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Wednesday, 16-Dec-2009 08:26 Email | Share | | Bookmark
Pittsburgh Sets Vote on Adding Tax on Tuition

The mayor of Pittsburgh calls it the “Fair Share Tax.” But to officials at the city’s 10 colleges and universities and many of their 100,000 students, it is anything but.

On Wednesday, the City Council is expected to give preliminary approval to Mayor Luke Ravenstahl’s proposal for a 1 percent tuition tax on students attending college in Pittsburgh, which he says will raise $16.2 million in annual revenue that is needed to pay pensions for retired city employees. Final Council action will be on Monday.

The tax would be the first of its kind in the nation, and other cities are watching closely as they try to find ways to close their own budget gaps.

Students and college officials argue that the tax will drive students away and place an unfair burden on institutions that already contribute substantially to the city. They add that the measure comes at an especially difficult time for colleges, as endowment values have fallen and requests for financial aid have risen.

The tax, which will most likely end up in the courts, represents a turning point for Pittsburgh, which has remade itself after the steel mills shut down, becoming a hub for nonprofit hospitals and universities. Yet it has been unable to button pearl draw significant revenue from its new identity.

“It’s really a disappointment that we’re in this situation,” Mayor Ravenstahl said. “Our colleges and universities are giving less and less while they increase tuition and executive pay and expand their campuses, removing high-value land from the tax rolls. The cost to provide public safety and public works services continues to increase, but our revenue continues to decrease.”

The tax, which would take effect as early as July, would range from about $20 a year for students at cheaper schools pearl beads like the Community College of Allegheny County to just over $400 for students at the city’s priciest university, Carnegie Mellon.

As a town-gown clash, the issue pits local taxpayers against mostly out-of-state students. But it is also a struggle between the old Pittsburgh and the new, as the mayor tries to force the city’s youngest residents to support some of its oldest.

Other cities have considered going this route. This spring, for example, Mayor David N. Cicilline of Providence, R.I., proposed a $150-per-semester tax on students at the city’s four private colleges. The State Legislature, however, did not take it up.

And in Boston, Mayor Thomas M. Menino created a task force in January to explore increasing voluntary payments from the Keishi pearl city’s universities and hospitals.

“City officials see this as an untapped revenue source, and if Pittsburgh succeeds, I think you will see a lot of other cities immediately move to do the same,” said Terry Hartle of the American Council on Education, a lobbying group for universities. He added that if the Pittsburgh City Council approves the mayor’s proposal, the matter will surely go to the courts.

Students and university officials are not pleased.

The added cost “could prevent prospective students from coming to Carnegie Mellon, and Pittsburgh would be missing out on some of the best talent from around the world,” said an editorial published this month in The Tartan, the student newspaper at Carnegie Mellon.

Officials at the University of Pittsburgh said they would “vigorously oppose any attempt to impose a service or privilege fee on our undergraduate and graduate students.”

But Mr. Ravenstahl said he was left with no other option.

He said that he asked the universities and other tax-exempt nonprofits to pay $5 million annually to the city, and that in lieu of the tax he would find the other $10 million by dipping into reserves, cutting services and getting Harrisburg to increase the commuter tax rate.

Mr. Ravenstahl said the city currently forgoes about $50 million in real estate taxes from nonprofit institutions.

The universities rejected his request last week.

In a four-page letter, the Pittsburgh Council on Higher Education said it refused to consider payments as long as the mayor continued the threat of a tax that it called divisive, illegal and unenforceable.

The council added that the city’s colleges and universities pay $23 million annually in taxes to the city for payroll, parking, business privileges and any real estate not directly related to their educational missions.

Politically, Mr. Ravenstahl risks few votes in leaning on universities for revenue because college students rarely vote in local elections. And many of the constituencies that supported Mr. Ravenstahl’s re-election in November have been vocally supportive of his tax plan.

“This is a turning point for us,” said Joe King, president of the Pittsburgh firefighters’ union. He said that after Miami-Dade County in Florida, Allegheny County has the second largest number of seniors of any county in the United States and that in his union alone he has 900 retirees and 450 surviving spouses whose pensions need to be financed.

