just glad to have a job," he said.

More jobs could be on the way in other industries as well.

Band instruments, office furniture, steel tubing, plastics and agricultural testing supplies are also made in Elkhart County.

Dorinda Heiden-Guss, president of the county development corporation, said the county has seen an "onslaught" of business interest since visits from Obama and former Arkansas Gov.-turned-Fox News commentator Mike Huckabee.

"People seem to know about Elkhart County," Heiden-Guss said.

In the past year, about $134 million worth of new projects entailing 3,300 new jobs have been announced, she said.

Upstart Electric Motors Corp. has moved into a former RV showroom in Wakarusa, where CEO Wil Cashen hopes to hire hundreds of workers to produce drive trains for electric-hybrid vehicles. Companies like Gulf Stream would install the engines. It's one of three electric vehicle projects involved in or eyeing the county.

Profitability will take some time — Electric Motors' business plan projects million-dollar losses for the first two years before turning a $21 million profit in 2011.

Still, Cashen, a northern Indiana native, is a big believer in Elkhart County and its down-to-earth work force.

He was so taken with Neufeldt's speech introducing Obama in Wakarusa that he hired him as a company spokesman. There isn't much speaking to do right now, so Neufeldt does odd jobs around the mostly empty building and the nearby Nicola Tesla School of Technology, where Cashen intends for employees to be retrained to work with electric motors.

"Elkhart is a kind of a sleeping diamond," he said. "It's an absolute diamond in the rough."

Amid the signs of hope, there are still plenty of reality checks.

Thousands remain out of work — nearly 14,000 in the Elkhart-Goshen metropolitan area alone in November. Social services agencies like Church Community Services, a food pantry near downtown Elkhart that serves 2,000 families a month, say they're still seeing intense need.

"We haven't seen the bottom yet," director Dean Preheim-Bartel said.

But despite lingering skepticism among some in Elkhart County, many believe that this poster child for the recession will one day become a symbol of recovery.

"If it's going to happen, I think we're going to be the first to see it happen," said Heiden-Guss, the president of the economic development corporation.

Remote Area Medical expeditions provide free health care to those who cannot afford to pay for it.

In the January 2, 2010 article "Lessons of a weekend of free health care," Associated Press national writer Adam Geller reports on a Remote Area Medical (RAM) expedition to provide medical services to those in need.

MAYNARDVILLE, Tenn. – The two-hour drive is done, but Hannah and Jack Hurst leave the Honda's engine running.

Hannah's prayers have brought them here. Now there's little to do but turn up the car's heat, try to get some sleep and wait for morning — and a set of glass and metal doors to open.

Still, Hannah doesn't complain. The 26-year-old mother of three has waited "pretty much as long as I can remember" to escape the pain throbbing through her jaws. Jack lost his road construction job a year ago and health insurance is out of the question. If the answer to Hannah's misery can be found behind those doors, then what's 10 hours more?

Out in the dark, the Hursts have plenty of company. Even before 10 p.m. on Friday in late fall, nearly 50 cars ring the ball field parking lot. By 6 a.m. Saturday, more than 400 men and women — some wrapped in blankets, others leaning on walkers — stand tightlipped and bleary-eyed under the Big Dipper.

They clutch numbered tickets, ready to claim the prize for perseverance: By day's end, as long as they can keep appetites and tempers in check and the sleep from their eyes, they will win the privilege of care from a dentist or a doctor.

In a country convulsed over health care, the scene would be alarming if it wasn't so predictable.

In fact, it's always the same, Stan Brock says. For 17 years, Brock has piloted a nonprofit called Remote Area Medical around the country, commandeering high school gyms and county fairgrounds to offer free health care to the uninsured, the underinsured and the desperate.

Brock has seen so many crowds like the one massed outside Union County High School this dawn he chides himself for losing track of whether this is RAM's 578th expedition or its 587th (it's the latter). And yet in every one of those seemingly identical crowds there are hundreds of Hannah Hursts, each a unique testament to the nation's ragged pursuit of health care answers.

