Bill Clinton: How I’d fix the economy

NEW YORK (CNNMoney) — Move over Congress. Move over President Obama. Bill Clinton is back — and he has a lot of economy-fixing ideas.

The elder Democratic statesman has crammed his latest book — called “Back to Work” — with dozens upon dozens of policy prescriptions designed to get the economy back on track.

Clinton hammers one point over and over: Government is good, and the policies of “antigovernment ideologues” would only “push the pedal to the metal of the most destructive trends of the last thirty years.”

So how can the United States get back on track?

“We need to get our game face on,” Clinton writes.

A few of his ideas: Homeowners with underwater mortgages should have their loan principal reduced, U.S. companies should be allowed to repatriate profits held overseas and investment in green jobs and infrastructure must be increased.

Clinton says the country needs “a rapid, comprehensive effort to resolve the ongoing mortgage crisis.”

Every delinquent homeowner with a mortgage worth more than the house should have the principal written down or the loan’s term extended at a lower interest rate. Another option: If a homeowner can’t make reduced payments, they should be allowed to exchange a deed for a multi-year lease.

If those options don’t work for a homeowner, foreclosure should be expedited.

On the corporate tax code, Clinton says he favors reforming the system in a way that would lower tax rates but not the amount of revenue collected by the Treasury.

And in the near-term, Clinton says Congress should allow companies with earnings held overseas to repatriate that money at a tax rate below the usual 35% — say 15% to 20%.

If a company is able to prove they will use their repatriated profits to create new jobs in the United States, the tax rate should be dropped all the way to 0%.

The American tax machine

With as much as $1 trillion in profits being held overseas, the scheme could create a nice chunk of revenue for the Treasury. Clinton says that money should be used to fund infrastructure grants to the states.

Many of Clinton’s other proposals would try to create jobs linked to projects that would help change the way Americans produce and consume energy.

For example, Clinton wants an “aggressive, fifty-state building retrofit initiative” that is financed with a government-backed loan guarantee program. Meanwhile, states should launch their own retrofit programs. Congress should bring back full tax credits for green tech jobs.

The United States should also develop more efficient biofuels, work to harness geothermal heat and extract more natural gas — a process that often requires companies to use the controversial “fracking” technology.

At the very least, rooftops should be painted white, Clinton says, to help cut down on energy costs.

In all, Clinton lists 46 bullet-point ideas to help the economy, but he sneaks a few more in around the margin.

However, many of the ideas would require congressional action.

And as Clinton points out, Washington is tied in knots at the moment — totally consumed by partisanship. Very little legislation has successfully emerged from Congress this session.

And after all, that is where the rubber meets the road.

Analysis

With the US economy in turmoil and witnessing some of the highest rates of unemployment this is an interesting article showing Bill Clinton’s perspective on how to solve the economy. Bill Clinton is known for the 8 years of positive Economic growth during his time as President of the USA.
Yet, the tax code is vital for Americans and it is a tricky subject also for the GOP candidates for Presidency.

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Japan ready to intervene again on strong yen

TOKYO — Japan on Friday voiced concern over the rise of the yen to fresh 15-year highs against the dollar and signalled it was ready to wade back into markets to intervene amid fears of a global devaluation battle.

“I am very concerned about the current situation,” Prime Minister Naoto Kan told parliament when asked about the yen’s strength, which puts Japan’s growth-driving exporters at a disadvantage by making their products more expensive overseas.

“We will take decisive steps when necessary, from the perspective of curbing excessive fluctuations in exchange rates,” Finance Minister Yoshihiko Noda told a regular press conference.

Amid expectations the US Federal Reserve will adopt further easing measures to pump more liquidity into the world’s largest economy and further weaken the dollar, the unit Thursday plunged to fresh 15-year lows against the yen.

A surprise policy tightening move by Singaporean authorities to widen the trading band of its currency on Thursday also added to pressure on the greenback and pushed the Singaporean unit to record highs.

On Friday the dollar stood at 81.42 yen, little changed from 81.44 in New York Thursday, after the unit earlier plunged to a 15-year low of 80.89 yen.

 

China’s trade surplus falls to $16.9bn

http://www.bbc.co.uk/news/business-11530198

The gap between China’s imports and exports narrowed in September, official data has shown.

But analysts say the decline is unlikely to ease the pressure on Beijing to strengthen its currency.

The US has been among its strongest critics, claiming China deliberately undervalues the yuan, boosting China’s exports by making them cheap.

China’s trade surplus fell to a five-month low of $16.9bn (£10.7bn), down from $20bn in August.

Exports rose 25.1% year-on-year in September to $145bn, but the pace of growth was slower than the 34.4% growth seen in August.