“Without the tax, the fate of those pensions could be in trouble,” he said. “We are not asking young people to carry more than their due. We’re just asking them to pay for what they use.”

But students say they already do.

“We have jobs in Pittsburgh so we pay taxes on that income, we rent apartments so we pay taxes on that, we have cars here, which provide parking taxes,” said David Gau, an undergraduate at the University of Pittsburgh, adding that he resented the portrayal of students as freeloaders. “We go to a variety of events like symphony, sports games, plays, concerts, and there are amusement taxes on those that produce even more revenue from us.”

“Why try to divert new people from coming here with a college tax?” added Mr. Gau, 21, who is from Kennett Square, Pa. “It’s the furthest thing from fair.”

Chad Ellis, 28, a graduate student in chemistry at Carnegie Mellon University and a Pittsburgh homeowner, agreed.

“Holding students hostage in negotiations with nonprofits to come up with money to pay for bloated city pension plans is divisive,” he said.

Wednesday, 16-Dec-2009 08:23 Email | Share | | Bookmark
As Goldman Thrives, Some Say an Ethos Has Faded

Just over a week ago, on the evening of Dec. 7, Lloyd C. Blankfein hosted a reunion of one of the most elite clubs in American finance: former partners of Goldman Sachs, the Wall Street giant he has led, with remarkable and controversial success, since 2006.

The gathering, held at the venerable New York Athletic Club, both celebrated Goldman’s past and looked toward its future. What, Mr. Blankfein was asked, did he want his legacy to be?

Mr. Blankfein replied that like his predecessors, he hoped to position Goldman Sachs to capitalize on whatever opportunities might arise during his tenure. As bland as that might sound, few on or off Wall Street have seized opportunities in these troubled economic times as skillfully as Mr. Blankfein.

But as President Obama prods the financial industry to do more to help ordinary Americans — he chided “fat cat bankers” on Sunday for increasing their pay — some current and former Goldman executives say Mr. Blankfein has built a money machine that, while it still values its wholesale pearl jewelry customers, culture and reputation, puts profits above all.

Interviews with nearly 20 current and former Goldman partners paint a portrait of a bank driven by hard-charging traders like Mr. Blankfein, who wager vast sums in world markets in hopes of quick profits. Discreet bankers who give advice to corporate clients and help them raise capital — once a major source of earnings for Goldman — have been eclipsed, these people said.

Mr. Blankfein has surrounded himself with a tight circle of executives drawn from Goldman’s trading operation. Many of these executives, like Mr. Blankfein, cut their teeth in the commodities division, J. Aron & Company. Gary D. Cohn, Goldman’s president, as well as the heads of the bank’s asset management division, are J. Aron alumni. So is the head of human resources.

With the traders ascendant, Goldman’s bankers are being urged to generate bigger profits. In what former partners called a significant shift, Goldman now uses “profiles” to track how much money its tin cup pearl necklace bankers are bringing in.

Granted, money is what makes Wall Street run, and Goldman Sachs is no exception.

“I don’t buy the argument that the old Goldman was more principled and less greedy,” said Arthur Levitt, a Goldman adviser and former chairman of the Securities and Exchange Commission.

But even Goldman concedes it is changing with the times. “This business is all about serving clients, and if you don’t evolve, you die,” said Lucas van Praag, a Goldman spokesman.

After first guiding Goldman through the near collapse of the nation’s financial system and then deftly extricating his bank from a federal bailout, Mr. Blankfein is now presiding over one of the richest periods in the bank’s 140-year history. Mr. Blankfein has accelerated a decade-long decline of Goldman’s old partnership ethos, which was built around the principle that its bankers and traders can do well — indeed, very well — while putting their customers first, former partners said.

Some Goldman alumni worry that Mr. Blankfein is jeopardizing the culture of success that defined the bank for much of its modern history. They wonder if Goldman will become, as one former partner put it, “just like every other bank on Wall Street” — that is, focused on short-term profits rather than long-term gains.

Publicly, Mr. Blankfein espouses the Goldman Sachs way. But privately, current and former partners say that he has fundamentally changed the way Goldman views its customers and the broader marketplace. The changes began when Goldman went public in the late 1990s, but have accelerated under Mr. Blankfein, they say.

