Gov. Jerry Brown asks PUC to pass electric bill surcharge

 

Gov. Jerry Brown is asking his appointed members of the California Public Utilities Commission to come up with a way to continue tacking a surcharge on residential and commercial electric bills to pay for an energy efficiency program that did not get renewed by the Legislature last month.

The $400-million-a-year program is set to expire at the end of the year.

"We cannot afford to let any of these job-creating programs lapse," Brown said in a letter to PUC President Michael Peevey. The surcharges -- $1 to $2 a month on a typical residential bill -- pay for a 14-year-old levy called the Public Goods Charge. It pays for retrofitting structures to make them use less energy, for renewable energy subsidies and for research.

"I request that you take action under the commission's authority to ensure that programs like those supported by the Public Goods Charge are instituted -- and hopefully at their current levels," Brown wrote to Peevey.

The PUC will consider opening a legal and administrative proceeding on Brown's request at its Oct. 6 meeting in San Francisco, said spokeswoman Terrie D. Prosper.

"We're pursuing the fastest path to consider maintain funding levels for these programs and policies already underway," Prosper said.

Some environmentalists said they're supporting the governor's effort to revive the Public Goods Charge.

However, Sierra Club lobbyist Jim Metropulos lamented that Brown did not push earlier and more energetically to get enough bipartisan legislative support to pass the bill.

"We were disappointed that the governor put [his bill] out late, if it was one of his priorities," he said.

RELATED:

Designs on energy efficiency

State should extend energy levy

Light-bulb standards equal energy efficiency

-- Marc Lifsher

Photo: A man looks at energy efficient washing machines at a mall in Baldwin Hills. Credit: Katie Falkenberg / For The Times

Governor signs bill raising doc fees on new and used cars

The documentation fees that auto dealers charge car buyers will go up at least $25 and consumers will get new regulatory protection under legislation signed by Gov. Jerry Brown.

AB 1215 by Assemblyman Bob Blumenfield (D-Woodland Hills) and signed by Brown on Monday allows auto retailers to raise the documentation fees charged for processing auto purchases and lease agreements to $80 from $55 for new- and used-car purchases and from $45 for car leases.

Dealers will now be required to run the vehicle identification number of any used auto for sale on their lots through the National Motor Vehicle Title Information System to check whether the auto has a so-called branded title. Any vehicles showing up as having been totaled or bought back through a lemon law or a victim of some other catastrophe would get a red window sticker warning potential buyers of the auto's history.

Both the new fees and vehicle history checks start July 1.

Insurance carriers, repair shops, towing companies and salvage yards must report totaled vehicles to the database, overseen by the U.S. Justice Department.

The legislation was supported by law enforcement agencies, consumer groups and the California New Car Dealers Assn.

“Buying a car comes second only to the commitment that comes with buying a home,” Blumenfield said.  “With working families striving to stretch their dollars in this tough economy, there couldn’t be a better time to help ensure that family cars are a good and safe investment.

Blumenfield said California is the nation’s largest car market.  Last year, more than 800,000 used cars were sold through dealerships.

Consumer advocates also liked the bill.

“For the first time, auto dealers will be required to provide vital information about a vehicle’s safety, reliability and worth before consumers even start negotiating. In California, millions of the most hazardous cars will be marked with a red sticker to warn consumers that they merit close scrutiny or should be avoided," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety.

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Auto sales rise in August

Consumer guide to electric vehicles

Can the auto industry prevent a recession?

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Assemblyman Bob Blumenfield (D-Woodland Hills), left, and state Sen. Mark Leno (D-San Francisco) at a state budget hearing at the Capitol on Feb. 23. Credit: Rich Pedroncelli / Associated Press

California seeks $17 million in back wages from ZipRealty

California's labor commissioner has filed a $17-million lawsuit for back wages against a San Francisco Bay Area real estate brokerage, ZipRealty Inc., that markets homes statewide and nationally using an Internet-based sales strategy.

The case is the largest minimum wage enforcement action in California history, according to the California Department of Industrial Relations.

The complaint filed in Alameda County Superior Court accuses ZipRealty of Emeryville of not paying minimum wage and overtime pay to hundreds of agents throughout California.

The lawsuit seeks about $7.5 million in unpaid minimum wages, $1.3 million in unpaid overtime and more than $9 million in damages and penalties.