Over the next two days, RAM's volunteers will examine, test, anesthetize, extract and prescribe hundreds of solutions for individual aches and afflictions. They will, in the few moments left, try to convince patients they'll probably never see again of the virtues of healthier living and continuous care. They will do their best to answer Hannah Hurst's prayers.

It's pretty clear lawmakers debating reform in the nation's capital could learn something here in the trenches.

But the most striking lesson might also be the most daunting: To fix the nation's health care inequities, expanding health insurance alone may not be enough.
___

"OK. Good morning folks," Brock booms in an accent crisp with authority. "We're going to get started on time."

It is precisely 6 a.m., and Brock has just pushed open the high school's doors, stepping out in to 45-degree darkness and a gathering sea of faces. He has questions ready for mornings like this. But he already knows what the answers will be.

"Who's here to see a dentist?"

More than half raise their hands. Who has come to see an eye doctor? Almost as many. Who's here to see a medical doctor? Scattered hands go up, but Brock, smilingly sagely, expects that, too.

"Really, they all need to see a doctor," he says. "They just don't want to lose their place on line."

Back at 3:30 a.m., the Tennessee State Guard had passed out tickets to those waiting for care. No two of their stories are the same.

Ronnie and Debbie Erwin have driven 2 1/2 hours from Johnson City. Insurance from her job at a telecommunications company covers his care for spinal stenosis. But the prescriptions caused his teeth to disintegrate and infection followed. Insurance doesn't cover that.

"My doctor said you've got to do something or it's going to kill you," Ronnie says.

Melissa Hayes, a $7-an-hour home health aide from nearby Luttrell, has waited in the car since 11:30 p.m. with her daughters, aged 5, 7 and 10. Hayes has a short list of needs for RAM. But first is getting the oldest, Brittney Prince, in to an eye doctor. The fifth grader can't see the board at school, but the family doesn't have money for eyeglasses.

Joe Mason is anxious to do something about a molar that broke more than six months ago. To limit the pain, he's been chewing on the right side of his mouth ever since. But if there's time, he's thinking about seeing a doctor, too.

The idea, though, leaves him uncertain.

"How do you go in there and talk to a doctor? I probably haven't been to one in 20 years," says Mason, 31.

"I mean, what are you supposed to say to one?"
___

"Who's got No. 1?"

The day's first patients are waved in to "triage" — otherwise known as the high school cafeteria — and nurses at the lunch tables cuff them for blood pressure readings.

Decide which of your needs is today's priority, volunteers urge. There won't be enough time or doctors to deal with them all.

"Dental?" Go to the gym.

"General medical?" Past the vending machines to the classrooms down the hall.

Compared with many of RAM's expeditions, the volunteers did not have to travel far — it took less than an hour for the trucks to reach Maynardville. But this is only the most recent stop on a long and convoluted journey that began in the Amazon.

Brock, a British boarding school dropout, landed there more than 50 years ago and turned himself into a South American cowboy. He left the rain forest in the 1960s to wrestle anacondas and rope giraffes on a popular U.S. television show, "Wild Kingdom."

But in 1985, settled in Knoxville, Tenn., he began organizing medical relief flights back to the region, where it otherwise takes 26 days on foot to reach a doctor.

Seven years later, he got a call. The only hospital in Hancock County, Tenn., had closed and the sole dentist had moved away.

"We literally loaded a couple of 400-pound dental chairs that we borrowed into the back of a pickup truck and we went up there with a couple of dentists," Brock says. "It wasn't long before another county called and on and on and on and on."

Hundreds of expeditions later, RAM hasn't abandoned the Amazon. But Americans have become the group's main mission, especially people struggling to get by in the mountain towns of Tennessee, Virginia and Kentucky.

At a RAM expedition a few weeks back in Winchester, Tenn., a man who came in for dental work complained of paralysis in one leg — a sign of a stroke. But he rejected paramedics' coaxing to go to the hospital, saying he couldn't afford it. Last year, in Wise, Va., an optometrist peering into a man's pupils diagnosed a brain tumor.

For all their planning, RAM's people never know entirely what to expect. Neither do their patients.

