20101109, Article, contributied by Juhye, Lyu

Bernanke Says Fed's Monetary Expansion Won't Spur `Super-Normal' Inflation By Scott Lanman and Steve Matthews - Nov 7, 2010 3:24 AM GMT+0900 Tweet (31) LinkedIn Share Print Email As recoveries from the subsequent global recession now prove uneven, Fed Chairman Ben S. Bernanke and his counterparts are focusing on the needs of their individual economies. Photographer: Andrew Harrer/Bloomberg Federal Reserve Chairman Ben S. Bernanke, adding to his defense of this week's expansion of record monetary stimulus, dismissed the idea the central bank will increase inflation higher than it prefers. "I have rejected any notion that we are going to raise inflation to a super-normal level in order to have effects on the economy," Bernanke said today in a panel discussion at a Fed conference in Jekyll Island, Georgia. "Our credibility must be maintained," and "it's critical for us to maintain inflation at an appropriate level," he said. Policy makers led by Bernanke, a former Princeton University economist who studied the Great Depression, decided Nov. 3 to resume large-scale asset purchases in an effort to reduce unemployment and avert deflation. The Fed is buying $600 billion of Treasuries through June after lowering the benchmark rate almost to zero and carrying out a $1.7 trillion first round of asset purchases that ended in March. "We're not in the business of trying to create inflation," said Bernanke, who spoke on the panel alongside his predecessor, Alan Greenspan, and former New York Fed President E. Gerald Corrigan, to an audience including more than a dozen current and former Fed policy makers. "Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation which I think we all agree would be a worse outcome," Bernanke said. Broached Idea New York Fed President William Dudley and Chicago Fed President Charles Evans broached the idea in speeches last month that the Fed could target higher-than-normal inflation temporarily as a way of trying to aid growth. Critics including Allan Meltzer, a Fed historian, say the central bank may not be able to control inflation resulting from the securities buying. Corrigan, 69, said that "even in the face of substantial margins of underutilization of human and capital resources, efforts to achieve an upward nudge in today's very low inflation rate make me somewhat uncomfortable." Corrigan was a policy maker under former Fed Chairman Paul Volcker, who raised interest rates as high as 20 percent to beat inflation, pushing the economy into the 1981-82 recession. 'Great Leaders' In prepared remarks distributed to attendees, Corrigan said he has a "very high degree of confidence in the Fed's ability to navigate through these uncharted waters" and that his concern about "low probability contingencies" doesn't detract from his "admiration and respect for the Fed and its tradition of great leaders past and present." Bernanke said the central bank's asset purchases are "just a different set of tools" for monetary policy aimed at increasing growth and inflation. "There's a sense out there that, quote, quantitative easing or asset purchases is something completely foreign" or "strange" and that "we have no idea what the hell is going to happen, and it's just an unanticipated, unpredictable policy," he said. "Quite the contrary, this is just monetary policy." The Fed's preferred gauge for consumer prices, which excludes food and energy costs, rose 1.2 percent in September from a year earlier, the slowest pace since 2001. Fed policy makers have a long-run goal of 1.7 percent to 2 percent inflation that they see as consistent with achieving legislative mandates for maximum employment and stable prices. Fed Chief The Fed chief spoke at a conference on Fed history sponsored by the Atlanta Fed and Rutgers University at the site of a secret 1910 meeting in which a senator and several bankers devised a plan which would provide some of the elements of the Federal Reserve Act signed in 1913. Bernanke singled out an opinion article this week by Meltzer in the Wall Street Journal sayingMilton Friedman, the Nobel-winning economist who died in 2006 and shaped the thinking of many Fed officials, would not support the Fed's decision to expand asset purchases. "We are doing everything Milton Friedman would have us do," Bernanke said at the conference. "What Milton Friedman would say is that the Federal Reserve is responsible for the stability of nominal aggregates including prices, and that means that particularly with respect to inflation, you don't want inflation to be too high but you also don't want it to be too low." Repeats Mistakes Meltzer, in a Bloomberg Television interview yesterday, said the Fed, by increasing stimulus, "repeats the kind of mistakes they made in the 1970s." "Much more often than not, the Fed has made mistakes in erring on the side of too little restraint and too much inflation," said Marvin Goodfriend, a former Richmond Fed research director who now works with Meltzer as a professor at Carnegie Mellon University in Pittsburgh. Now the Fed faces "some more two-sided risks," and "when you approach price stability, sometimes it is warranted to be worried about too little inflation," Goodfriend said after the panel discussion. Greenspan said the major lesson from the financial crisis is that U.S. banks need more capital to survive shocks. Banks operated with less capital because of an assumption they would be rescued by the government, he said. Lehman Brothers Holdings Inc. wouldn't have failed with adequate capital, he said. "Rampant fraud" was also an issue, he said. Lack of Trust "Fraud creates very considerable instability in competitive markets," Greenspan said. "If you cannot trust your counterparties, it would not work." Today's remarks are Bernanke's third set of public comments since the decision by the Fed's Open Market Committee. Yesterday, he said to students in Jacksonville, Florida, that theunconventional policy will avert a decline in inflation and spur the U.S. recovery. It has the goal of reducing borrowing costs, adding stimulus and, "we hope, creating a faster recovery and an inflation rate consistent with long-run stability." Bernanke, 56, chairman since 2006, said in a Washington Post opinion article hours after the decision that the central bank "will take all measures necessary to keep inflation low and stable." The Fed chief came under fire yesterday from officials in Germany, China, and Brazil who said his plan to pump cash into the banking system will jar other economies and fail to fuel U.S. growth. To contact the reporter on this story: Scott Lanman in Jekyll Island, Georgia atslanman@bloomberg.net; Steve Matthews in Jekyll Island, Georgia atsmatthews@bloomberg.net. To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