"In times like these, enforcement of the minimum wage is critical to maintaining a floor that allows workers to survive," California Labor Commissioner Julie Su said. "This enforcement is important not just for employees but for hardworking employers who shouldn't have to compete against law breakers."

The suit is related to a September decision by a Kern County Superior Court judge that ruled that local ZipRealty agents frequently received no pay at all, even though as employees they were entitled to get at least minimum wage for all hours worked.

During the trial, ZipRealty argued that it did not need to pay minimum wage or overtime because the people involved were "outside sales persons." The court disagreed, noting that the agents should have been paid by law because they spent less than half their time working away from their offices.

ZipRealty lawyers did not respond to requests for comments on the lawsuit filing.

The ZipRealty case is a symptom of growing problems in the recession-wracked labor market, said Christine Baker, acting director of the Department of Industrial Relations.

"Violations of minimum labor standards are now occurring in a wide variety of occupations, even affecting employees outside traditional low-wage occupations," she said.

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L.A.'s living wage ordinance isn't a job killer

Ganging up on guest workers

On Labor Day, he's thankful to have a job

-- Marc Lifsher

 

 

His stock is cheap, so Warren Buffett will buy it

There are many differences between Warren Buffett’s company and most others -– starting, of course, with its outsized success.

But here’s another: Berkshire Hathaway Inc. announced Monday that it will buy back stock simply because Buffett thinks it’s cheap

Berkshire said it will acquire an undisclosed amount of stock, provided that the purchase price is within 10% of book value and that the company's cash holdings exceed $20 billion. The buyback will apply to Berkshire's A and B shares, and will “continue indefinitely,” the company said in a statement.

Berkshire currently has about $43 billion in cash. Its book value is now about $98,700 a share, according to Bloomberg.

Berkshire’s Class A shares surged $8,129, or 8.1%, to $108,449. The stock closed at a 52-week low of exactly $100,000 on Thursday. Class B shares rose $5.72, or 8.6%, to $72.09. Both share classes are down 10% for the year, compared with a 7.5% decline for the Standard & Poor’s 500 index.

Stock buybacks among big companies have increased the last two years, and topped $100 billion in the second quarter for the first time since early 2008, according to Standard & Poor's. The $109.2 billion total was up 22% from the first quarter and 41% from a year ago.

But those numbers are a tad misleading.

Rather than gobbling up shares because they have fallen to irresistable lows, many companies are doing so primarily to offset the effect of employee stock options, according to S&P.

When companies issue options, they need to buy back an equal number of shares to prevent their total number of shares from rising. An increase in total shares would dilute earnings per share, which no company wants to do.

But few company managements are buying shares because they think they’re a bargain.

“Few companies are venturing outside of the box to purchase additional shares, as was the common practice from late 2005 through mid-2007,” said Howard Silverblatt, senior index analyst at S&P.

There would be nothing better for investors than for Buffett to start a trend.

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Stock buybacks may not help the market much

Young people (seem to) support Warren Buffett's tax idea

Treasury bond interest rates jump for second day

-- Walter Hamilton

Photo: Warren Buffett. Credit: Lucas Jackson/ Reuters

 

Treasury bond interest rates jump for second day

U.S. Treasury bond yields are rising for a second straight day as some investors and traders take profits after last week’s big bond rally.

A rebound in stocks also is pulling some money out of bonds and into equities.

The 10-year Treasury note yield, a benchmark for mortgage rates, was at 1.90% at about noon PDT Monday, up from 1.83% on Friday and up from a 60-year low of 1.72% on Thursday.

The 30-year T-bond (charted below) rose to 3.00% from 2.90% on Friday and 2.80% on Thursday.

Long-term Treasury yields plunged Wednesday and Thursday after the Federal Reserve said it would shift its massive bond holdings more toward longer-term securities, hoping to pull interest rates on those issues down further to help the economy.

The Fed also gave investors another reason to head for the relative safety of bonds: In their post-meeting statement Wednesday, policymakers warned of "significant downside risks to the economic outlook."

That triggered a blistering sell-off in stocks that drove the Dow Jones industrial average down a total of 5.9% over two days.

But stocks stabilized Friday, and they’re rallying Monday as investors once again get their hopes up that Europe will avoid a financial collapse. The Dow was up 200 points, or 1.9%, to 10,971 at about noon PDT.