None of these people were willing to speak out publicly about Goldman, which, for most of them, has been the source of sizable fortunes.

Bowing to pressure from shareholders and the public to rein in runaway pay on Wall Street, Goldman announced last week that its top executives, including Mr. Blankfein, would forgo cash bonuses this year. Instead, the multi-strands pearl necklace executives will be paid in the form of special stock — an arrangement that, while eliminating big paydays this year, nonetheless may turn out to be enormously lucrative if Goldman’s share prices rises in the future.

Even so, many Goldman employees are stunned by the public resentment directed at the bank in general and Mr. Blankfein in particular, who, after first steadfastly defending Goldman’s profits and pay, recently offered a vague apology for “mistakes” that led to the financial crisis.

“Would John Weinberg ever be in this situation?” asked one former partner, referring to the legendary senior partner who ran Goldman for many years. “No way. He would have thought about the firm over 50, 100 years, not what people will get paid this year.

Wednesday, 16-Dec-2009 08:20 Email | Share | | Bookmark
A Market for Beef Ambles Across a Border

MONTEVIDEO, Uruguay — For decades, the cattle-raising family of Gabriel Pintos looked across the Río de la Plata with respect and envy at Argentina’s legendary tradition for producing beef.

But scanning the vast expanse of his 193-acre ranch here recently, where ducks quacked in a nearby pond while 120 cows nibbled on green grass, Mr. Pintos exuded a new competitive vigor.

“Uruguay today has the maturity to compete with any part of the world with its beef,” said the tanned and fast-talking Mr. Pintos, 51. “This is a historic opportunity for us.”

For more than a century, Argentina has distinguished its beef as healthier and more natural than meat from most of the world coral necklace . Cows ambled leisurely across the rich soil of the Humid Pampa munching on green grass, not the grains offered in crowded feedlots in the faster-paced American industry.

But that image could become a memory from a bygone era. Political decisions by Argentina are changing the taste of the famed Argentine steak and threatening to tarnish the country’s world-renowned beef industry.

The changes have driven away investors, reduced the size of Argentina’s herd and given the nation’s smaller neighbor, Uruguay, the chance to capitalize on Argentina’s troubles by billing itself as the “last big farm” for healthier, grass-fed cattle.

Argentina, in some ways, is a victim of its own success. Exports rose after a steep devaluation of the Argentine peso in 2002 made the country’s beef more competitive globally. But supplies began to dry up for Argentine consumers — who eat more beef per person than any others in the world, industry officials say — causing prices to rise and stoking social discontent.

So Néstor Kirchner, Argentina’s president at the time, responded with a 180-day ban on exports to tamp down prices in 2006. Later, he put in price controls on certain popular cuts, like roast beef, which in rope pearl necklace turn led Argentines to eat still more beef.

But faced with a prolonged drought this year and concerns over their profits, many ranchers are converting their pastures into land for soybean cultivation. Now government incentives to fatten cattle faster are deepening a shift toward raising more Argentine beef with grains like corn and oats in often-crowded feedlots, opening the door for Uruguay to claim the grass-fed advantage.

The Spanish introduced cattle to Uruguay more than 400 years ago, and beef has long been its most important export industry. Cows outnumber people more than three to one in this country of 3.4 million, where about 80 percent of the land is used for cattle grazing.

The nation is sandwiched between Brazil, the world’s largest beef exporter, and Argentina, which has a cattle herd some five times larger than Uruguay’s. Cattle in Argentina and Uruguay were always relatively similar — both were grass-fed and free-range, and they share similar British genetics. As in Argentina, mustachioed gauchos roam the plains with black berets pulled tight over windswept faces.

Despite its neighbor’s problems, Uruguay has struggled to compete with Argentina’s global reputation.

Alejandro Berrutti, a beef trader in Montevideo, recalled his frustrating efforts to introduce Uruguayan meat into the market in Denmark this year. At a Copenhagen supermarket, Argentine beef was classified as the best in the world, but workers had never heard of the Uruguayan equivalent, he said. At a restaurant, the main entrees were Danish salmon and “Argentine steak.” Mr. Berrutti asked a waiter if there were any other dishes.