Although Hannah and Jack Hurst got to Maynardville early, they lost their place in line when the parking lot was cleared by police responding to shots from nearby woods — just some teenagers hunting, as it turns out.

By the time Hannah's ticket — number 156 — is called and the couple reaches the gym, visitors in scrubs have the run of the Union County Patriots' home court.

Blue tarps blanket the hardwood. Four rows of dentists, hygienists, and dental students from as far as Buffalo, N.Y., cluster around 38 portable dental chairs, wielding suction hoses and extracting forceps. Aside from the patients packing the bleachers, it looks like a scene from "M-A-S-H."

Finally, Hannah Hurst is called to a chair and explains why she's come.

In pregnancy, her mother suffered from a calcium deficiency. Hannah's baby teeth decayed fast. It was even worse with her permanent teeth and disease filled her gums, swelled with abscesses. When her parents had insurance, it either wasn't enough or dental wasn't covered. They set aside money, but always fell short. Four years ago, Hannah saved enough to reach a dentist's chair, when her cell phone rang. Her aunt, hospitalized with cancer, had taken a turn for the worse. She rushed out and never went back, even though a spring breeze can trigger pain that knocks her to her knees.

Back home in Campbell County, worshippers at Sled Creek Holiness Community Church have prayed, even fasted, to help Hannah heal.

Today Hannah — holding tight to Jack's hand as she lies back in the dental chair — is ready to embrace the answer.

Please, she asks, pull them all out.
___

Most of those waiting for a dentist or an eye exam have a need that can't wait. It's calmer in the three classrooms reserved for the medical doctors, but the patients' stories are at least as telling.

"I went to college. I'm a graduate. I just never thought I'd ever be here," Earleen Black says.

Until losing her job eight months ago, Black was a radiology technologist at a hospital. She's embarrassed to ask for help. Maynardville — the center of a county of 19,000, set between corduroy ridges 45 minutes from Knoxville — is a small town and she knows so many people.

But Black needs to find work. Instead, she's preoccupied with bursitis that's attacked with the force of a baseball bat. With insurance, a yearly steroid shot provided an easy answer. Now it's $200 she doesn't have. She's relieved when a doctor administers the shot without charge, but mystified that there was almost no wait.

"I'm surprised they're not more people begging at the door," Black says.

The truth is many here to see a doctor didn't want to come. They were sent by one of RAM's volunteer nurses because their blood pressure registered too high to undergo the dentist's drill.

To some, though, that is just a temporary setback.

Daniel Drake's blood pressure came in at an eye-popping 200/120. He chalks it up to lack of sleep and an energy drink, and leaves happy when a pill brings it down enough to get his tooth fixed. But Dr. Alan Weder, a University of Michigan researcher volunteering for the weekend, shakes his head with concern.

"If that's the way he's walking around, his risk of having a heart attack or a stroke in the next five years is probably 20 to 30 percent," Weder says. "And that's for want of 30 cents in medicine."

As doctors ask questions, it's clear many patients know they have diabetes or hypertension. Some are supposed to be on medication but can't afford it. Comprehensive insurance could resolve the patient cost dilemma, Weder says. But the problems go beyond that.

Weder notices many of the patients who say they can't afford basic prescriptions — now carried by big discount chains for as little as $4 a month — have cigarettes in their shirt pockets that cost far more than the pills.

When Kevin D'Angelo, a dentist from upstate New York who's volunteered at more than 20 RAM expeditions, asks patients with the worst decay what they drink, the most common answer is Mountain Dew, often five or six cans a day. The only way to get teeth as bad as some of those he sees, D'Angelo says, is almost never to have brushed at all.

Many of those waiting for care stagger under too much weight. And while some speak glowingly of their regular physicians, many say they don't see the need for one. Still others recount the difficulty of getting in to see a doctor or a dentist in rural areas where providers and openings for people without insurance are in short supply.

For all the undeniable good RAM's volunteers do, there's only so much a weekend's barrage of free care can solve.

"I think to myself, is this how we should be delivering health care in this country?" says Lynne Lacey, a hygienist who's driven 12 hours from Binghamton, N.Y. to volunteer. "I'm doing something that I think is important, but is it the right way?"

