Government regulations are crushing new tech starts

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Could your favorite apps soon be banned in your city?

From the online taxi service Uber — which regulators are trying to keep out of Washington, D.C. — to Zipcar.com, tech startups are facing an unexpected challenge: government regulation.

Uber has expanded from its base in San Francisco to other cities: New York, Chicago, Boston, Seattle, and DC. But sometimes, city governments are less than welcoming.

“They’re operating illegally, and we plan to take steps against them,” D.C. Taxi Commissioner Ron Linton warned at a meeting earlier this month.

“What they’re trying to do is be both a taxi and a limousine,” Linton has said. “Under the way the law is written, it just can’t be done.”

Zipcar: The popular car-sharing service says D.C. tax policies are hitting users hardest.

This month, Linton conducted a sting operation. Using Uber’s app to hail a car, Linton took it for a ride, and arranged for inspectors to greet it at the destination. The inspectors fined the driver $1,650 for various violations and impounded the car.

Uber CEO and founder Travis Kalanick calls it outrageous; D.C. has not told him what law Uber violates, he claims.

“You can go on an endless hunt for the regulation or statue forbidding what we do,” he told FoxNews.com. “We haven’t found it yet.”

Kalanick added that he preferred the technology side of his business.

“I’m a tech dude. I kind of like my life outside of politics,” he said. “It’s been a wild ride in D.C. I’m learning how the political game works, but there’s a learning curve.”

Unlike Kalanick, the established industry players have their own lobbyists and decades of experience with politics.

“You have an established taxi industry, and there’s this new technology that’s competing with them. So they’re going to get folks to regulate,” Kalanick said.

While lawyers work things out, Kalanick has kept Uber’s drivers on the streets by offering to pay any fines the city charges them because they work with Uber.

Every year, thousands of tourists, rather than book a hotel at their destination, find accommodations from locals who have an extra room in their apartment — or who have an empty place because they themselves are going on vacation — at sites like Roomorama.com.

Roomorama ensures security by verifying the identities of the people using the site and allowing renters to rate places they’ve stayed at.

But there’s one catch: Last May, New York State made it illegal for anyone to rent out an apartment for a time period of less than a month. Doing so could land you a fine of $800.

Supporters of the ban call such rental arrangements “illegal hotels” and say the Internet has compounded the problem.

“The Internet has made it easier than ever to advertise illegal hotels,” New York state senator Liz Krueger said in testimony to the NYC Committee on Housing and Buildings.

Krueger has also introduced a bill that would raise the fine to a maximum of $25,000.

“This proliferation of illegal hotel operations has … disrupted the lives of countless permanent residents … and ruined many tourists’ visits in New York,” Krueger explained.

Roomorama.com CEO and founder Jia En Teo says that the ban goes too far.

“By slapping a law like this on, it is not allowing markets to run themselves efficiently. Having more options available for consumers is always a good thing,” she said.

Hotel industry groups — which publicly support the ban — are the real reason for the law, Teo said.

“It is the hotel lobby that has been pushing for these laws, so as to stifle the competition.”

Zipcar
Thousands of college students and city-dwellers have ditched owning a car in the last few years for Zipcar — a “carsharing” service that has cars on streets in 13 U.S. cities and 148 college campuses.

Everything is done through a smartphone app that shows the locations of available cars. After booking one using the app, you can just get in and drive. An hour-long trip to the store can cost $8 for the cheapest Zipcars.

Rob Weisberg, Zipcar’s chief marketing officer, says prices could be lower if not for government policies.

In D.C., Zipcar and other carsharing companies pay $200 to $400 per space, per month, while the price for a resident to park their private car on the street is just $1.25 per month.

“Policies like those … penalize car-sharing providers,” Weisberg said, adding that tax policy is also rigged.

“In car-sharing, the reservation period is generally just a few hours yet these members are being taxed at the full day rate. Car-sharing is taxed like a sin tax, with members paying 40 percent in taxes for a one-hour trip to the store.”

Zipcar has hired a lobbyist in D.C., and Weisberg hopes to convince politicians that the extra tax revenue isn’t worth it.

“Cities looking … to reduce greenhouse gas emissions, reduce traffic congestion and increase the availability of parking spaces should be embracing car-sharing,” he said.

