Texas Tops CNBC's Annual List of Top States for Business

Texas once again finished first in CNBC's annual ranking of top states for business.  Texas finished first two years ago but slipped behind last years winner Virginia.  Here is the link to CNBC's criteria.  See top five below

1. Texas
2. Utah
3. Virginia
4. North Carolina (personal favorite as I used to live there)
5. North Dakota

Gerhard Schröder: The Man Who Rescued the German Economy

The WSJ weekend interview feature former German Chancellor Gerhard Schröder.  Schröder was behind the revival of the German economy from 1998 to 2005.


The point to take away from the article is that Germany had not always been as strong as it is today.  Germany had to go through reforms and cost cutting measures that they are asking of their fellow EU members.  Making these tough choices ultimately cost Schröder his office.


Eventually the US will have to go through this very reform and cost cutting process as well.


Full article here

• Circumstance forced economic reform onto Gerhard Schröder's agenda as chancellor. When he took office in 1998, Germany's unemployment rate was 11% and economic growth was close to nil.
• The result was a radical reshaping of the German welfare state. To reduce labor costs, Agenda 2010 merged social-welfare benefits with benefits for the long-term unemployed, paring down the total amount and availability of assistance. Employers' health-insurance costs were trimmed back. Planned income and corporate tax cuts were accelerated: The top personal income tax rate was lowered to 42% from 48.5% and the bottom rate went down to 15% from 19.9%. The corporate tax rate dropped to 19% from 25%.
• "And now the results speak for themselves," Mr. Schröder says. "For a long time we were the sick man of Europe. Now we are the healthy Frau of Europe." With German unemployment at 6.8%, nearly the lowest level since reunification in 1990, it's hard to disagree. German GDP growth has so far kept the euro zone from falling into another recession this year.
• Mrs. Merkel may have kept the spirit of the Schröder reforms alive in Germany, but in most of Europe there has been little evidence, in seven years, that the reform wisdom Germany displayed has rubbed off. French President François Hollande has spent his first months in office raising the minimum wage, lowering the pension age, and standing by his notorious pledge to tax high earners at 75%. Adopting Mr. Hollande's policies would be "a real catastrophe" for Germany, Mr. Schröder says.
• Aware of the political and historical sensitivities, Mr. Schröder counsels that Germany and the European Union shouldn't be encouraging Agenda 2010-style reforms as a cure for Southern Europe without concurrent measures to promote domestic spending and forestall immediate collapse. He echoes the suggestions of Mr. Hollande and others that the EU should invest in wobbling economies via the EU's regional development funds and project bonds for infrastructure.
• That Germany and France were never punished for their debt transgressions is still seen as evidence that no EU rule is so important that the Continent's largest members cannot get around it. Many blame Berlin and Paris's original sin for, in effect, licensing the Mediterranean governments' borrowing sprees. But Mr. Schröder says that fiscal rules ought to be negotiable "in countries where structural reform is really taking place—where, if you like, an Agenda 2020 is being implemented."
• The cost of insuring against German government default has been ticking up. If Germany has to pitch in substantially more to rescue the Southern states, its own public debt—already more than 80% of GDP—could raise market hackles.
• Germany's political class may find itself disabused of the hope that Europe's national governments can reform their way to solvency. The long record of disappointments that have come out of Athens, Madrid and Rome raises the scary thought that this is not just a crisis of European money or of European institutions, but of European-style social democracy itself.

New Detroit Farm Plan Taking Root

Farming, coming to an urban block near you.  Well at least quite possibly in Detroit.  With Detroit facing an ongoing financial crisis, local businessman John Hantz  has proposed converting vacant private and city-owned property into the world's largest for-profit urban farm on Detroit's East Side.

According to this WSJ article, Hantz had planned on converting as much as 10,000 acres of land but instead has started out with 200 acres.

Full WSJ story here

• Large-scale farming in Detroit still faces a number of legal, political and logistical challenges, including concerns about soil quality, the price of the land and the impact on neighbors. The land sale also needs formal approval from the mayor and the city council. This summer, a city commission plans public hearings on a zoning ordinance that would permit for-profit farming. That process will force Detroiters to confront awkward questions about their city's development prospects. Among them: Is the abundance of vacant land an asset or a liability?
• Detroit has more than 200,000 vacant parcels—almost half of them residential plots—that generate no significant tax revenue and would cost more to maintain than the city can afford. Finding new uses for this land has become one of the most pressing challenges for a city that lost a quarter of its population in the past decade.
• Mr. Hantz proposes to ease that burden by buying about 2,300 parcels and planting oak trees, then maybe fruit orchards and hydroponic vegetables. The hardwoods could be harvested and sold within a decade to customers looking for young trees, according to Hantz Farms.
• Hantz Farms officials acknowledge their self-funded venture would create few new jobs in the short term, and only modest revenue for Detroit. Hantz is offering only $300 a parcel, one-tenth of what city officials wanted. It has agreed to clear the land and demolish as many as 200 structures—at an estimated cost of more than $2 million, offset in part by tax credits and state assistance—before beginning to pay roughly $60,000 a year in taxes on the land.
• Hantz Farms recently bought about three acres on a mostly deserted block and cleared away a mountain of debris, including 430 tires. In their place, Hantz crews planted hundreds of bur oak saplings as a demonstration project. "It's a pleasure to look at," says Ruth Moucha, 80, one of the few residents left on the block. "It feels like it's a circle, coming back to what it once was."

Jimmy V Day on ESPN Radio

Every year ESPN Radio sets aside one special day to raise awareness and money for cancer research for The V Foundation.  The foundation is named for legendary North Carolina State men's basketball coach Jim Valvano.

Here is the link to the ESPN Radio site where you can donate.  I have also enclosed Valvano's emotional ESPY award speech where he received the Arthur Ashe award for courage.

In the words of Jimmy V, "don't give up, don't ever give up."