It's like the little Dutch boy in the story of old who holds back a flood by sticking his finger in a dike, says Bruce Behringer, an expert on Appalachia's public health needs at East Tennessee State University.

RAM, he says, "is a symptom of the problems in the health care system, not a solution."
___

Hannah Hurst is back for Day 2.

Yesterday, RAM's dentists pulled 16 of her teeth. Now, after some much needed sleep, the Hursts are eighth in line. In the gym, Trey Parker, a dental student from the University of Louisville, welcomes her return to the chair.

But before reaching for his tools, Parker honors Hannah's request. With heads bowed, he links hands with Jack and two other volunteers, a circle completed by reaching down to Hannah's shoulders.

"Lord," Parker says, "let Hannah have the strength to bear through getting all her teeth pulled; that she can hold up; that her jaw will be made whole and that she can live a happier life being a mother. In the name of Jesus Christ."

"Amen."

Today is a bit of a gift. By 9 a.m., just 260 patients have come through the door.

Sundays can be a race for RAM. The doors close around noon, to allow for cleanup and to give tired volunteer doctors, many from out of state, time to get home. But today's smaller crowd means they may actually get to treat everybody.

Still, the morning present unexpected challenges.

In the hallway, Olesea Gaitur waits to see a doctor. Gaitur, an immigrant from Moldova, is expecting a baby in March, husband David explains. Tennessee pays for prenatal care. But, lately, when she stands up, she's been seeing black. TennCare doesn't cover that.

"If she's pregnant and blacking out she needs to go to the emergency room," Dr. Erin Bryant tells the couple. "I'm sorry about that. I wish we had an obstetrician here, but we don't."

But after a few more questions, Bryant reconsiders. Perhaps Olesea Gaitur is dehydrated. Volunteers lead her to the high school's cosmetology classroom, where — under the gaze of shelves full of styling mannequins — the doctor checks her blood pressure.

Out at the sign-in table, a family of three comes in seeking eye exams and glasses. But they're late, there's only one optometrist today and RAM is down to its last two registration forms.

"Then find one more form," Ron Brewer, RAM's Tennessee director tells a volunteer.

Once in, a long wait remains. At midmorning, patients still fill the bleachers and line the hallway, offering a case study in needs health care reform may not answer.

Take Hannah Hurst's teeth. Proposals by Congressional Democrats, while they would greatly expand traditional medical coverage, won't cover dental care, except for children.

It's no better for vision care, not covered for adults under either the House or Senate bills.

Many RAM patients have insurance with high deductibles that act as barriers to care. Reform would limit out-of-pocket costs. But the newly covered would still be left to pay about 30 percent — a cushion against catastrophe, but perhaps a discouragement for the working poor with more routine illnesses.

Changing the economics, though, is just the start.

"There's a culture that sort of surrounds the problem," Brock says.

All the high blood pressure readings in the cafeteria aren't a coincidence. Heart disease, hypertension and diabetes are serious problems throughout Appalachia. That is partly the result of smoking, lack of exercise, an unhealthy diet and obesity. But it also reflects attitudes and relationships with the health care system, Behringer says.

It can be hard reaching a doctor in thinly populated counties with few roads and mountains that make travel a challenge. Even when that's possible, many people don't see a doctor regularly and many doctors are unable to build the continuous relationships with patients to help ensure care, Behringer says.

The problems are all too real to Eddie Graham, the local school health coordinator, who lobbied RAM to come to Maynardville. He recounts the challenge of trying to foster health in an area where some parents can't read or write well enough to fill out applications for the public insurance that is available. Some families send their children to class sick and tell them to go see the school nurse. Kids arrive at elementary schools carrying chewing tobacco.

Making health care affordable only partly solves problems like these, he says.

"It's changing beliefs," Graham says. "It's educating people about what is health." ___

When the numbers are totaled, Expedition No. 587 into America's health care jungle will be recorded as followed:

Over 1 1/2 days in Maynardville, 701 patients have come through RAM's doors.