He’s absolutely right; it’s not fair anyone is forced to spend their taxes on a system that directly benefits this guy.

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A New Jersey teachers union chief whose salary tops $300,000 is under fire for saying in a recent interview that “life’s not always fair” while arguing against vouchers to send poor students to private schools.

New Jersey Education Association Executive Director Vincent Giordano made the comment on the local “New Jersey Capitol Report” program over the weekend. During the interview, he was challenged by the host on why low-income families should not have the same options as other families when their child is in a failing school.

“Those parents should have exactly the same options and they do. We don’t say that you can’t take your kid out of the public school. We would argue not and we would say ‘let’s work more closely and more harmoniously,'” Giordano said.

When told some families cannot afford to finance the shift to private school without government help, Giordano said: “Well, you know, life’s not always fair and I’m sorry about that.”

The interview clip swiftly spread on the web, along with reminders about Giordano’s healthy salary.

The Newark Star-Ledger reported in 2010 that his salary was nearly $422,000, and total compensation roughly $550,000 when deferred compensation and other benefits are counted.

NJEA spokesman Steve Baker, though, said those reports are not accurate. He said the director’s salary is “in the three-hundred thousands, and the low three-hundred thousands.”

The NJEA has since put out a lengthy statement clarifying the director’s remarks.

“While Mr. Giordano acknowledges that his choice of words may be open to misinterpretation, his intent was to make the point that providing vouchers to a select few students is not the way to address the challenges faced by urban school districts,” the statement said.

Giordano went on to say that the union’s “record of support for urban education and disadvantaged children is unimpeachable.”

He said the union does oppose vouchers, but only because “they will take resources from disadvantaged public schools and only exacerbate the challenges faced by students in those communities.”

Giordano said the NJEA supports better funding for urban schools.

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The week isn’t even half-way done and we’ve already heard at least a quarter’s worth of horror stories out of Europe:

* German industrial production unexpectedly unexpectedly fell in December as Europe’s largest economy continues to whither.

* Greek workers are staging a strike in protest of the austerity measures European authorities are requiring prior to formalizing a long-delayed “make or break” debt write down.

* Retail sales in the UK slumped to their second worst January since 1995 when the country started tracking such data.

Six months ago, any two of the above would have sent global equities tumbling. In 2012 U.S. investors pretended to care by starting the day lower prior to sending the tape lazily higher on Monday and Tuesday. Crazy as it seems the question has to be asked: Does Europe as we know it (in a recession and keeping Greece on life support) still matter to U.S. Stocks?

Tim Speiss of EisnerAmper Wealth Planning LLC gives the natural answer: An emphatic YES. For starters he notes “the EU on a combined basis represents 20% of global GDP.” That doesn’t just have implications for the U.S. According the International Monetary Fund, via Speiss, China’s ability to pull off an economic “soft-landing” relies on Europe stabilizing. The magnitude of China’s exposure is such that the IMF offered China unsolicited advice on what the country should do to stimulate its economy in the likely event that the EU drag worsens.

What really scares Speiss as a wealth adviser, is his observation that the EU recovery will be hampered by the same demographic problem that will become acute in the U.S. over the next two decades: An economy dominated by the elderly and retired, draining resources from a decreasing base of workers.

“The spotlight is on Greece,” notes Speiss, adding that the country represents less than one-half of a percent of global GDP. The diminutive Greek economy is the good news. The bad news is that if it takes the EU this long to deal with Greece, the failure of a larger economy in the remaining nations figures to utterly paralyze the entire continent.

It’s an extensive list of horrors, including the fact that he thinks the ECB is exacerbating matters horribly through inaction. Regardless, Speiss still thinks there are companies that will emerge from the wreckage intact and possibly even thriving; just not in the financial sector.

The bottom line as Tim Speiss sees it is Europe not only matters but its still getting worse. The view from where I’m sitting is a European recession is priced into the tape, reducing developments over there to the loudest sound in a noisy room.

Unless it starts screaming lower, the EU playbook for dealing with an eroding Europe is already laid out: Buy U.S. stocks.

(AP) – FRANKFURT, Germany — With Europe sliding toward recession, the region’s two main central banks are preparing to redouble their emergency measures aimed at softening the downturn and blunting the effects of the government debt crisis.