“Sir, this is the menu that we have had for 25 years, and it works,” Mr. Berrutti recalled the waiter replying.

At Uruguay’s National Meat Institute, which promotes the beef industry, Silvana Bonsignore, the director of marketing, cited a 2004 study of four cities — Atlanta, Boston, Denver and Washington — showing that many Americans knew very little about Uruguay the country, let alone its reputation for beef.

“It is very difficult to sell Uruguayan beef when nobody is familiar with Uruguay,” she said.

With that in mind, Ms. Bonsignore and her staff came up with a new marketing campaign in 2005 seeking to sell Uruguay — its wines, its beaches in trendy Punta del Este — while promoting its beef. Glossy brochures juxtapose images of grazing cattle and plates of beef dishes, with scenes of Uruguayan vineyards and seaside boardwalks.

Ms. Bonsignore has held beef-sampling events in Spain pearlturquoise necklace and Portugal, showcasing Uruguayan chefs. In April of 2008, the meat institute organized the “world’s largest barbecue,” nearly 5,000 feet of grills and 26,000 pounds of beef, earning Uruguay a Guinness World Record.

Uruguay is trying to show the world it is dedicated to “natural” beef — grass-fed and hormone-free by law. One marketing campaign features a symbol of a supermarket bar code emerging from blades of grass. Another notes that each Uruguayan cow, on average, grazes on pasture the size of two soccer fields.

At the same time, big beef investors have begun betting on Uruguay’s more market-friendly policies. Terry Johnson, owner of BPU Meat, is investing $150 million in Uruguay, including in a plant scheduled to open in January that will be able to process 1,500 cattle in one eight-hour shift. Mr. Johnson, a Briton, sold plants in Argentina and Brazil in 2006 to focus on Uruguay.

“For whatever reason, the Argentine government has tried to bring the agribusiness to its knees,” Mr. Johnson said. “The herd is shrinking, land prices have become cheaper. Anybody with anything to do with cattle wants to come out. Uruguay offers a chance to do things right.”

On his ranch, where he also raises horses and lamb, Mr. Pintos, a veterinarian by training, said he is looking for ways to increase production while maintaining Uruguay’s grass-fed edge.

He comes from a family of farmers, and his wife from a line of cattle ranchers. Now they are teaching the business to their children, and they sent their oldest son to New Zealand for six months to learn about the industry there.

“The Dutch are investing a lot here, the Argentines, the French, the Brazilians,” he said excitedly. “I am a humble worker that wants to keep getting better day by day, not just for me or for my family, but for my country.”

Charles Newbery contributed reporting from Buenos Aires.

Wednesday, 16-Dec-2009 08:15 Email | Share | | Bookmark
Climate Talks Near Deal to Save Forests

COPENHAGEN — Negotiators have all but completed a sweeping deal that would compensate countries for preserving forests, and in some cases, other natural landscapes like peat soils, swamps and fields that play a crucial role in curbing climate change.

Environmental groups have long advocated such a compensation program because forests are efficient absorbers of carbon dioxide, the primary heat-trapping gas linked to global warming. Rain forest destruction, which releases the carbon dioxide stored in trees, is estimated to account for 20 percent of greenhouse gas emissions globally.

The agreement for the program, if signed as expected, may turn out to be the most significant achievement to come out of the Copenhagen climate talks, providing a system through which countries can be paid for conserving disappearing natural assets based on their contribution to reducing emissions.

A final draft of the agreement for the compensation program, called Reducing Emissions From Deforestation and Forest Degradation, or REDD, is to be given on Wednesday to ministers of the nearly 200 countries represented here to hammer out a framework for a global climate treaty. Negotiators and other participants said that though some details remained to be worked out, all major points of disagreement — how to address the rights of indigenous people living on forest land and what is defined as forest, for example — had been resolved through compromise.

A final agreement on the program may not be announced until the end of the week, when President Obama and other world leaders arrive — in part because there has been so little progress on other issues at the climate summit meeting, sponsored by the United Nations.

“It is likely to be the most concrete thing that comes out of Copenhagen — and it is a very big thing,” said Fred Krupp, head of the Environmental Defense Fund.