20101102, quotation, contributed by Juhye Lyu

A human being has a natural desire to have more of a good thing than he needs. - Mark Twain

Californians lean toward legalizing marijuana[from LAT by Jihwan Kim]

Despite rejecting Prop. 19, Californians lean toward legalizing marijuana, poll finds

November 4, 2010 | 3:12 pm

 

California voters rejected Prop. 19, but a post-election poll found that they still lean toward legalizing marijuana for recreational use and, if young voters had turned out as heavily on Tuesday as they do for presidential elections, the result would have been a close call.

 

The survey, conducted by the polling firm Greenberg Quinlan Rosner, suggests that California voters had qualms with this initiative, but remain open to the idea. A majority, 52%, said marijuana laws, like alcohol prohibition, do more harm than good.

 

"There's a fair amount of latent support for legalization in California," said Anna Greenberg, the firm's senior vice president. "It is our view, looking at this research, that if indeed legalization goes on ballot in 2012 in California, that it is poised to win."

 

Voters think marijuana should be legalized, 49% to 41%, with 10% uncertain, the poll found, but were evenly split over whether they thought it was inevitable in California.

 

"The question about legalizing marijuana is no longer when, it's no longer whether, it's how," said Ethan Nadelmann, the executive director of the Drug Policy Alliance. "There's a really strong body of people who will be ready to pull the lever in the future."

 

Nadelmann and the Drug Policy Alliance played a key role in the campaign, bringing a late rush of money to help fund a final advertising blitz.

 

The poll was paid for by Peter B. Lewis, a retired insurance company executive. Lewis donated $159,005 to the Drug Policy Alliance's campaign for Proposition 19 and was one of the backers of California's 1996 medical marijuana initiative.

 

The poll also found that a quarter of those who voted on Proposition 19 had considered voting the other way, suggesting that a different initiative or a different campaign could change the result.

 

"We have fluidity," Greenberg said. "The issue does not have the kind of hard and fast kind of polarization that we've seen with other so-called moral or social issues."

 

Among voters who opposed Prop. 19, 31% said they believe marijuana should be legalized or penalties reduced, but they objected to the some specifics of the initiative.

 

The poll did not probe what it was about the measure that did not appeal to these voters. "Among the no votes, we're seeing a significant proportion who we believe will ultimately support marijuana legalization in the future," Nadelmann said.

 

Prop. 19 would have allowed adults 21 and older to grow up to 25 square feet of marijuana or possess up to an ounce. But it also included a provision to protect marijuana users from discrimination that opponents, including the Chamber of Commerce, ridiculed. They claimed it would allow nurses and bus drivers to come to work stoned, which the campaign disputed.

 

The poll found some evidence that this issue may have cut into the initiative's support. Voters said by 50% to 44% that employers should have the right to fire workers who test positive for marijuana even if they arrive sober and ready to work.

 

The initiative was the brainchild of Richard Lee, a medical marijuana businessman in Oakland who paid professionals to draft the measure and made the key decisions on its approach.