Analysts expect the U.K.’s central bank, the Bank of England, to announce Thursday that it will inject another 50 billion pounds ($79 billion) of new money into an economy that shrank at the end of last year.

Meeting the same day at its headquarters in Frankfurt, Germany, the European Central Bank is expected to trumpet the advantages of its second unlimited offering of cheap, three-year loans to be allotted to banks on Feb. 29.

Neither central bank is expected to change interest rates from their current record lows — the Bank of England at 0.5 percent and the ECB at 1.0 percent. Rather, attention will focus on their outlooks and their attempts to push more money into the banking systems and the economy.

A first blast of cheap ECB credit — euro489 billion ($641.23 billion)— was taken up by 523 banks on Dec. 23. The step has been credited with calming some of the market panic from the debt crisis hitting the 17 countries that use the euro, and stocks and government bonds have risen since then. Analysts think the takeup could equal or exceed the first one, since the ECB has loosened collateral requirements.

Despite a remarkable easing in tensions on financial markets this year — particularly evident in the big drop in the borrowing rates of weak countries like Italy and Spain — the 17-country eurozone and the U.K. face worrying signs from the wider economy.

Cairo (CNN) — Violent clashes near Egypt’s Interior Ministry on Monday left at least one person dead and 72 injured, a health ministry official said.

The man died of a gunshot wound, said Dr. Hisham Shiha, deputy health minister. Interior Minister Mohamed Ibrahim denied that officers were using anything but tear gas in confrontations with demonstrators.

Among those injured Monday was Salma Said, a prominent pro-democracy blogger who was reportedly shot in the face with bird shot by a police officer. Images of Said, her face and leg appearing to be bloodied, were circulating on the Internet.

Mona Seif, an activist and founder of the No to Military Trials for Civilians group, said officers dressed in civilian clothes infiltrated protest lines and arrested dozens of protesters. There was no immediate word from authorities about arrests on Monday. At least 40 people were arrested on Sunday, officials said.

A parliamentary committee visited the site to gather information and file a report on Monday’s clashes, an Interior Ministry spokesman said.

More than 80 people died in a riot at a soccer stadium in Port Said on Wednesday. As rival fans battled with rocks and chairs, some people suffocated as crowds tried to escape but were blocked by a locked gate.

On Monday, 120 members of Egypt’s parliament called for Ibrahim to be tried on charges that he failed to properly handle the riot, making him responsible for the deaths, speaker Mohamed Saad el-Katatni said in a televised session. He said he had ordered a report on the incident to prepare for questioning of Ibrahim by parliament.

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Warning that it’s a “losing bet” to side with dictator Bashar al-Assad, the White House on Monday urged friends of the Syrian people to help out “before the violence puts a political solution out of reach.”

But refusing to offer a “lead from behind” strategy, the Obama administration insists that after nearly a year of violence and a disappointing weekend that saw a U.N. Security Council resolution fall apart upon Russian and Chinese objections, a military solution is not forthcoming.

On Monday, the U.S. shut down its embassy in Syria, withdrawing Ambassador Robert Ford and 17 American officials. The State Department issued a warning for U.S. citizens to leave the country and announced that Poland will serve as a “protecting power” for the United States, providing consular services to any Americans remaining in the country.

That decision followed a violent crackdown in the city of Homs over the weekend that left hundreds dead. According to the U.N., since the March 2011 anti-government protests began, more than 5,400 Syrians have been killed, mostly by Assad forces.

White House spokesman Jay Carney said the decision to leave the embassy is part of a long-term effort to draw down embassy staff in Damascus, a reflection of the weakened security situation in Syria and the need to ensure the safety of U.S. diplomats.

But while it’s too dangerous for U.S. diplomats to stay in Syria, the violence is not too much for the U.S. government to intervene.

“I think it is very important to try to resolve this without recourse to outside military intervention and I think that’s possible,” President Obama told NBC in an interview that aired Monday, explaining that the administration’s “lead from behind” strategy used to drive out Muammar al-Qaddafi from Libya, would be implemented on “a case-by-case basis based on how unified the international community was, what our capacities were.”

Global Credit Research – 06 Feb 2012 Hong Kong, February 06, 2012 — Moody’s Investors Service says that while it expects a benign credit environment for Asia Pacific banks in 2012, there are still potential hazards that could develop into material adverse shocks for particular systems.

