Former chairman of the Federal Reserve Alan Greenspan told Congress on Thursday that he was shocked that self-regulation in the financial markets had not functioned the way he anticipated.
At one time, Greenspan – who left the Fed in 2006 after running it for nearly 20 years – was praised for enacting policies that helped stoke the property boom seen earlier this decade.
However, more recently some people have been laying part of the blame for the credit crisis on the chairman’s opposition to regulating the financial markets.
"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan told the House Committee of Government Oversight and Reform.
However, he explained that his decisions not to regulate risky practices such as credit default swaps was based on a philosophy that had previously worked "exceptionally well."
Other financial leaders testifying before Congress included Christopher Cox, chairman of the Securities and Exchange Commission.
Director of Homeland Security Michael Chertoff has challenged claims made by civil liberties groups about the number of people not allowed to fly on U.S. airlines.
Instead of the figure of 1 million which has been quoted by the American Civil Liberties Union, the actual number barred from flying totals only 2,500, with 90 percent of these non-U.S. citizens, he said.
In addition, there are around 16,000 people whose names are on a selectee list, which means they may be inspected but not prohibited from boarding a plane.
However, some have raised concerns about the incidents of mistaken identity, in which an innocent member of the public shares a name or other identification with someone on the list.
Some names may even be on the list as the result of an error. Earlier this year, a court of appeals in San Francisco ruled that passengers can bring cases regarding their status on the no-fly list to a judge and jury for consideration.
It made its decision after a Malaysian student at Stanford University was detained and handcuffed at an airport in 2005, the San Francisco Chronicle reports.
Investors who have been hoping that the U.S. economy will be given a clean bill of health in the near future may want to think again.
New predictions from the International Monetary Fund provide a gloomy picture for the next six months, suggesting that most countries in the western hemisphere will face near-zero or negative growth until mid-2009.
And, once the U.S. does begin to get back on its feet, the IMF said that recovery will happen more slowly than in previous downturns because of the "exceptional nature of the asset price adjustments taking place."
Other countries in the region are also set to face challenges, the group predicted.
"The outlook points to a major downturn for the global economy, with growth falling to its slowest pace since the 2001-02 recession," the report states.
However, the IMF suggested that the coordinated efforts taken by governments around the globe would eventually lead to a successful recovery for the global economy.
Meanwhile, in related news, CNN Money reported on Wednesday that although there some signs of a credit thaw have been observed, investors continue to behave warily due to warnings about a long recession.
Parents may be careful to protect their children from a number of threats to their health, including toxic chemicals and potentially harmful medications.
Now, new research raises questions about the effect of general anesthesia on a child’s developing brain.
Findings reported at the American Society of Anesthesiologists annual meeting reveal that children who were exposed to anesthesia could double their risk of being diagnosed with a behavior or developmental disorder.
Scientists analyzed data from 625 children who had been given anesthesia for a hernia operation and compared it with a sample of 5,000 kids who had not had anesthesia. All participants were covered by the New York State Medicaid program.
They found that 4.8 of the children exposed to anesthesia had later been diagnosed with a developmental or behavioral disorder, compared with 1.5 percent of the control group.
Researcher Dr. Lena Sun told Reuters Health that although the results are provocative, more investigation needs to be done.
"This study basically suggests that we really need to do a more rigorous study to look at this question," she said.
Around 2 million children in the U.S. have been diagnosed with the behavioral problem ADHD, according to the National Institute of Medical Health.
The amount of money spent on Medicaid could place significant stress on federal and state budgets over the next decade, according to forecasts from the U.S. Department and Health and Human Services.
In fact, spending is expected to rise by an average of 7.9 percent each year over the next 10 years, a rate of growth which is larger than that of the overall economy, the report indicates.
Medicaid is a joint state and federal program that provides insurance for low-income households. It cost approximately $333.2 billion to fund in 2007, with the federal government paying 57 percent of that cost.
HHS predicts that the total cost could reach $647 billion by 2017, with enrollment in the program expected to hit 55.1 million by that year.
"This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments," commented HHS secretary Mike Leavitt.
He urged action to make sure the program remains "fiscally sound."