Bill O’Donnell, government bond strategist at RBS Securities in Stamford, Conn., said there is “a lot of chatter” on Wall Street about big investors allocating some of their assets from bonds to stocks as the end of the quarter approaches Friday. The Dow is off nearly 12% for the quarter so far, while bonds have rocketed in value as market yields have tumbled.

But O’Donnell said Treasury bond yields are likely to head lower again unless the economy reaccelerates. He noted that the Fed’s planned long-term bond purchases haven’t even begun yet: That $400-billion program will probably begin next week and last through June.

RELATED:

Stocks rally on hopes for solution in Europe

Fed revives 'Operation Twist' to pull down long-term rates

Q&A: How the Fed move could affect the economy and markets

-- Tom Petruno

Twitter.com/tpetruno

Queen Mary gets new management company

A Newport Beach hospitality company that manages hotels throughout the state has been hired to manage the iconic Queen Mary docked in Long Beach Harbor.

Evolution Hospitality, which manages a Courtyard by Marriott hotel in Anaheim and a Hard Rock Hotel in San Diego, among others, took over Monday managing the retired ocean liner, now a tourist attraction and hotel. The company is the third management firm to operate the ship since 2007.

The city of Long Beach bought the Queen Mary in 1967 from the Cunard Line shipping company. Since then, the city has brought in several firms -- including Walt Disney Co. -- to manage the ship and develop about 45 acres of adjacent oceanfront property. In addition to the hotel, the ship features three sit-down restaurants and several ornate ballrooms.

The current lease operators, New York-based Garrison Investment Group, hired Delaware North Cos., a New York hospitality and food service company, in 2009. But Delaware North announced in April that it was ending its relationship with the ship.

Delaware North said it had achieved "its goals of rebranding the attraction with targeted marketing, renovation of the ship’s staterooms, as well as some of the restaurants and meeting spaces. These have resulted in increased occupancy and higher revenue in lodging, food and beverage, retail and attractions."

Before Delaware North, Illinois-based Hostmark Hospitality Group operated the Queen Mary from 2007 to 2009.

A spokeswoman for Evolution said the company hopes to take advantage of its familiarity with the hotel market in Southern California to increase revenue at the Queen Mary.

-- Hugo Martin

Photo: The Queen Mary. Credit: Los Angeles Times

 

 

Fed official says central bank should keep trying to boost growth

Although the Federal Reserve's efforts to stimulate the economy and boost job creation haven't had great success so far, that shouldn't discourage the central bank from continuing its efforts, Fed Governor Sarah Bloom Raskin said Monday.

Her message was a version of the old adage, "If at first you don't succeed, try, try again."

In a speech at the University of Maryland, Raskin said that although the Fed's easy-money policies have succeeded in keeping interest rates down, their effect on growth and job creation have been "somewhat more muted than I might have expected."

The reasons for that could include the trouble banks and consumers have had accessing credit as well as the oversupply of housing caused by the crash of the real-estate market, she said.

But, Raskin said, the conclusion shouldn't be that more monetary easing wouldn't help.

"Indeed, the opposite conclusion might well be the case -- namely, that additional policy accommodation is warranted under present circumstances," she said.

Raskin, an Obama nominee who took office in October, has supported Fed Chairman Ben S. Bernanke's controversial efforts to try to stimulate economic and job growth.

The Fed's efforts have been sharply criticized as fueling inflation, and top congressional Republican leaders wrote to Bernanke last week urging him against "further extraordinary intervention" in the economy.

But Bernanke has been undeterred and has continued to pursue new strategies. They include a $400- billion initiative approved last week to sell some short-term Treasury bonds in its portfolio and buy longer-term bonds in hopes of reducing long-term interest rates.

Raskin was one of six members of the Fed's Open Market Committee that approved the plan, dubbed Operation Twist. Three members voted against it.

RELATED:

Treasury bond rates rise after diving on Fed plan

Fed seeks economic boost by shifting its bond mix

GOP leaders urge Fed to back off from more stimulus

-- Jim Puzzanghera 

Photo: Federal Reserve Gov. Sarah Bloom Raskin. Credit: Federal Reserve

 

Delegating Economic Policy to the Technocrats, and Away from Democracy

In a column in The New Republic, Peter Orzsag, President Obama’s former budget director, argues for making the country’s policy-setting less dysfunctional by making it “less democratic.” One means for reducing politicized gridlock, he says, is to delegate more authority to “depoliticized commissions” of experts.