“These are not our central scenario, but what we consider as “tail risks”, or low-probability, but potentially high-impact events that warrant close monitoring over the coming 12 months,” says Stephen Long, a Moody’s Managing Director for the Financial Institutions Group in Asia Pacific.

The report lists and discusses five downside risk scenarios that Moody’s views as increasingly disturbing.

These include: (1) contagion risk from Europe’s sovereign crisis; (2) the possibility of a hard landing for the Chinese economy; (3) the bursting of real estate bubbles in Asia; (4) a downturn in commodity prices; and (5) a downturn in the Australian property market.

Regarding contagion risk, Moody’s believes that the banking systems in Australia, New Zealand, Korea and Vietnam are the most vulnerable to financial and economic shocks from a euro area crisis.

While another downside scenario is the risk of a China hard-landing, a somewhat comforting conclusion from Moody’s stress test is that the profitability, loss reserves, and capital positions of Chinese banks still provide a strong cushion.

The report also says that a substantial downturn in real estate prices in Asia would only have a limited impact on the region’s banking systems in general.

In addition, Moody’s expects the credit impact of a commodity price downturn to vary across the region, with potential distress concentrated in net commodity exporters, but also a risk among midstream processors.

Finally, a downturn in the Australian property market is another single-economy tail risk identified in the analysis. However, Moody’s notes that Australian banks are protected against the direct impact of falling house prices by their low loan-to-value ratios, and the use of mortgage insurance.

The report is titled “Asia Pacific Banks: Five Risk Scenarios for 2012.” It can be accessed on www.moodys.com.

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As sovereign debt defaults go, there may be no better time than now for Greece.

Global investors are clearly in risk-on mode, with the US stock market off to its best start in 15 years and equities in many emerging markets faring even better.

Friday’s job report helped assuage at least one of the primary fears regarding the U.S. economy, even though the housing market remains a shambles-an improving shambles, but still a long ways from healthy.

Last week in general gave life to the recovery theme, with 15 of 23 indicators beating expectations and causing some economists to raise their growth outlook for the full year.

So, with sentiment running so garishly positive, why not go ahead and get that pesky Greek default and all of the accompanying futile denial out of the way already?

“In the last six months, there’s probably been no better time to let Greece strategically default than right now,” said Citigroup credit analyst Jason Shoup.

Shoup was quick to point out that a Greek debt default is not Citi’s “base case,” or most likely outcome, but one that needs to be taken seriously if the markets are ever to absorb the magnitude of Greece’s problems and come out intact on the other side.

One key reason is that the window could be small for the present enthusiasm to last.

Some economists consider the startling jobs growth-a 243,000 surge in payrolls and an unemployment rate drop to 8.3 percent-unsustainable and as much a product of statistical anomalies as a jump in hiring. Specifically, a revision that saw the workforce drop by 1.2 million and a consistent drop in the labor force participation served as troubling signs.

If the recent uptick in economic indicators is indeed transitory, policy makers may want to consider attacking the Greece situation now while the market can still bear it.

“Letting Greece default either after a (Private Sector Involvement) haircut or in lieu of may have been unthinkable just a few months ago, but it wouldn’t surprise us if resistance to such an idea may be weakening in the halls of Brussels and Frankfurt,” Shoup said. “Certainly, buoyant markets seem to be emboldening policymakers to take more of a hard line even while Portuguese bonds oscillate.”

Indeed, there’s the Portugal problem.

It’s hardly a secret that Greece will be only the first of several dominos likely to fall in the Eurozone sovereign structure. Several of its neighbors face burgeoning obligations that they cannot meet, and Greece’s importance as much as anything is that it will serve as a signpost for how future crises will be handled.

An orderly Greek default in which panic is limited and bondholder haircuts are contained means future defaults may not capsize the markets either. But let the crisis spread and the fallout could be catastrophic.

Bob McKeee, chief economist at Independent Stratedy, a London-based research firm, told CNBC that Portugal will be next on the agenda. The nation is far more stable than Greece, which is why the eurozone needs to address its problem children first and then work on more manageable problems.

Concerns over Portuguese debt have come since the nation’s 10-year bond rates hit their highest level since the creation of the European Monetary Union. That came after a debt downgrade from Standard & Poor’s. In a supposedly solid country with a new government, investor confidence remains a problem.