Imports rose 24.1% year-on-year to a record high of $128.1bn, compared with August’s growth of 35.2%.

Starbucks to hike prices on ‘labor intensive’ drinks

NEW YORK (CNNMoney.com) — Starbucks drinks, long considered symbols of Americans’ penchant to overspend, are about to get even pricier.

The coffee giant said late Wednesday that it will raise the price of “labor-intensive and larger-sized” beverages because of soaring prices of green arabica coffee beans.

Starbucks (SBUXFortune 500) said green coffee prices are close to a 13-year high, and costs for its other raw ingredients, including dairy, sugar and cocoa, have been volatile.

As CNNMoney reported earlier this month, coffee futures have climbed more than 40% since June.

“[This has] completely altered the economic and financial picture of many players in the coffee industry,” Starbucks chief executive Howard Schultz said in a written statement. “We have thus far chosen to absorb the price increases ourselves and not pass them on to our customers. But the extreme nature of the cost increases has made it untenable for us to continue to do so.”

US creates $30bn small business fund

The US Senate has backed a bill that will establish a $30bn (£19.5bn) fund for small businesses.

President Obama’s Democrats won a 61-38 vote to pass the legislation, with backing from two Republicans.

The measure is designed to help open up lending for small businesses, cut their taxes and boost Small Business Administration loan programmes.

The new loan fund would be available to community banks to encourage lending to small businesses.

Supporters say banks should be able to use the fund to access up to $300bn in loans.

Coffee prices on the rise

NEW YORK (CNNMoney.com) — You may soon find yourself paying more for your morning coffee – if you aren’t already.

A trifecta of bad news has sent coffee futures soaring 44% since June, and companies such as Dunkin’ Donuts, Green Mountain and Maxwell House are passing on those costs.

Bad weather in South America is threatening crops. Brazil and top exporter Vietnam are talking about hoarding their stocks. And U.S. stockpiles are reportedly at 10-year lows.

That means higher prices for U.S. coffee companies, which, in turn, may mean higher prices for consumers.

Polish Economy Grew Faster in 2nd Quarter on German Expansion

Polish economic growth grew faster than expected in the second quarter as a weak zloty and recovery in western Europe spurred exports.

Gross domestic product rose 3.5 percent from a year earlier, compared with 3 percent in the previous quarter, the Warsaw-based Central Statistical Office said today. The result exceeded the 3.2 percent median estimate of 11 economists in a Bloomberg survey.

Poland, the only European Union member to avoid a recession in 2009, was aided by demand from Germany, where GDP expanded at the fastest pace in two decades during the second quarter. The EU forecasts Poland will outperform again this year, growing 2.7 percent, compared with an average of 1 percent for the 27-member bloc.

Nigeria to privatise power firm PHCN

Nigeria is to sell off the state power monopoly, PHCN, President Goodluck Jonathan has announced.

“We need a revolution in the power sector,” he said, in what was touted as a major policy speech.

Nigeria is one of the world’s largest oil exporters but lacks many basic services, such as a regular electricity supply.

Black-outs are common and those who can afford to, use generators.

Many business leaders say the lack of electricity is one of the biggest obstacles they face.

Meanwhile, many Nigerians joke that PHCN (Power Holding Company of Nigeria) really stands for Please Hold Candle Now.

Copper Demand Driven by Users Replenishing Inventories, BHP Billiton Says

Physical copper demand is being driven by consumers replenishing inventories amid a mixed outlook for commodities in the “short term”, BHP Billiton Ltd., the world’s largest mining company, said today.

“There is strong physical demand for some commodities such as copper where consumers are restocking and premiums continue to rise,” BHP Billiton said in an earnings statement to the Australian stock exchange. “There is weaker demand for those commodities where short-term demand is likely to be satisfied by inventory rather than primary supply,” the company said.

Ireland Long-Term Sovereign Credit Rating Cut by S&P

Ireland’s long-term sovereign credit rating was cut one step to AA- from AA by Standard & Poor’s, which cited the projected cost of supporting the nation’s financial sector.

“The negative outlook reflects our view that a further downgrade is possible if the fiscal cost of supporting the banking sector rises further, or if other adverse economic developments weaken the government’s ability to meet its medium- term fiscal objectives,” S&P said today in a statement.

S&P said its new projections suggest that Ireland’s net general government debt will rise toward 113 percent of gross domestic product in 2012. That’s more than 1.5 times the median for the average of euro zone sovereign nations, and “well above” the debt burdens the New York-based firm said it projects for similarly rated countries in the region such as Belgium at 98 percent and Spain at 65 percent.