 

Lee chose to give cities and counties the power to approve marijuana sales, not the state Legislature, a system that would allow a patchwork approach much like medical marijuana. The poll suggested that voters prefer that local control approach, finding that 44% trust city and county governments more to control marijuana, while 38% trust state government more.

 

Greenberg Quinlan Rosner surveyed 796 voters who participated in the election by phone between Oct. 31 and Nov. 2. The poll has a margin of error of plus or minus 3.5 percentage points.

 

-- John Hoeffel

 

 

북미

20101102 Article, "Beijing Sees Resistance to Census", contributed by Kyung Jin Lee

<Kyung Jin Lee>

OCTOBER 31, 2010

Beijing Sees Resistance to Census

Workers say that residents are concerned about privacy and don't want to disclose information to the government

 

By JEREMY PAGE

BEIJING—China's national census, which aims to update the official count for the world's largest population, will also illustrate the increasingly mobile society's growing sense of privacy—and distrust of their government.

Communist Party leaders hope the ten-yearly survey, set to begin Monday, will provide an unprecedented amount of information about the lives of its citizens, who numbered 1.3 billion in 2000. In particular, the government will try to calculate exact figures for the tens of millions of migrant workers who have flooded into cities from the countryside, and for the millions of children who have been born in violation of China's one-child policy.

But when six million census workers conducted preparatory surveys in August and September, they met a surprising level of resistance from people, most of whom didn't hesitate to cooperate 10 years ago.

Li Fengying, a 60-year old retired woman who worked on the census 20 years ago, was hired again this year to gather information on 117 households in the building where she lives in central Beijing. "It's really not an easy job! It didn't go smoothly and I suffered a lot of cursing," she said in an interview with The Wall Street Journal.

She said 30 of the 117 households either refused to open their doors, or wouldn't show official documents. Many were migrant workers who were renting the apartments, in some cases sharing them among four or five families, she said.

"In the past, the population structure was very simple, most of the residents in the building were permanent residents, and we knew each other very well," she said. "But now there are many non-natives or migrants living here. And people's minds are quite different from in the past. They have their own ideas and don't like to disclose their private affairs." 

Vice Premier Li Keqiang, who is overseeing the census, has made a personal appeal for cooperation. Official posters have been plastered across the country with messages such as: "Mom—don't forget to tell the census worker: I am also a target of the census!"

Still, some census workers facing resistance have resorted to counting beds and toothbrushes in migrant workers' dormitories, according to state media. 

Such problems reflect the social changes that have swept across China over the past decade, said Zhang Yi, a demographer at the Chinese Academy of Social Sciencies. In 2000, the majority of people still depended on the state for work, housing and welfare. Today, most people work in the private sector and own their own homes; many regard the state as more of a hindrance than a help in their everyday lives.

One of the government's biggest concerns is the migrant population, which has provided the cheap labor to drive economic growth, but also represents the biggest potential source of social unrest. The 2000 census found that about 800 million people lived in the countryside, but it counted migrant workers not where they worked but in their home provinces where they were registered to receive social services. 

Annual surveys have updated the urban and rural population estimates but Chinese experts say that data is often skewed by local officials who under-report migrant numbers to boost economic statistics such as income per capita. This year's census will try to get around these problems by recording where migrants live and work, said Feng Nailin, director-general of the department of population and employment statistics of the National Bureau of Statistics. 

The problem, however, is that migrants are reluctant to cooperate for fear being evicted or losing their jobs, while employers are also reticent because they worry about being taxed or fined for violating labor regulations.

"The migrant population is a rather big problem for our census," Mr. Feng told journalists earlier this month.

The other problem is how to count children who have been born in violation of the one-child policy and are therefore not qualified to receive education, health care and other public services unless their parents pay a fine. The government wants to include them to calculate accurately the country's birth rate and gender balance—key indicators that could decide whether Beijing relaxes the one-child policy next year—so it has been offering discounts of up to 70% on the fines it usually charges. 

But while wealthier urban couples appear to be responding to that, they also tend to be the most reluctant to give other personal information, especially relating to their property and finances.

 A typical case is Jack Dou, 41, who owns a gift-making company in Beijing and whose wife gave birth to a second daughter in April. He agreed to register his second child and paid a fine of 186,000 yuan—a 30% discount—but said he had planned to pay the higher fine anyway. He also said he had answered honestly when census workers first came to his home, but had reservations about answering more detailed questions, especially about his finances. 

"People don't want to give their private information to the government," he said. "Nowadays, we rely on the government less and less."