“We believe this is a sign that, despite the tentative progress made by eurozone leaders on a ‘fiscal compact’ and increased liquidity support from the (European Central Bank), the eurozone remains in crisis,” London-based Capital Economics said in a research note.

LISBON, Portugal (AP) – In a six-room Lisbon office where until last year more than a dozen people worked, engineer Joao Paulo Lopes sits alone in silence amid dark computer screens, patiently waiting for a bankruptcy lawyer to shut the company’s doors and send him home.

Small firms with fewer than 50 workers, like the gas and water installation company where Lopes works, make up more than 99 percent of Portuguese businesses. They are the bedrock of the country’s economy. And they’re collapsing at an alarming rate.

“We’re witnessing a daily deluge of small companies going under,” says Raul Gonzalez, president of the national association of bankruptcy owners. His organization logged more than 10,000 company insolvencies last year — a startling 60 percent jump from the previous year.

Portugal’s economy appears locked in a death spiral. The debt-crippled eurozone country is choking amid grinding austerity measures enacted in return for a €78 billion ($102 billion) bailout package last April, a steep recession, an acute shortage of cash, and record unemployment.

That has put Portugal back into the crosshairs of Europe’s two-year-old debt crisis. The country looks as though it will follow Greece in needing another bailout and debt restructuring. And its ordeal could bring another spasm of financial distress for the 17-nation bloc sharing the euro.

The three major international ratings agencies have downgraded Portugal’s credit worthiness to junk status over the past year. Their decisions reflect a lack of market faith in the country’s short-term prospects. In recent days, interest rates on the country’s bonds — a weather vane of investor sentiment — have climbed to highs not seen since the European single currency was introduced.

BRUSSELS (AP) — Greece’s international debt inspectors have discovered that the debt-ridden country still needs an extra euro15 billion ($20 billion) in help — on top of a promised euro130 billion bailout and a euro100 billion debt relief from private investors, a European official said Thursday.

The European Commission, the executive arm of the European Union, has asked the other 16 countries that also use the euro to help foot the bill for the missing euro15 billion, the official said, indicating that a limit has been reached of what can be achieved by Athens implementing further cuts and private investors taking losses on the bonds they hold in the country.

The gap could be filled either though more help from eurozone governments or by eurozone central banks or state-owned banks like France’s Caisse de Depots taking a cut on their Greek bondholdings, the official said. He was speaking on condition of anonymity because of the sensitivity of the matter.

The new push for Greece’s public and government creditors to take a cut on their investments — dubbed the official sector involvement, or OSI — is a new front in the battle to save the country from a potentially devastating default. So far the eurozone and the International Monetary Fund have given billions in bailout loans to the struggling country, but they haven’t been asked to take losses.

The official added that a related deal with private creditors to take losses on their holdings has to be announced before the end of the week, adding that experts from national finance ministries will discuss the tentative deal on Friday.

People familiar with the talks on so-called private sector involvement — or PSI — have said that the deal would see investors take losses of more than 70 percent through a 50 per cent cut in the value of the bonds, a lower interest rate of between 3.5 per cent and 4.5 per cent on the bond and more time to pay back the debt.

WASHINGTON (AP) — Ben Bernanke is urging lawmakers to balance their desire to cut deficits with policies that could help boost the weak economy in the short run.

Bernanke told the House Budget Committee that he recognizes that huge budget deficits represent a serious threat to the economy.

“Even as fiscal policymakers address the urgent issue of fiscal sustainability, they should take care not to unnecessarily impede the current economic recovery,” Bernanke said. “Fortunately, the two goals … are fully compatible.”

The Federal Reserve chairman is testifying a week after the Fed signaled that a full recovery could take at least three more years. As a result, the Fed said it doesn’t plan to raise its benchmark interest rate from a record low before late 2014 at the earliest.

The hearing began on a contentious note. Chairman Paul Ryan, a Republican from Wisconsin, said the Fed’s policies were adding to uncertainty and raising risks of higher inflation down the road.

Ryan was critical of the Fed’s decision last week to announce that it hoped to hold interest rates at record low levels for three more years.

“I think this policy runs the great risk of fueling asset bubbles, destabilizing prices and eventually eroding the value of the dollar,” Ryan told Bernanke. “The prospect of all three is adding to uncertainty and holding our economy back.”