Its dentists have extracted 852 teeth and put fillings in 234 others; 345 pairs of eyes have been tested, and 335 pairs of glasses have been made; 87 people have been examined by a medical doctor.

If RAM was going to send out a bill for the weekend's services, it would total $138,370.

Does that make it a solution to a crisis or a symptom? The answer may lie beyond the bottom line.

When Brittney Prince goes back to school Monday, she'll be wearing her first pair of eyeglasses.

"Momma," she says, gazing out into the sunshine through lenses made by a volunteer, "the grass is not fuzzy any more."

And when Hannah Hurst — her toothless mouth stuffed with gauze — is helped from the chair, she hugs Trey Parker and Dr. Bill Collins. The swelling will take three months to heal and keep her on a liquid diet. At church, raising money for dentures may have to wait until spring. But, at last, her prayers have been heard.

"There is no other answer for it but God and it just makes me so much more thankful," she says. "It truly is my testimony now. You keep praying, you keep asking, and your answer will be there sooner or later."

Cities, counties take back corporate tax breaks

In the January 2, 2010 article "Cities, counties take back corporate tax breaks," Associated Press writer Don Babwin reports communities are fighting back against corporations with unfulfilled promises of job creation:

CHICAGO – Cash-strapped communities have a message for corporations that promised jobs in return for tax breaks: A deal's a deal.

As the economy sputters along, municipalities struggling to fix roads, fund schools and pay bills increasingly are rescinding tax abatements to companies that don't hire enough workers, that lay them off or that close up shop. At the same time, they're sharpening new incentive deals, leaving no doubt what is expected of companies and what will happen if they don't deliver.

"We will roll out the red carpet as much as we can (but) they are going to honor the contract," said Brendon Gallagher, an alderman in DeKalb, Ill., where Target Corp. got abatements from the city, county, school district and other taxing bodies after promising at least 500 jobs at a local distribution center.

So when the company came up 66 workers short in 2009, Target got word its next tax bill would be jumping almost $600,000 — more than half of which goes to the local school district, where teachers and programs have been cut as coffers dried up.

The newfound boldness comes from communities and states that have long bent over backward to lure companies and jobs by offering abatements and other incentives — to the tune of an estimated $60 billion a year in the United States, according to the Washington-based economic development watchdog group Good Jobs First.

The willingness to write — and enforce — the "clawback" provisions comes even as companies across the country struggle and against a broader backdrop of governments getting tough on business practices.

What's more, the poor economy has communities thinking about how the tax breaks they dole out will play with residents who have grown increasingly angry at the thought of anything that hints of corporate welfare.

"The public is a lot more aware of tax abatements and there's a climate of skepticism about what can be perceived as corporate handouts," said Geoff McKimm, a member of the Monroe County Council in Indiana.

With that in mind, county officials drew up an agreement with Printpack, a packaging company, that includes a provision requiring the company to refund either $197,000 or that year's abatement, whichever is more, if the number of employees at a new factory falls below 140.

Another provision requires Printpack to refund the entire abatement if it employs fewer than 75 people — a guarantee meant to prevent companies from leaving a "skeleton crew" at a location to avoid paying up.

"With so many businesses going to Mexico, communities are desperately trying to hold onto jobs," said Amy Gerstman, the county's auditor. "This was a carefully put-together abatement."

And businesses increasingly are being forced to hold up their end of the bargain.

In Texas, where companies can get money from the Texas Enterprise Fund if they promise to create a specific number of jobs, the number of clawbacks rose to nine in 2008, compared to a total of seven for the previous three years combined, the governor's office said.

In Illinois, the number of companies from which the state sought to "recapture" incentive money has steadily climbed, from six in 2005 to a total of 37 by 2008.

Meanwhile, more communities are contemplating similar action.

In St. Louis County, officials have told Pfizer Inc. that if it cuts 600 jobs, as planned, they'll rethink the $7 million in tax breaks they promised to give the drugmaker for the next 10 years.

And in Detroit, while the state was approving expanded tax credits in exchange for General Motors Co.'s promise not to move its headquarters, the city council was talking about cracking down on tax breaks for GM and other major employers.

