Democracy & Civics

Newspaper D-Day in 2010?

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Urban newspapers, which are facing a startlingly bleak selling environment, are in such decline that some cities may lose their local newspapers completely within a couple of years. Editor and Publisher magazine reports that low advertising revenue is a major factor driving huge debt among many newspapers. That may force some to default on payments and fold within the next year or two. Two major newspaper companies — the McClatchy Company and Tribune Company — already have dismal credit ratings. In a recent media outlook report, credit ratings firm Fitch Ratings said, “Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.”

Democracy & Civics

Nonprofits Brace for Economic Slump

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Nonprofit organizations across the United States are being hit hard by the economic crisis, as contributions from foundations, corporations and private donors diminish. Even as demand for social services increases, nonprofits are being forced to cut staff and reduce operations, according to Crain’s New York Business. Professor Paul Light of New York University projects that at least “100,000 nonprofits nationwide will be forced to close their doors in the next two years” due to the economic downturn, and called for foundations to increase their annual giving. As charitable donations decline, nonprofit groups may be forced to help each other survive through strategies like back-office consolidation, strategic alliances and health- care-plan mergers. Clara Miller, chief executive of the Nonprofit Finance Fund, which provides loans and financial services, said that a boost from foundations might not be enough given cuts in government spending.

Economy

Credit Crisis Doesn't Break Scandinavian Ice

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The current financial crisis may be affecting economies around the industrialized world — but there’s one region that doesn’t seem overly worried: Scandinavia. Sweden and Finland, which suffered through a similar financial mess in the early 1990s, are apparently now well-positioned to survive the current woes — and despite the struggles facing Iceland and other neighboring nations. “Let me be clear that Sweden differs from some other European countries,” Swedish finance minister Anders Borg told London’s Financial Times. “We don’t have any failed banks and thus reconstruction needs are not as great.” Next door, Norway is feeling the pain — up to a point.

Economy

Poking Holes in the Golden Parachute

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The Wall Street bailout bill recently passed by Congress includes a provision that puts a $500,000 cap on the executive pay that the leaders of affected companies can deduct from their taxes. According to the Christian Science Monitor, any executive pay on Wall Street exceeding that cap is taxable — yet some are concerned Wall Street executives will find loopholes that allow them to walk away with millions. Initial versions of the taxpayer-funded bailout had no executive pay restrictions, but outrage from citizens and politicians alike forced Treasury Secretary Henry Paulson to make revisions. Although it’s possible the executive salary cap could reverse the excessive trends of previous decades, Doug Elmendorf, a Brookings Institute expert, said “These are the most clever people when it comes to writing financial contracts. They will hire people to figure out how to get around it.”

Economy

Icelandic Economy Headed for Deep Freeze?

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Iceland is selling off foreign-owned assets in an attempt to ward off national bankruptcy. An article in the Telegraph newspaper said all of Iceland’s banks and investment firms have been blocked from the national stock market and urged to get rid of overseas investments and assets. Iceland’s currency — the Krona — has lost “more than half” its worth over the last few months. In a televised address, Prime Minister Geir Haarde said, “There is a very real danger, fellow citizens, that the Icelandic economy in the worst case could be sucked with the banks into the whirlpool and the result could be national bankruptcy.” The country’s bank debts — most of which are related to foreign investments — are more than eight times the national gross domestic product.

Economy

Zimbabwe Currency Crisis Peaks

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More than 600 shops and services are now licensed to trade using foreign currency in Zimbabwe, the southern African country with the highest rate of inflation in the world. The International Herald Tribune reported that Zimbabwe’s Central Bank authorized the use of foreign moneys, such as the U.S. dollar and South African rand, which are already common in the black market. Zimbabwe’s government, still reeling from a long-term economic crisis, hopes the move will build up supplies of food and basic necessities in local markets. An inflation rate of 11 million percent has caused many Zimbabweans to cross the border into neighboring countries to buy corn meal, medicine, cooking oil and fuel. Commodities are in such short supply, the article said, that aid agencies fear close to two million Zimbabweans will need food supplies in October.

Economy

'Fair Trade' Cola Gains Ground in Europe

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A British cola called Ubuntu is said to be the first of its kind to follow “fair trade” practices, including ecological sustainability, equal market prices and improved work conditions for bottom-rung producers and laborers. Africa’s Business Daily reports that the soft drink, named after a Bantu word meaning “humanity,” has had success in cafes, shops and grocery stores throughout the United Kingdom, Ireland, Sweden and Norway. “Our mission is to propel fair trade into iconic and mainstream markets,” said co-founder Miranda Walker. The fair trade label, often found on basic commodities like tea and coffee, has become increasingly popular in recent years and appeals to consumers who want to buy ethically — something seven out of ten Europeans say is important to them at least part of the time. Ubuntu Trading Company will use fair trade sugar sourced from Africa, and says it plans to invest some of its profits back into sugar-producing communities.

Economy

Mind the (Wealth) Gap in the U.K.

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A Cambridge University professor said economic disparity between London and the rest of Great Britain is at its widest since World War II, the Telegraph reports. Citing a recent study, Prof. Ron Martin announced at the Royal Geographic Society that household income levels in the London area are 25 percent greater than the rest of the country. This contrasts with the rest of Europe, where he wealth gap has been narrowing. Martin indicts the ruling Labour Party for not living up to its promise to correct these inequalities. He also said the north lagged far behind in boom times and is doing worse since the housing market failed.

Economy

India: Farms or Factories?

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Tata Motors Ltd., which plans to build the world’s cheapest car, said work on a new factory in India’s West Bengal state would not resume even though long-term protests that halted construction recently ended. As reported in the Christian Science Monitor, the state government finally reached a compromise over farmland that protesters say was taken forcibly from local farmers to make way for the factory. While some farmers agreed to sell their land, the communist-led state of West Bengal forcibly removed others as a way to lure new business to the state. Under the compromise, the government agreed to give farmers more compensation and to return some of the land that was forcibly taken. Tata planned to begin construction of the $2,500 Nano car in October, but company officials said they would not reopen the plant because of “limited clarity on the outcome of the discussions between the state government of West Bengal and the representatives of the agitators.”

Democracy & Civics

San Francisco's 'Black Exodus' Gathers Steam

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A new study has found that African Americans are abandoning San Francisco in droves, faster than any other U.S. city. The black population has decreased from 13.4 percent in 1970 to 10.9 percent in 1990 and comprises 6.5 percent of San Francisco’s population in 2005 — the latest year figures were available. The task force also projects the numbers to fall still further, to 4.6 percent by 2050. Speakers at a hearing in the Bayview-Hunters Point neighborhood said that the findings are just the latest in a series of reports dating back to the 1970s, and validated their fears about an “black exodus” that could almost eliminate the city’s African American population. Critics blamed the problem on a dearth of economic opportunity and African-American culture, combined with skyrocketing housing prices driven by gentrification.