This is similar to the rationale behind establishing the Federal Reserve as an independent body: The Fed, at least theoretically, is shielded from short-term political interests. It can instead make decisions based what is good for the long-term interest of the economy, as determined by immutable economic laws and objective academic research. (In reality, of course, there have been many attempts to put political pressure on the Fed over the years, and within the central bank there is still broad disagreement about what’s best for the long-term interest of the economy.)

CATHERINE RAMPELL

Dollars to doughnuts.

Mr. Orszag also notes some other expert commissions, such as the military-base closing commissions, and the Independent Payment Advisory Board (IPAB), created by last year’s Patient Protection and Affordable Care Act to make changes to the Medicare payment system. The military-base closing commissions have generally been effective, and the jury is still out on the nascent IPAB.

Dollars to doughnuts.

On narrowly defined (and often technical) policy issues, expert panels can be useful. But as I wrote in an article last year about politicians’ poor incentives, delegating policy authority to technocratic panels is more problematic when dealing with larger economic matters that involve social value judgments, like austerity measures and tax reform.

These policy areas may sound like dry academic subjects. But they are thoroughly infused with, and ultimately shaped by, moral beliefs.

There are, after all, infinite combinations of spending cuts and tax increases that can add up to the same bottom line. Deciding what should get trimmed and what taxes should be increased or decreased involves questions of favoritism, welfare, compassion, fairness and all sorts of other subjective judgments not answerable by the “laws” of economics.

It’s not clear that a doctorate in economics (or, for that matter, in theology) gives a person any more moral authority than anyone else. That’s why such decisions are decided through a republican democracy — both lower case — and not by genius academics, however messy and dysfunctional the resulting process may be.

New home sales stuck at the bottom in August

Sales of newly built homes in the U.S. appear to be stuck at the bottom.

The August read on new home sales showed properties selling at a seasonally adjusted rate of 295,000, down 2.3% from a revised July rate of 302,000 and just 6.1% above August 2010, according to the Commerce Department.

"With job growth at a standstill, the stock market swinging wildly, Congress wrangling over the debt ceiling and the euro zone’s problems sending consumer confidence down, sales of new homes are slipping from an already weak pace," Celia Chen, director of housing economics at Moody’s Analytics, wrote in a note Monday morning. "New-home sales fell below the 300,000 mark in August and are nearing the cyclical (and 48-year) low of 278,000 that sales hit in August 2010."

Patrick Newport, U.S. economist with IHS Global Insight, said that the trend for new home sales has been flat for the last 16 months.

"This year is shaping up to be the worst year on record for new home sales," Newport wrote in a note.

An estimated 162,000 newly built homes were on the market in August, representing a supply of a little more than six months and two weeks. A supply of about six months typically represents a healthy market, so if sales do pick up in a meaningful way then new construction is likely to feel a boost.

The median sales price of a new home, which is the point at which half the new homes sold for more and half for less, fell nearly 9% to $209,100 in August. That was the lowest price since October.

The steep drop in prices indicates that builders are struggling to attract buyers from even cheaper so-called distressed properties, homes that are foreclosures or have a borrower in default.

-- Alejandro Lazo

Twitter.com/AlejandroLazo

RELATED:

New-home slump keeping door shut on U.S. recovery

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Photo: A Meritage Homes Corp. for sale sign lies on the ground near a construction site recently in Gilbert, Ariz. Credit: Bloomberg

Losing Faith in Government

Washington’s dysfunctional political climate not only makes it harder for Congress to pass sound economic policy. It also means that whatever policies Congress manages to pass may be ineffective anyway, since Americans have lost so much confidence in their government’s ability to help.

CATHERINE RAMPELL

Dollars to doughnuts.

Americans’ confidence in their government is at historic lows, according to Gallup’s annual governance survey.

Dollars to doughnuts.

The poll of 1,017 adults, conducted in early September, found that 81 percent of Americans are dissatisfied with the way the country is being governed, the highest share since the question was first asked in 1972.

Additionally, 69 percent of Americans say they have little or no confidence in the legislative branch of government, also a record high, and nearly three times the share of people who said this in 1972.

Americans estimate that the federal government wastes 51 cents of every dollar it spends, the highest number on record since that question was first asked in 1979. (Because the margin of sampling error was plus or minus four percentage points, however, that is not a statistically significant difference from last year’s poll, when Americans said 50 cents of every dollar the government spent was wasted.)