Last month, a Kaiser Family Foundation and Health Research & Education Trust report found that U.S. health insurance premiums rose by an average of 5 percent last year.
The U.S. government is mistaken if it thinks that it can help the American people by interfering with the free market, according to Texas Representative Ron Paul.
He told CNN’s American Morning program that the bailout will lead to inflation and will end up doing "no good whatsoever" for the country’s economic situation.
In addition, he criticized the idea that creating new money and encouraging spending provide the keys to boosting the economy.
Paul characterized these measures as typifying the "arrogant" belief of politicians and bureaucrats that they can regulate the free market.
Instead, the congressman from Texas called for a "drastic" tax cut that would allow Americans to "keep the money they earn."
When questioned about the future of the country, Paul replied that he finds weaknesses in the economic policies of both John McCain and Barack Obama.
However, when asked to differentiate, he said that the Republican’s healthcare plan offers "a better approach" but that the Democrat’s ideas about withdrawing from Iraq will save the U.S. billions of dollars.
Paul’s comments come as chairman of the Federal Reserve Ben Bernanke has suggested that another economic stimulus package is needed to help heal the ailing economy.
The U.S. Food and Drug Administration may have decided that the chemical bisphenol A (BPA) is safe, but the Canadian government has made it clear it thinks otherwise.
Canada has become the first country in the world to take action against BPA in baby bottles.
The chemical – which is also used in plastic packaging – has been linked to a number of health problems in various studies, but some experts do not find the evidence to be strong enough to support a ban.
For example, in the U.S., the FDA has said that BPA is safe for human use. Earlier this year, spokesperson Laura Tarantino said the FDA was not "recommending any change in habits" in regard to the chemical.
After declaring BPA a toxic chemical on Saturday, Canada said it is working on draft regulations to limit its importation and sale.
Some U.S. states have said they are considering similar bans, with surgeon generals from Delaware, Connecticut and New Jersey calling on the government to act to protect children’s health.
It was several months ago that President Bush signed a $170 billion stimulus package that he said could help prevent the U.S. from slipping into recession – now, there is talk of introducing another, similar measure.
Speaking before Congress, Ben Bernanke, chairman of the Federal Reserve, suggested that a second government stimulus package could provide a boost to the economy, as consumers cut back on spending.
September retail figures fell by 1.2 percent, which caused stocks to plummet and many financial experts to suggest that the country will definitely enter a recession period.
"With the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said, explaining the reasoning behind his suggestion to the House Budget Committee.
He added that any plan should be designed so that it would "limit longer-term effects" on the government’s budget deficit.
Congressional Democrats have been calling for an economic stimulus package for weeks, but have not yet received White House support for the plan.
A court case that is currently in the federal courts in Pittsburgh could help set a precedent for how law enforcement officials handle global positioning system data.
The issue centers on whether or not police officers should be required to demonstrate probable cause and obtain search warrants before they track suspects using GPS, the Pittsburgh Tribune-Review reports.
Federal prosecutors and law enforcement officials are seeking permission to obtain information on a suspect’s location using data stored by their cell phone – either in real time or via historic records.
They say that electronic surveillance is less expensive and more effective than following someone in a vehicle.
However, some privacy advocates have raised concerns about the possibility that this technology violates the Fourth Amendment to the U.S. Constitution, which protects against unreasonable searches and seizures.
Some of the legal questions about the use of GPS concern whether or not a person has a reasonable expectation of privacy when their vehicle is driving on a public road.
"The government and police say they are trying to keep people safe, but our rights do come into question. It’s a balancing act," civil rights attorney Sam Cordes told the news provider.
Developed by the U.S. Department of Defense, GPS uses satellites and monitoring stations to provide 3D location information, along with the time.
Retirees who have been fretting over the state of the stock market and their nest egg have a bit of good news to look forward to – social security benefits are rising by 5.8 percent in 2009.
According to the Social Security Administration, this increase – the largest since 1982 – will mean an average of $63 extra in a retiree’s monthly check.
This year’s jump is a marked departure from the cost of living increases of the past decade, which are tied to inflation. However, recent rises in costs such as food and fuel seem to have pushed the decision.