Bernanke is also appearing two days after the Congressional Budget Office estimated that the deficit will top $1 trillion for a fourth straight year and could stay around that level for years.

The two leaders offered contrasting views last summer over how to handle high budget deficits. Bernanke warned Republicans that threatening to block a pending increase in the nation’s borrowing limit could hurt the economy. He said the debt ceiling was the “wrong tool” for trying to push federal spending cuts through Congress.

Ryan countered at the time that using the debt-ceiling vote as leverage to win meaningful deficit reductions was a valid approach.

This time, Bernanke will likely point to some economic improvements. Factories are making more goods. Americans are buying more cars. The unemployment rate is near its lowest level in nearly three years. And employers have produced six straight months of solid hiring.

Still, growth was only modest in the final three months of last year. And consumers will likely slow their spending if hiring and pay increases don’t strengthen.

A key reason the deficit has surged in the past four years is that the government collected less tax revenue. In part, that’s because the economy has yet to regain the millions of jobs lost during the Great Recession.

And the government has had to spend more on emergency unemployment benefits and efforts to boost growth, such as the Social Security tax cut that will expire in February unless Congress extends it.

The Fed has also taken extraordinary measures during and after the recession to try to help the economy recover. In June, it completed its second round of bond buying.

At a news conference after last week’s Fed meeting, Bernanke said a third round of bond buying might be necessary. Some economists think the Fed could announce more bond buying as soon as its next meeting in March.

SAN FRANCISCO (Reuters) – At least a half-dozen major U.S. companies whose computers have been infiltrated by cyber criminals or international spies have not admitted to the incidents despite new guidance from securities regulators urging such disclosures.

Top U.S. cybersecurity officials believe corporate hacking is widespread, and the Securities and Exchange Commission issued a lengthy “guidance” document on October 13 outlining how and when publicly traded companies should report hacking incidents and cybersecurity risk.

But with one full quarter having elapsed since the SEC request, some major companies that are known to have had significant digital security breaches have said nothing about the incidents in their regulatory filings.

Defense contractor Lockheed Martin Corp, for example, said last May that it had fended off a “significant and tenacious” cyber attack on its networks. But Lockheed’s most recent 10-Q quarterly filing, like its filing for the period that included the attack, does not even list hacking as a generic risk, let alone state that it has been targeted.

A Reuters review of more than 2,000 filings since the SEC guidance found some companies, including Internet infrastructure company VeriSign Inc and credit card and debit card transaction processor VeriFone Systems Inc, revealed significant new information about hacking incidents.

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The drafters of the Dodd-Frank financial reform law got an important thing right. Despite fierce pushback from the banks – and lackluster support from the White House at critical moments – the legislators communicated a key new intent: megabanks must be able to fail, and the Federal Deposit Insurance Corporation should be in charge of that liquidation process.

The F.D.I.C. was an inspired choice for this role, because it is less captivated by the “magic” of Wall Street and less captured by its money and influence than any other group of officials.

The F.D.I.C. has also long been in the business of shutting down banks while limiting the damage to taxpayers, although it did not previously have complete jurisdiction over the largest banks when they got into trouble. It could only deal with those parts that had federally insured “retail” deposits, and this turns out not to be where the biggest problems have occurred in recent times.

Charged with this mandate involving the too-big-to-fail banks and with the difficult task of potentially shutting one or more of them without disrupting the economy, the F.D.I.C. took the remarkable step of opening up its decision-making process.

By creating a Systemic Resolution Advisory Committee of informed outsiders and by Webcasting the deliberations of that group, the agency has brought perhaps an unprecedented degree of transparency to public policy for banks – a point made forcefully by Dennis Kelleher; his blog at Better Markets is a must-read for anyone who cares about financial regulatory reforms. (Disclosure: I’m a member of the committee, an unpaid position.)

Committee members hold a wide range of views. Some are quite sympathetic to our existing financial structures, some much more skeptical. You can look over the list and make up your own mind as to who is on which side, and you might want to review the recording of the Jan. 25 meeting.

There is no question that the senior leadership of the F.D.I.C. is paying attention to the committee – and at the meetings, key people are put on the spot to discuss all relevant details with well-informed committee members, who can ask a lot of follow-up questions.