Almost half of Americans (49 percent) believe the federal government “poses an immediate threat to the rights and freedoms of ordinary citizens.” In 2003, less than a third of Americans said they believed this.

Perhaps most worrisome, Americans’ trust and confidence in the government’s ability to handle policy problems has plummeted.

The light green line above shows that just 43 percent of Americans say they have “a great deal or fair amount” of trust in the federal government to handle domestic problems. That is lower than it was at any time in the past four decades.

If we have another federal government shutdown in the next few days, which is entirely possible, these sentiments will only get worse.

My concern about these survey responses isn’t that they might hurt politician’s feelings. It’s that, in order for government policy to be effective, people must believe it will be effective. This is as true for economic policy as it is for anything else.

In particular, part of the reason that economic stimulus works is that it gives consumers and businesses confidence that the economy will improve. That belief becomes self-fulfilling as they feel more comfortable increasing their purchases and investments.

Likewise, if Americans believe that Congress cannot be counted upon to do anything that will help the economy, nothing that Congress does — no matter how well designed and well executed — will succeed in helping the economy. Perception matters.

Boeing delivers first 787 Dreamliner to All Nippon Airways

The world’s first passenger-ready Boeing Co. 787 Dreamliner was delivered to Japanese carrier All Nippon Airways on a rainy and blustery day at Boeing’s facilities in Everett, Wash.

A crowd of about 500 people, made up of employees, local politicians and aviation industry insiders gathered for a ceremony on a wet tarmac to see Boeing hand over the keys to All Nippon.

The entire event was webcast on Boeing’s website starting at 9 a.m. PDT.

The 787 Dreamliner is an all-new commercial jetliner that Boeing says is the most advanced, fuel-stingy passenger jet ever made. It features a suite of new technologies, such as the industry's largest windows, and an extensive use of strong, lightweight carbon composites.

"This will be an airplane that will define flight for years to come," Jim Albaugh, chief executive of Boeing commercial airplanes, told the crowd.

The aircraft was once expected by May 2008, and has seen its delivery date pushed back several times due to design problems and supplier issues. The effect of the delays has been far-reaching, hurting 787 suppliers stretching from Southern California to Russia, Japan and Italy. There are about 50 suppliers in California alone.

"Every obstacle became a challenge," Albaugh said.

The 787, which will seat 210 to 290 passengers, is the first new class of aircraft launched by Boeing since the 777 in 1995. There are 821 orders for the plane from airlines and aircraft leasing firms around the world.

Shinichiro Ito, All Nippon’s chief executive, said at the ceremony: "I cannot wait to see the day when the skies of the world are filled with 787s."

 

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Take a look inside All Nippon Airways' 787 Dreamliner ... Is that a bidet?

-- W.J. Hennigan

twitter.com/wjhenn

Photo: In this July 13 file photo, the Boeing 787 Dreamliner taxis on the runway at the Indira Gandhi International Airport in New Delhi. Credit: Associated Press

California treasurer: Put renewable-energy tax exemption on hold

The head of a California panel that hands out sales tax exemptions to renewable-energy manufacturing companies wants to suspend the program in the wake of the Solyndra scandal.

State Treasurer Bill Lockyer said he will ask fellow members of the California Alternative Energy and Advanced Transportation Financing Authority at a meeting Tuesday to not approve any new applications for exemptions from paying California sales tax. The exemptions are aimed at encouraging the purchase of equipment used to make solar panels and other energy-saving projects.

The program was authorized last year by the Legislature when it passed SB 71 by Sen. Alex Padilla (D-Pacoima).

A decision on the request is not likely to be made before late October, a spokesman for Lockyer said.

"SB 71 created a tax exemption for businesses that requires a level of transparency and public accountability rarely, if ever, seen in California or anywhere else," said Lockyer in a statement released by his office. "But every government program can be improved."

He added that "in light of recent events"-- the potential loss of a $535-million federal loan guarantee to Solyndra, a bankrupt Fremont solar panel manufacturer -- "we owe it to the taxpayers to see if there is more we can do to make sure we don't give their money to companies headed for a fall or companies that take California's money and run to other states to create jobs."

Lockyer's authority had approved $37 million worth of sales tax exemptions for Solyndra, but the company only used $25.1 million to buy equipment before it closed.