 

Article Assigned for the 2nd of Nov. 2010, By Park Ji Young

This copy is for your personal, noncommercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of this article now.

---

October 27, 2010

Merkel Pushes E.U. Treaty Change

By STEPHEN CASTLE

BRUSSELS — After eight years of bickering over the latest rewrite of the European Union's labyrinthine treaty, the last thing most of its 27 nations want is to do the same thing again.

The question is whether they dare tell that to Angela Merkel, the German chancellor. Mrs. Merkel, with the support of Nicolas Sarkozy, the French president, has demanded alterations to the Lisbon Treaty, which came into force less than a year ago, to strengthen management of the euro.

A two-day summit meeting in Brussels, starting on Thursday, will be dominated by the proposed alterations. Some officials are suggesting that any treaty changes should be technical and introduced through what has been labeled a "treaty change-lite" option, which would shortcut normal procedures.

With tensions high, the meeting will test the ability of Germany and France, the leading architects of European integration, to achieve their aims despite broad opposition. Already, their decision to open up the treaty, which was announced last week in Deauville, a French seaside resort, has prompted a backlash.

On Wednesday, Viviane Reding, the E.U. justice commissioner, described the declaration as "irresponsible," reminding France and Germany that the European Union is made up of 27 nations. About a dozen countries voiced reservations at a meeting of E.U. foreign ministers this week.

In the Deauville declaration, France agreed to support a change to the E.U. treaty, while Germany accepted France's call to water down proposals to punish nations that fail to control their finances.

Mrs. Merkel insists that treaty change is necessary to set up a permanent mechanism to support euro-zone nations close to default, and to put in place insolvency procedures.

But, since treaty alterations require approval from each E.U. state, some fear that this could lead to unwinnable referendums.

According to Joachim Fritz-Vannahme, director of European projects at the Bertelsmann Foundation, a German research institute, the Deauville declaration was a presentational error. "One cannot take a walk on the beach and, suddenly, announce you have found the way to save the euro — you cannot proceed like that," he said.

Yet Mrs. Merkel is in a tricky position. While the economic crisis has shown Germany that it needs to deepen economic cooperation, it is also, Mr. Fritz-Vannahme said, battling with the fact that "for the first time since the Second World War, there is an overwhelmingly Euroskeptical feel in the German political world and public opinion."

In May, after relentless pressure from the financial markets, Mrs. Merkel reluctantly helped create a large, but temporary, crisis fund for the euro zone.

To make this permanent when its mandate expires, in 2013, Mrs. Merkel has said that she requires treaty change to satisfy Germany's constitutional court.

Her plan would require nations to restructure their debt, which would mean losses for private-sector creditors, before getting access to E.U. funds. They could also be deprived of their E.U voting rights, a move to satisfy German public opinion that the measures are tough.

Other changes to the rules governing the euro are likely to be agreed this week. These will be based on changes proposed by a committee led by Herman Van Rompuy, the president of the European Council, the body where national governments meet.

These would make debt a more important factor and create a new framework of penalties for nations that fail to stick to debt and deficit rules. Countries would be required to lodge funds with the European Commission and would first lose interest on them, then forfeit them completely, if they continue to be in breach of the rules.

But the political debate will revolve around whether or not to rewrite the Lisbon Treaty, which was supposed to be the final word on institutional change for many years.

Some say changing the treaty is unnecessary. Guy Verhofstadt, a former Belgian prime minister and a senior member of the European Parliament, said Wednesday that most changes would be introduced under clauses in the Lisbon Treaty. "Let's examine the possibilities we see in the treaty," he said.

The two-day summit meeting is unlikely to take a firm decision but will probably leave Mr. Van Rompuy to examine the options for treaty change.

But ultimately the most likely solution is the use of a simplified revision procedure, which would achieve most, but not all, of the alterations Germany wants.

This would allow heads of government to make changes without convening a formal conference of the 27 nations or setting up a wider consultative committee. It would also avoid the need for any referendums, although it would not be suitable for more far-reaching changes, such as the proposed change under which governments would lose their E.U. voting rights if they stayed in breach of the rules.

Luxembourg has already ruled out the idea of suspending voting rights, but Mr. Fritz-Vannahme said he believed that this measure was not Mrs. Merkel's primary objective.

In Berlin on Wednesday, however, Mrs. Merkel gave no hint of backing down, Reuters reported. "The new rescue mechanism has to be legally sound," she said. "This will only succeed if there is a change in the E.U. treaties."