"We know that there are more clawbacks getting triggered because more deals are falling short," said Greg LeRoy, executive director of Good Jobs First, who has written extensively on clawbacks.

It's unclear exactly how much is being recovered because nobody collects comprehensive statistics on clawbacks, LeRoy and others say. States that do keep statistics track only their own deals, not those initiated by local governments. Communities also may revoke the entire abatement or only a portion of it, while others sometimes simply rule out future abatements, LeRoy said.

Finally, some communities crack down on companies quietly, out of concern that they could scare off other potential employers, LeRoy said. He said that fear persists even though there is no evidence that having or enforcing clawbacks poisons the business climate.

"We were told that we were going to ruin Topeka's ability to attract businesses; we'd give Topeka a black eye," said James Crowl, assistant county counselor in Shawnee County, where last year officials approved a settlement that calls for Target to pay $200,000 a year for 10 years after failing to create as many jobs as it had agreed to.

So what happened?

"Last year we opened a Home Depot distribution center right next door," said County Counselor Rich Eckert.

In DeKalb, some officials were concerned about sending a bad message to other businesses considering locating there, said Gallagher, the alderman. But he didn't buy it.

"We are 65 miles from Chicago (and) if someone wants to locate 120 miles from Chicago, I can't stop them," he said.

Besides, he said, $600,000 means less to Target than to a struggling community, where he said the city alone is facing a $2 million revenue shortfall.

Target was disappointed, but understood the decision, spokeswoman Jill Hornbacher said.

"We are very committed to DeKalb and that distribution center and proud to be there," she said.

And don't expect communities to back down soon, officials said.

"There is much more (language) tied to jobs now because of economy," said Lee Garrity, city manager in Winston-Salem, N.C., which along with the surrounding county is sharing more than $26 million that computer giant Dell Inc. paid after announcing it will close its assembly plant next year.

Garrity said officials are thinking about provisions that are even more specific.

"We are discussing whether we need to require the jobs of the company go to people who live in the city," he said.

To Avoid Raising Taxes, States Try To Rack Up Fees

In the January 1, 2010 National Public Radio (NPR) story "To Avoid Raising Taxes, States Try To Rack Up Fees," Greg Allen reports that U.S. states are using numerous fees and other tax increases to reduce budget shortfalls.

Few ideas are more unpopular during a recession than increasing taxes. So, how can states, counties and municipalities that are struggling financially raise more money?

For many, the answer is fees.

Nearly every state in the country struggled to close budget deficits in 2009, and for many the struggle is not over yet. The National Conference of State Legislatures reports that 36 states already have budget deficits for the fiscal year that began in September, and the gaps are only expected to grow as 2010 progresses.

There have been a lot of cuts, and more are coming. Governors and legislatures have laid off and furloughed state employees, tapped rainy-day funds and cut spending on education and health care.

They have also raised revenue — what most people call taxes.

Few states have struggled more with the budget gap than New York. There, the Legislature's solution was to raise fees — for bottle deposits, tax preparers, nuclear plants, horse racing, hunting and fishing licenses. If there was a fee, the lawmakers raised it. If there wasn't one, they created it.

Dan Sharp owns Honeoye Lake Bait and Tackle Shop in upstate New York. He says the increase in fees for hunting and fishing licenses, combined with the poor economy, is hurting his business at a time when he should be busy: ice-fishing season.

"There's a few guys out on the lake — it just started here a week or so ago — but not the crowds like you'd expect to see," Sharp says.

At least seven other states have also raised hunting and fishing fees.

States Tax Visitors

While politicians have generally tried to avoid using the "T" word, some taxes have proved hard to resist.

Many cities and states are raising taxes on hotel rooms and rental cars. The reason is obvious: They are taxes paid by out-of-towners, not local voters.

Craig Banikowski of the National Business Travel Association calls it taxation without representation. And he says that over the past year, cities and states across the country have been raising rental car and room taxes like never before.

Indianapolis, Boston, San Francisco, Hawaii and Nevada have all added or increased hotel taxes recently, he says.