The authority approved 32 sales tax exemption applications, valued at $104 million, of which $31.4 million was used, the treasurer's office said.

RELATED:

Solyndra's collapse is a tale of too much dazzle

Solyndra executives invoke rights, refuse to answer lawmakers

Obama fundraiser linked to program that aided Solyndra

-- Marc Lifsher in Sacramento

Photo: President Obama talks with Solyndra Chief Executive Chris Grommet during a visit to the company's factory in Fremont on May 26, 2010. Credit: Alex Brandon / Associated Press

Consumer Confidential: Self-checkouts, online videos, free checking

Here's your mystic-pizza Monday roundup of consumer news from around the Web:

--Do you find self-checkouts at the supermarket to be more hassle than they're worth? So do some supermarkets. Big Y Foods, which has 61 locations in Connecticut and Massachusetts, recently became one of the latest to announce it was phasing out the self-serve lanes. Some other regional chains and major players, including some Albertsons locations, have also reduced their unstaffed lanes and added more clerks to traditional lanes. Studies cited by the Food Marketing Institute found only 16% of supermarket transactions in 2010 were done at self-checkout lanes in stores that provided the option. That's down from a high of 22% three years ago. Clearly most shoppers still favor the human touch.

--There's more scrambling afoot in the online-video world. Netflix has inked a pact with DreamWorks Animation SKG giving it exclusive pay-TV distribution rights for first-run films starting with the studio's 2013 lineup, while Amazon.com landed a deal with 20th Century Fox to provide movies and TV shows to bring its Amazon Prime streaming service to more than 11,000 titles. Financial terms of the agreements were not disclosed. Netflix is struggling to retain subscribers after raising prices and splitting the company into two separate services. Last week, satellite-TV provider Dish Network resurrected its Blockbuster brand as a streaming service.

--Free checking has become an endangered species. But it's still out there. A new study by Bankrate.com finds that only 45% of checking accounts are free this year. That's down sharply from 65% last year and 76% two years ago. But the study also found that most banks are willing to waive monthly fees when customers meet certain conditions. For example, customers may have to set up direct deposit or maintain a certain balance. The study also found that the average cost for using an out-of-network ATM rose slightly to $3.81. That's including the fees charged by the customer's own bank and the ATM operator.

-- David Lazarus

Photo: Supermarket shoppers go through the traditional checkout. Credit: Damon Winter / Los Angeles Times

 

Seeking international coordination of debt crisis policies is a mistake

A carnival float in Patras depicts Greek anger at eurozone austerity demand (Photo: Reuters)

Over the past couple of weeks we have had David Cameron, Tim Geithner and a round-robin letter of international leaders all demanding international coordination of policy responses to the Eurozone crisis and the threats of double dip recession in the US and slowdown in China. Columnist after columnist and economist after economist have called for an internationally coordinated effort – sometimes even a "shock and awe" approach. But we neither need nor want international coordination at this point, for several reasons.

First, there's only any point in coordinating policy when we have a pretty good idea what the best thing to do is.  If we really don't have a clue – if we admit we are in "uncharted waters" and four years of endless policy initiatives has been making things worse rather than better, demonstrating (in case there was any doubt) that we really don't know what the best thing to do is – then coordination is a device for everyone getting things wrong in the same way. Given that the plans for international coordination appear to be for even more bank bailouts of the rich by the poor, even more aggressive "no-creditor-shall-lose" doctrines – Tim Geithner suggesting that the whole concept of a "cascading default" must be "taken off the table" – and even more fiscal stimulus – a three-part package that has failed about as epically as it is possible to imagine, inducing multiple sovereign defaults - we can be pretty confident that "international coordination" means "finding the very worst things one can do and then doing them everywhere".

Second, international coordination has itself been a source of systemic risk, an important driver of the crisis.  When we replace caveat emptor and the reliance upon diversified individual risk analysis with an overall regulatory badge saying that financial institutions are sound, then when the regulator gets it wrong, it gets it wrong for everyone at once – error is systemically coordinated. And when we internationally coordinate regulations, we end up not only with error coordinated across the market within one country, but also coordinated internationally. It was not a coincidence that the most internationally coordinated banking crisis in history occurred at the historical peak of international banking regulation, with the introduction of the Basel II rules. If we force all solutions to be coordinated now, we will increase coordination of tomorrow's crisis. The belief in international coordination is fundamentally the belief of the collectivist writ internationally. Those that believe in competition and the value of each of us trying out what seems best to us at the individual or firm level will be naturally sceptical of the merit of One World Government – which is what the logic of international coordination implies is the policy-making utopia.

