DiscussionDIVAS

Talking points for the Holiday weekend

We’ve captured the highlights of a couple hot topics this week – ammo for any cocktail conversations this weekend.

Cold cash; Congress in a tizzy
An FBI search of Louisiana Congressman William Jefferson’s office sparked broad controversy among lawmakers, who say the search is a violation of separation of powers. The FBI falls under the Judicial Branch. Keep in mind that the Congressman is under investigation for alleged bribery, and that the FBI already found $90,000 in his freezer at home. Now the Executive Branch is weighing in, with President Bush calling for a materials seized last weekend to be sealed for 45 days.
> Big picture: This one’s likely headed to court. Congress is yelling about separation of powers, but isn’t this really about checks and balances?

Immigration battle
The Senate voted Thursday to toughen security along the Mexican border and opened the door for millions of illegal immigrants to become legal citizens. Now the Senate and House of Representatives have to merge their separate versions of immigration laws into one bill that President Bush would then sign or veto. Stay tuned!

Short but sweet. Have a great weekend.

From Russia, with love

If you think paying people to have babies seems foreign, you’re right.

A handful of foreign countries offer cash incentives to citizens in exchange for a higher birth rate. Move to Australia and they’ll pay you a baby bonus of about $3,000. In Singapore, you’re looking at $18,000 for baby #3.

Russian President Vladimir Putin recently upped the incentive, offering about $10,000 to couples having their second baby. Interestingly enough, that’s just slightly less than what each Russian currently contributes on average to the economy.

What’s going on?
In many countries, populations are declining to do various issues: aging people or health problems like HIV/Aids. Russia has lost a lot of people since the fall of the Soviet Union in 1991 and has a high rate of alcoholism.

Despite having twice the amount of land area (6.5 million square miles), its population of 143 million is about half that of the United States. And that number is dropping by about 700,000 people a year. Its gross domestic product is just $1.5 trillion, about 13% of the United States’ $12.4 trillion.

The big picture
Countries worry about declining populations because fewer people equal fewer workers, which directly impacts the economy. Japan’s population is aging so fast there's cause for tremendous concern.

On the flip side, India and China are boasting populations of one billion. So does it really matter that some populations are falling? China’s one-baby policy is in direct contrast to Russia’s, and their economy is booming. Excluding immigration, U.S.population growth is rather steady.

 

Why is the U.S. infant mortality rate so high?

You may find it shocking to learn that the wealthiest nation in the world – the United States – has one of the highest infant mortality rates among industrialized nations, with 4.7 deaths per thousand live births, according to a new report.

Of course that’s a far cry from the rates in developing nations. In Liberia 65 newborns die for every 1,000 live births. But among developed nations, the U.S. rate is three times higher than that of Japan (1.8 per 1,000) and only slightly better than that of Latvia, a small country of 2 million nestled between Russia and the Baltic Sea, where the rate is 6 deaths per 1,000 births.

What’s going on?
Premature births and low birthweight are typical causes of newborn deaths in developed nations like the U.S., according to Save the Children’s “State of the World’s Mothers” report.

That’s quite different from causes in developing nations – tetanus, diarrhea and infection – where 99 percent of deaths occur.

In the U.S., minorities are at most risk, and the study found a correlation between low education and low socioeconomic status.
> A recent New York Times story summarizes the report’s take on what countries with low infant mortality rates are doing well.

The big picture
The report rams home that the first 24 hours of a newborn’s life are crucial – 2 million per year die in this period – and that 70 percent of deaths could be averted with simple items, like knit caps. Check out www.savethechildren.org for ideas on how to help.

Why are gas prices so high?

What’s happening?

Feeling the pain at the gas pump?

Prices soared last week to an average $2.91 a gallon, up 68 cents from a year ago, and even Republicans called for President Bush to investigate potential pricing abuse at oil companies. On Tuesday of last week, he asked for an investigation.

What determines the price of gas?

Ask yourself what determines the price of coffee or lemons. Costs of raw materials, production, labor, marketing and distribution, supply and demand, and taxes, factor into most products we buy. Depending on market conditions, the purchase price for the retailer, and how difficult it was to put a lemon on the shelf will affect the price, and affect it differently in different locations. For instance, it may be less expensive to buy a lemon grown in California at a farmer’s stand than at a grocery store in Missouri. It didn’t cost as much to get it there.

It’s the same for gasoline. In this case we’re talking about oil companies who refine the gas (the farmer of sorts) and the gas station. (This doesn’t explain why gas prices near refineries are still high. If anyone has an explanation, please pass it along.)

The Energy Information Administration breaks down the costs in a gallon of gas like this:

-         Oil prices: 47%

-         Federal, state and local taxes: 23%

-         Refining costs and profits: 18%

-         Distribution, marketing and retailer costs and profits: 12%

> The EIA has a comprehensive but readable explanation of this breakdown

So why are gas prices so high?

Well, there are a lot of factors. Remember when gas prices spiked around Hurricane Katrina? Part of that was due to a fear of shortages.

But again, the key raw material in gasoline is crude oil, and the price of oil has doubled since 2004, trading around $71 a barrel.

What’s the big picture?

Tensions in the Middle East are causing concern over access to oil supplies there, which is contributing to the rise in the cost of crude. With some traders predicting $100 oil, we’re not likely to get a big break in gas prices. And with some 223 million cars on the road and millions of commuters, gas prices are likely to be a political hot button as we head into 2006 congressional elections this fall. They’re also likely to impact our pocketbooks.

> Check out the latest gasoline averages

> Other steps President Bush took last week in regards to gas prices