While raising taxes on constituents is always dicey, the sorry state of their budgets has forced a few states to do so. In Arizona, New Jersey, New York and Colorado, legislatures have suspended some property tax exemptions.

In Colorado, shutting down exemptions for senior citizens is saving the state $100 million annually. Mark Lowderman, the tax assessor in El Paso County, says he has already heard from 30 or 40 seniors who share a common sentiment.

"The general feel is they think they're trying to balance the budget on the backs of the seniors," Lowderman says.

He says he expects the outcry to grow once the property tax bills go out in the next few weeks.

'Sin' Taxes Continue To Rise

If there is such a thing as a popular tax, it would be those on alcohol and tobacco, the so-called "sin" taxes. More than a dozen states raised taxes on alcohol, and 15 states raised tobacco taxes over the past year.

Danny McGoldrick with the Campaign for Tobacco-Free Kids says some states have raised the cigarette tax by a dollar a pack. Even so, he says, there's room for more.

"They go from a low of 7 cents a pack in South Carolina to a high of over $3," McGoldrick says. "So there's a lot of room for tobacco tax increases across the country, and we're hoping that's what's going to happen in the coming year."

State and local governments have been inventive — some might even say devious — in finding ways to increase revenue. One idea that is catching on across the country is automatic surveillance cameras to monitor red lights and speed zones. Typically, the devices are installed and maintained by private companies, which take a cut of revenues from tickets and leave the rest for the municipality.

The state of Georgia has another new idea. It's a "super speeder" law that requires motorists caught driving 85 mph or faster to pay a special $200 state fine on top of the local penalty. It's expected to raise $23 million in the coming year.

And if it's successful, look for it to be coming soon to a state near you.

Test your understanding of economics in the news: Is this a change in supply or a change in demand?

In the January 1, 2010 New York Times article "Next Up on Cable TV, Higher Bill for Consumers," Brian Stelter reports that cable TV companies are paying higher fees for the programs they broadcast.

Using the ceteris paribus assumption that ignores other potential changes, what is the likely effect on the market for cable TV if increasing numbers of networks demand higher fees from the cable companies in order to broadcast their programs?

Is this (a) an increase in the supply of cable TV, (b) a decrease in the supply of cable TV, (c) an increase in the demand for cable TV, or (d) a decrease in the demand for cable TV? Will the equilibrium price of cable TV increase or decrease as a result of cable TV companies paying higher fees for the programs they broadcast ?

Read the article below and then illustrate this price change with a graph that shows the initial positions of the supply and demand for cable TV and the new positions of the supply and demand curves. (Hint: Does an increase in the costs of production shift the supply curve or the demand curve? Is it a shift to the right or left?) There is a link at the bottom that provides the answer.

The performances on “American Idol” may be erratic and the plot twists on “Lost” may be unpredictable, but one facet of television is certain: the costs just keep going up.

On New Year’s Day, the News Corporation, the media empire controlled by Rupert Murdoch, wrangled new payments from Time Warner Cable, including subscriber fees for the Fox Broadcasting network, which is free for viewers with over-the-air antennas.

The high-stakes deal reflected the scramble by media companies to reduce their dependence on advertising.

Something else also happened that day: Time Warner Cable put another rate increase into effect.

It will not be the last time. Along with Fox, other broadcasters say they deserve a share of the cable and satellite bills that roughly 100 million American households pay each month. At the same time, the cable-only channels that have lured viewers away from broadcast, with shows like “SpongeBob SquarePants” and “The Closer,” are lining up for further fee increases.

Viewers usually do not notice until the price goes up, but their pay TV bills are a battleground for media companies. “Content providers are testing the limits — hoping to raise the bar as high as possible,” said Steve Ridge, the president of the media strategy group for the consulting firm Frank N. Magid Associates.

These battles are playing out just as the television industry is coping with the wrenching changes brought on by new competition from the Internet.

Broadcasters have long envied the fact that their cable channel competitors are paid two ways, through advertising and subscriber fees. So now, the television networks are fighting for every penny they can.