Third, different countries have different needs and different interests. It simply isn't true that all our interests are aligned.  Some countries will benefit more than others if there are defaults, for example, wiping out companies (even entire industries) that compete with their domestic firms.

Better, when you don't know what to do, would be for each of us to try our own thing. Then we can look around at what others have tried and what seems to be working better or worse, and gradually iterate towards some kind of solution. It's obviously politically attractive to all herd together – that way who can blame you if you get it wrong? Herding is what everyone tends to do in conditions of great uncertainty – we see it in wild stock market fluctuations, in the lending policies of banks, in business decisions in the wider economy. But we should not let our politicians get away with that.  Herding is nothing more than political cover. It isn't a constructive policy.

The Best Countries for Non-Mothers

Nancy Folbre is an economics professor at the University of Massachusetts Amherst.

It’s so great to live in a country where women are allowed to drive! It would be so much fun to visit Iceland, where the prime minister is a woman who is cleaning up the financial mess!

Today’s Economist

Perspectives from expert contributors.

The recently released Newsweek/Daily Beast list of the top-ranked countries for women shows the United States in the respectable, though certainly not superlative, eighth position.

Perspectives from expert contributors.

Good to celebrate. But before getting too chipper, consider the methodology used to rank 165 countries on “expansive rights and quality of life.” It assesses women’s economic success in terms of their ability to emulate men’s traditional gender roles, with no consideration of support for raising children or caring for other dependent family members.

The economics domain, one of five quantitative clusters used to construct the index, includes four components:

¶ Whether women can work in all industries
¶ Percentage of women in the labor force
¶ Women’s wages as a percentage of men’s
¶ Ability of women to rise to positions of enterprise leadership

These measures are especially important for assessing women’s earnings, but they say little about family income or vulnerability to poverty.

Single women without children rely largely on their own earnings. But the economic well-being of mothers is heavily influenced by assistance (both financial and direct) from fathers and by publicly provided family allowances or tax subsidies for child rearing. Further, mothers’ ability to find and keep decent jobs is shaped by public policies such as paid family leaves from work.

As I pointed out in a previous post about best-country-for-women rankings, it’s easier to measure rights and achievements than obligations and commitments. Still, there’s plenty of international data available on percentages of families maintained by mothers alone, mothers living in poverty and differences in support for employed parents.

Jody Heymann, founding director of the Institute for Health and Social Policy at McGill University, offers an excellent overview of policy issues in her book “Forgotten Families.”

Public support for family care, particularly generous in Nordic countries, tends to improve women’s ability to combine paid and unpaid work, explaining why Iceland, Sweden, Norway, Denmark and Finland are each ranked higher than the United States on the Newsweek/Daily Beast list.

But the rankings would change considerably if policies relevant to mothers were factored in. For instance, consideration of early childhood education and paid leaves from work would move France up from its 12th position on the list and move the United States way down.

The underlying problem is that most journalists, like most economists, define work as a paid activity and consider family care a form of leisure – a lifestyle choice.

But consider what happens when caregivers reduce their supply of unpaid labor and we must purchase substitutes for the services they provide. Our cost of living goes up.

Our future economic prospects also go down. Family care has huge consequences for the composition and capabilities of our national labor force, as well as the quality of our daily lives.

Family care requires money as well as time, and high unemployment rates in this country have hit young mothers particularly hard. More than 40 percent of households headed by women now live in poverty. Among children, poverty rates have reached 22 percent.

Reduced public commitments to safety net programs such as Temporary Assistance to Needy Families have increased economic vulnerability. The share of single mothers who have become “disconnected,” reporting no income and no welfare assistance, increased to one in five in 2009 from one in eight in 1996.

A recent Urban Institute report estimates that more than 10 percent of mothers living in poverty are experiencing severe depression, posing risks to the healthy development of their infants or toddlers.

Just how much would it cheer these mothers up to learn that a woman holds a position of enterprise leadership at Newsweek/The Daily Beast?

Next time you see a ranking of countries best for women, ask which women, exactly, are being ranked.