For poorer countries, the payments will provide a much-needed new income stream. For richer nations, the lure of the program is freshwater pearl bracelet not cash but carbon credits that can be used to cancel out, in part, their industrial emissions under a carbon trading system, like the cap-and-trade plan currently under consideration by Congress.

Forests “have become a pot of money or a get out of jail free card,” said Peg Putt, a consultant to the Wilderness Society. “Either way, there’s the prospect of financial benefit now, as opposed to just being told, ‘Do the right thing,’ like it was two years ago.”

The new plan represents an important shift from earlier United Nations climate programs, like the 1997 Kyoto Protocol, in which countries committed to curbing their industrial emissions but got no credit for reducing emissions through changes in land use.

The agreement is also being closely watched in Congress, where climate legislation passed the House in June and is pearl beads l currently stalled in the Senate.

Under the cap-and-trade system preferred by Democratic leaders and the Obama administration, companies that cannot meet their greenhouse gas pollution limit could buy extra permits by investing in carbon-reduction programs abroad. Plans to preserve forests under REDD would presumably qualify.

The forest program “offers the opportunities for U.S. companies to reduce emissions at lower cost, which is very important politically,” Mr. Krupp said.

Under the final draft of agreement, other habitats that absorb carbon dioxide — like peat bogs, which store large amounts of carbon dioxide in their soil — could be eligible for payments. This prospect has environmentalists scrambling to calculate the carbon storage capacity of other resources like swamps and fields, not for the sake of preserving beauty or biodiversity, but for their potential financial benefit.

“Why is everyone thinking about forest and peat land while overlooking oceans, the biggest carbon store on the planet?” said Dan Lafolley, marine vice chairman for the World Commission on Protected Areas of the Swiss-based International Union for the Conservation of Nature. “It would be a travesty if Copenhagen addressed forests but not other carbon stocks.”

The potential for payments has even pitted advocates for some types of forest against advocates for other types.

“Were not sure in Copenhagen there will be a definitive mechanism for monetizing forests, but if there is we think all forests should be included,” Steve Kallick, director of the Boreal Conservation Pew Environment Group, who studies northern forest stocks and noted that by some measures, boreal forests freshwater pearl bracelet store twice as much carbon dioxide per unit as tropical forests.

Even if the ministers pass the agreement, as it is predicted they will, it will take some time before the money starts flowing. Many details remain to be worked out, including the exact level of emissions reduction the REDD program should aim for and by what date, and what system should be used to measure the carbon storage of various habitats.

Meanwhile, scientists and conservationists have flocked to Copenhagen to make their case.

“We’ve seen the idea of REDD start in forestry, but expand to other land use sectors,” Ms. Putt said.

Cary Fowler of the Global Crop Diversity Trust said he decided to come to Copenhagen when he saw no mention of crop diversity or agriculture in an earlier climate proposal.

“I thought I’d better come,” he said. “This negotiation will help decide what’s on the table — which issues are legitimate and which not.”

While progress was made on the forest program, little else was achieved at the bargaining tables here on Tuesday. A top United Nations official, asked to characterize the state of the talks, said simply, “Terrible.”

A new draft of a proposed global accord leaves critical questions unanswered: how deeply nations will cut their greenhouse gas emissions, how much money will flow to help poor nations adapt to global warming and how any environmental program will be monitored and verified.

“There’s a great deal yet to do,” said Todd Stern, the chief climate change envoy for the United States.

Mr. Stern also said that President Obama would not consider changing the American commitment to reducing greenhouse gas emissions in the United States by about 17 percent below 2005 levels by 2020.

“It’s tied to legislation,” he said. “We don’t want to promise something we don’t have.”

Leaders have already abandoned hope of completing a binding international treaty here and say they will continue the work next year. Trying to infuse a sense of urgency, former Vice President Al Gore pressed the negotiators in an afternoon speech to speed up next year’s sessions with an eye toward completing a treaty in July. He also asked Mr. Obama and Senate leaders to set an April deadline for completing a Senate climate and energy bill.

Mr. Obama has been talking with a number of foreign officials in advance of his arrival here on Friday, the last scheduled day of the conference. He has spoken with the leaders of Britain, France, Germany, Ethiopia and Bangladesh since Monday, hoping to find a way to bridge the differences between the developed and developing countries that have divided this effort for years.