Several years ago, CBS started asking for fees, and the News Corporation followed in negotiations last month, demanding a dollar for each subscriber every month from Time Warner Cable. The average digital cable customer already pays nearly $75 a month, the research firm Centris found last year.

The companies will not reveal what compromise they reached, but that figure will most likely become a benchmark for future deals. Disney is expected to ask for sizable fees for its ABC stations in negotiations this year.

In a twist, Comcast, the country’s largest cable provider, will soon own NBC Universal, if its acquisition is approved by the government, putting it in a position to pay out as well as collect fees for NBC.

Cable and satellite distributors are resisting the demands, but a “power shift,” as Mr. Ridge put it, is under way as broadband Internet becomes pervasive, putting a seemingly infinite variety of choices in front of consumers. Of course, broadband is not free, either, and it is often provided by the same companies that distribute television programming.

The News Corporation fight was unusual because it played out in public, with Time Warner Cable arguing that it wanted to hold the line on further fee increases. That looks impossible, however, as newly powerful cable channels seek to cash in.

They argue that they deserve more money for having invested millions in their original programming. Cable executives say privately that the demands, and resulting fights, are increasing in frequency. And every time they clash, there is a chance that viewers will miss out.

The sports network Versus, owned by Comcast, has been off of DirecTV’s satellite service for three months in a fee battle. More prominently, the Food Network and HGTV disappeared from Cablevision’s lineups in New York and New Jersey on Friday after talks broke down with the owner of the channels, Scripps Networks.

The Food Network costs distributors 8 cents a viewer on average now; Scripps wants a roughly 300 percent raise, according to people briefed on the negotiations. That might seem drastic, but 30 other channels, some with lower ratings, already earn that much. “We were really, really undervalued,” said Brooke Johnson, the president of the Food Network.

For ardent fans of “Iron Chef America,” the Food Network is undoubtedly worth 25 cents a month. But that logic, applied to dozens of channels, can become pretty expensive for viewers. For example, the owners of Oprah Winfrey’s cable channel, set to begin one year from now, are hoping that her star power will be worth 50 cents for each subscriber a month. The channel it is replacing, Discovery Health, gets only 12 cents now.

Consumers already pay dimes or quarters for most cable channels each month, whether they watch them or not. ESPN earns the most by far, $4.10 on average, and is forecast to receive more than $5 a month by 2012, according to the research firm SNL Kagan. Fox Sports Network gets $2.37 on average.

The next-highest paid channel, TNT, gets 96 cents. The Disney Channel, NFL Network, Fox News, USA and ESPN2 each get more than 50 cents. For every channel, the price per month is expected to rise each year.

“We hear from consumers that they are paying too much and getting too little for it. And there seems to be no end to the rate hikes in sight,” Mindy Spatt, a spokeswoman for The Utility Reform Network, said.

Even as consumers recover from the recession, there is little evidence that people are canceling cable en masse, although some know that calling up their local provider and threatening to cancel can quickly earn them a big discount.

Time Warner Cable is not alone in raising rates; higher prices go into effect for DirecTV and AT&T’s customers next month.

In Washington, where proposals for “à la carte” cable pricing were popular in recent years, some lawmakers and regulators now look to the Web as a more attractive, market-driven solution. Viewers will increasingly be able to bypass pay TV service and watch whatever they like online.

Distributors are trying to put a system into effect that will offer some TV shows online to existing subscribers only.

Time Warner Cable asserts that the power ultimately rests with the consumer. “They’re the ones who are going to resist these price increases that the programmers are trying to push,” said Alex Dudley, a spokesman for the company. “One need look no further than the music industry for an example of what happens when consumers feel taken advantage of by an entire industry.”

Lest anyone doubt that Americans, who watch an average of five hours of television a day, cannot part with their sets, look no further than Orange County, Fla., where two football fans sought an emergency injunction to avert a Fox blackout of their alma mater’s bowl game on Friday as the dispute with Time Warner Cable persisted. No one, not even Mr. Murdoch, was going to interrupt their viewing of the Sugar Bowl.

The fans lost the case but won their Fox, as the two companies committed to a new contract about 45 minutes before kickoff. Soon enough, though, those fans will be paying for it.

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