It is inconceivable that any other part of our financial regulatory apparatus will ever open itself up in the same way – for example, the Federal Reserve (in both Washington and New York), the Treasury Department and the Federal Stability Oversight Council are likely to be forever opaque. They, too, should open themselves up in public to tough cross-examination by experts, but that goes directly against their aloof and perhaps arrogant culture.

The history of American public administration is littered with examples of policy gone wrong – and actions misdirected – because informed and well-meaning critics were kept at arm’s length. Information is withheld even from other agencies. Powerful special interests work their influence; the rest of society has no effective voice. Even the most energetic Congressional oversight is unlikely to work when expert critics are kept so far from the real policy action.

Within the financial sphere, if the F.D.I.C. really manages to convince the markets that big banks can and will fail – meaning that creditors face the genuine prospect of losses – that changes everything.

NEW YORK (AP) — Dow Chemical Co. is feeling the impact of the slowing European economy, and seeing some weakness in North America as well.

The nation’s largest chemical maker said Thursday that it posted a loss of 2 cents per share in the fourth quarter as a one-time charge resulted in higher taxes at its Brazilian operations.

Excluding charges, Dow earned 25 cents per share. But that was short of analysts’ expectations and shares fell 3 percent in premarket trading.

Price increases helped revenue rise 2 percent to $14.1 billion. But overall volume was down 3 percent, or flat excluding businesses that Dow has sold off. The company said demand slipped as customers in North America, Europe and other regions worked through existing inventory instead of replenishing their stockpiles.

Dow says it saw global economic “deterioration” in the period, with “considerable weakness” in Western Europe. Europe, which is embroiled in a debt crisis, accounts for a quarter of the company’s sales.

Volumes rose in the Latin American and Asia-Pacific region.

I’m proposing a new rule. Every time you make a fucking prediction to the press, you need to pony up $500 and register your name with the FBI. At least that way, some of these clowns would start to run out of money.

Kabul, Afghanistan (CNN) — Pakistan continues to support the Taliban in Afghanistan, a secret NATO report says, according to a journalist who has read it, despite years of Pakistani denials and American pressure to stop backing the insurgency

The Taliban depend on Pakistan for support, even though they do not necessarily welcome it, Times of London reporter Jerome Starkey said Wednesday, citing the report.

The leaked NATO document revives the longstanding accusation that elements in Pakistan’s Inter Services Intelligence agency are aiding the insurgency in Afghanistan.

It says the ISI knows the whereabouts of all senior Taliban commanders, Starkey said.

“It is a marriage of convenience,” he said. The Taliban see Pakistan as manipulative, but they see no alternative to accepting its support, he said.

The Taliban are absolutely confident of victory, he said the report found, based on 27,000 interviews with more than 4,000 detainees ranging from senior Taliban commanders to Afghan civilians.

They also include mid- and low-level Taliban, al Qaeda, and foreign fighters, he said.

Progress in Afghan peace talks NATO downplayed the importance of the report Wednesday, after it was leaked, while Pakistan rejected key conclusions entirely.

(CNN) — Two passenger rail cars jumped the tracks Wednesday near Ann Arbor, Michigan, but no life-threatening injuries were reported in the accident, officials said.

The Amtrak train “made contact” with a vehicle at a public highway crossing, Amtrak said, causing the engine to turn on its side and the first two cars of the train to derail.

The train involved in the incident was Amtrak Wolverine Service Train 351.

There were 71 passengers and five crew members on board, Amtrak said.

The train, made up of two locomotives and six rail cars, was heading westbound from Pontiac, Michigan, to Chicago.

Amtrak suspended service in central Michigan for several hours and said it will offer refunds or re-bookings without fees for those affected.

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A group of Occupy Wall Street protesters disrupted a Right to Life rally and threw condoms on Catholic school girls inside the Rhode Island state capitol building.

Barth Bracy, executive director of Rhode Island Right to Life, said their rally had to be cut short after the Occupiers began screaming and refused to allow a Catholic priest to deliver a prayer.

“This is their idea of civil speech but we believe it’s an outrage,” Bracy told Fox News & Commentary “They started heckling, chanting and blowing whistles. They shouted down a priest.”