Secretary of State Hillary Rodham Clinton will arrive in Copenhagen on Thursday to help provide a final push toward agreement, a State Department official confirmed. She will stay until Mr. Obama departs, the official said.

Ban Ki-moon, secretary general of the United Nations, addressed the delegates Tuesday night as they moved into the final days of negotiations.

“We do not have another year to deliberate,” he said. “Nature does not negotiate.”

John M. Broder contributed reporting.

Wednesday, 16-Dec-2009 08:13 Email | Share | | Bookmark
Nuclear Power Expansion in China Stirs Concerns

HENZHEN, China — China is preparing to build three times as many nuclear power plants in the coming decade as the rest of the world combined, a breakneck pace with the potential to help slow global warming.

China’s civilian nuclear power industry — with 11 reactors operating and construction starting on as many as an additional 10 each year — is not known to have had a serious accident in 15 years of large-scale electricity production.

And with China already the largest emitter of gases blamed for global warming, the expansion of nuclear power would at least slow the increase in emissions.

Yet inside and outside the country, the speed of the construction program has raised safety concerns. China has asked for international help in training a force of nuclear inspectors.

The last country to carry out such a rapid nuclear expansion was the United States in the 1970s, in a binge of reactor construction that ended with the Three Mile Island accident in Pennsylvania in 1979. And China is akoya pearl placing many of its nuclear plants near large cities, potentially exposing tens of millions of people to radiation in the event of an accident.

In addition, China must maintain nuclear safeguards in a national business culture where quality and safety sometimes take a back seat to cost-cutting, profits and outright corruption — as shown by scandals in the food, pharmaceutical and toy industries and by the shoddy construction of schools that collapsed in the Sichuan Province earthquake last year.

“At the current stage, if we are not fully aware of the sector’s over-rapid expansions, it will threaten construction quality biwa pearl and operation safety of nuclear power plants,” Li Ganjie, the director of China’s National Nuclear Safety Administration, said in a speech this year.

A top-level corruption scandal is already unfolding in the nuclear industry.

In August, the Chinese government dismissed and detained the powerful president of the China National Nuclear Corporation, Kang Rixin, in a $260 million corruption case involving allegations of bid-rigging in pearl jewelry nuclear power plant construction, according to official media reports. No charges have been reported against Mr. Kang, who is being held incommunicado for interrogation.

While none of Mr. Kang’s decisions publicly documented would have created hazardous conditions at nuclear plants, the case is a worrisome sign that nuclear executives in China may not always put safety first in their decision-making.

In contrast with its performance in industries like toys, China has a strong safety record in industries like aviation, which receive top-level government attention.

The challenge for the government and for nuclear companies as they increase construction is to keep an eye on a growing army of contractors and subcontractors who may be tempted to cut corners.

“It’s a concern, and that’s why we’re all working together because we hear about these things going on in other industries,” said William P. Poirier, a vice president for Westinghouse Electric, which is building four nuclear reactors in China.

Philippe Jamet, the director of the division of nuclear installation safety at the International Atomic Energy Agency in Vienna, said that China had welcomed foreign inspectors at its reactors and that “they show pretty good operations safety.”

But he added that the international agency was concerned about whether China would have enough nuclear inspectors with adequate training to handle the rapid expansion.

“They don’t have very much staff, when you compare their staff with how many they will need,” Mr. Jamet said. The agency accepted a Chinese request to send a team of international experts to the country next year to assess staffing and training, he added.

In late October, Prime Minister Wen Jiabao ordered a quintupling of the safety agency’s staff by the end of next year, to 1,000, according to United States regulators. Chinese officials did not respond to requests for confirmation.

China has two rival state-owned nuclear power giants: the China National Nuclear Corporation, mainly in northeastern China, and the China Guangdong Nuclear Power Group, mainly in southeastern China.

Western experts regard the Daya Bay nuclear power plant in Shenzhen, which mainly uses French designs and is run by China Guangdong Nuclear, as evidence that China can run reactors safely. A display case holds trophies the power plant won in global safety competitions.


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