Last week’s rally was held inside the rotunda of the state capitol in Providence. Bracy said the Occupiers, along with some pro-choice demonstrators, infiltrated the crowd of some 150 pro-lifers. He said the pro-life crowd was made up of senior citizens, mothers with young children, Cub Scouts, and school kids.

Bracy said one of the most egregious incidents occurred when an Occupier climbed to the third floor balcony and dumped a box of condoms on girls from a Catholic school.

“What kind of individual throw condoms at Catholic school girls,” Bracy asked.

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President Barack Obama’s re-election campaign identified its top fundraisers on Tuesday, including 61 people who each raised at least half a million dollars. Altogether, the more than 440 fundraisers collected at least $75 million to help Obama win a second term.

Among them are embattled former New Jersey Gov. Jon Corzine. Obama’s campaign and the Democratic National Committee late last year returned $70,000 in contributions from Corzine and his wife following questions about the collapse of MF Global, the financial firm Corzine ran.

Corzine is no longer raising money for the re-election, campaign officials said.

The campaign divided the list into four groups based on how much money donors raised: $50,000-$100,000, $100,000-$200,000, $200,000 to $500,000 and those who raised more than $500,000 apiece.

The donors represent a broad network of contributors, many of them longtime Democratic Party stalwarts.

The list includes two fundraisers linked to Solyndra LLC, the California solar company that received a $528 million federal loan and then later declared bankruptcy, prompting a federal investigation. Steve Spinner, an Energy Department adviser, raised at least $500,000 and Steve Westly, a venture capitalist who was an unpaid adviser to the department, raised between $200,000 and $500,000.

The disclosure came as Obama headed back out on the money trail, speaking Tuesday night at two high-dollar fundraisers in the Washington area where donors paid $35,800 per ticket to see him. At an event at the posh St. Regis Hotel, the president told donors that Republicans have “the wrong vision for America,” though he didn’t mention any of his opponents by name or reference the voting under way in Florida, where polls were closing in the state’s GOP primary.

Obama said voters needed to know “that this is not an abstract ideological argument, that this is a practical concrete argument,” and that the election is about whether they’ll be able to find a good job with a living wage and get health care for their families. “They’ve got to feel that we are actively advocating on their behalf.”

Obama’s campaign ended the year with more than $81 million in the bank, but Republicans are gearing up in the race for the White House.

The Republican National Committee collected $27 million during the final three months of 2011, compared with $23 million by the DNC. In December, the RNC raised $11.6 million while the DNC collected $8.8 million.

Through the end of 2011, the RNC had $20 million in the bank and $13 million in debt, while the DNC held $12.5 million in cash on hand and $6.5 million in debt.

Though Obama rejects contributions from lobbyists, his top fundraisers include individuals involved in the business of influencing government.

Michael Kempner, among those who raised more than $500,000, is president and CEO of MWW Group, a public relations firm with a large lobbying business. Kempner himself is not a registered lobbyist.

Sally Susman, another fundraiser in the $500,000-plus category, is executive vice president for policy, external affairs and communications at Pfizer Inc., a job that includes directing the pharmaceutical giant’s government relations operations.

California figured most prominently on Obama’s roster of big money “bundlers.” Sixteen are from California and 13 are from New York.

Top fundraisers include movie producers Jeffrey Katzenberg and Harvey Weinstein, and Vogue editor-in-chief Anna Wintour. Actress Eva Longoria was in the second highest tier, bundling $200,000 to $500,000 for Obama’s re-election.

WASHINGTON (AP) — A Federal Reserve survey has found that more than half of U.S. banks that lend to European banks have tightened their standards, a reflection of the persistent European debt crisis.

Of the 26 U.S. banks surveyed that make loans to European banks, five said they had tightened their standards considerably in the October-December quarter. Another 10 said that they had tightened them somewhat in the same period, according to the survey released Monday.

Many economists predict that Europe’s debt crisis will push the region into a recession this year. Many European banks are heavily exposed to government debt, making the banks more of a risk.

In the U.S., banks are seeing more small businesses apply for loans, according to the Fed’s quarterly survey of loan officers for large banks.

The percentage of banks reporting increased loan demand from companies with annual sales of less than $50 million rose to the highest level since 2005, the survey found.

That could mean more companies are confident in the economy and may be looking to hire more and expand.