However, some suggest that despite the increase many seniors will still struggle to maintain their standard of living – or even make ends meet.
"Right now many senior citizens are feeling depressed because things seem out of control," California State economics professor Sung Won Sohn told the Associated Press.
If anything, many people are feeling uncertain about their financial future. The Congressional Budget Office recently estimated that Americans lost a total of $2 trillion from their retirement accounts over the past 15 months, due to fluctuations in the stock market.
A new law that took effect in Nevada this month aims to help protect data gathered by businesses about their customers, the Wall Street Journal reports.
The legislation states that companies are required to encrypt any personal information, including names and credit card details, that is transmitted electronically.
Firms may help protect themselves and their customers by purchasing email encryption software. Those that flout the law would be liable for unlimited civil penalties.
Other states, including Michigan and Washington, are mulling similar laws. Meanwhile, from January, Massachusetts businesses will be obligated to encrypt sensitive data about residents that is stored on portable devices, such as laptops.
Privacy lawyers in Massachusetts told the news provider that the legislation potentially paves the way for people to file civil lawsuits against firms in the case of a data breach.
In Nevada, it has already been established that firms complying with the law that suffer a data breach would have caps placed on the amount of damages they are forced to pay in a suit.
Some large-scale data breaches have made the headlines over the past couple of years, including an incident in which the credit and debit card details of 45.6 million customers of retailer TJX were put at risk.
Investor Warren Buffett, one of the richest men in the world, has announced that he is buying American stocks.
A bear market provides a perfect opportunity to purchase stocks at a low price, the billionaire suggested in an opinion column in the New York Times.
The Berkshire Hathaway CEO described how he had moved his money from government bonds to U.S. stocks in an attempt to take advantage of market conditions.
He repeated his oft-quoted advice to investors: "Be fearful when others are greedy and be greedy when others are fearful."
Buffett explained that although we are in the midst of a frightening economic period, including rising unemployment and falling business activity, the situation will take a turn for the better.
"What is likely … is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up," he wrote.
Savvy investors will not let this opportunity pass them by, he advised.
Buffett ranked number one on Forbes magazine’s 2008 World Billionaires list, with an estimated net worth of $62 billion.
Approximately 160 patients may be at risk of developing a staph infection, following a North Carolina hospital’s admission that it had neglected to sterilize surgical instruments.
Although the tools were cleaned, disinfected, decontaminated and packaged, they were not sterilized, the Fayetteville Observer reports.
Medical officials say that the risk of infection is slight, as the instruments had already undergone all of the other steps of the cleaning process.
However, some patients who have been affected by the scare told the news provider they were unsettled by the news.
One woman who did not want to give her name said, "You are so vulnerable when you’re a surgery patient. You’re at their mercy. You have to believe that they are going to take good care of you."
Dr. Chuck Chima, physician advisor to infection control, said that the patients were at risk of a regular staph infection, but not the antibiotic-resistant MRSA.
According to MedicineNet.com, there are more than 30 different types of staph bacteria that can cause infections in humans, with the most common being staphylococcus aureus.
Each year, millions of foreign visitors to the U.S. are fingerprinted at the airport – but did you know that some banks may also require prints from American citizens?
Bank of America customer Pauline Pavlis told the Press of Atlantic City about her experience trying to cash a check at one of the bank’s branches.
Because she is not a customer, she was asked to give a thumbprint to prove her identity, a practice which Pavlis questioned.
"I feel like it’s infringing on my personal liberties. You hear all the time about misuse of personal information," she told the news provider.
Fingerprinting is a common requirement for noncustomers at larger banks, the article states. Five years ago, one of these people sued Bank of America because it would not cash his check without a print and a Maryland court of appeals sided with the bank.
Timothy Doherty of the New Jersey Bankers Association, said that banks have a right to give preferential treatment to customers and prevent identity fraud.
He added that "the issue of protecting identities outweighs the issue of people concerned about giving thumbprints."
The government began fingerprinting foreign visitors to the U.S. in 2004.
Questions about the effects of trace amounts of pharmaceuticals that are found in Americans’ drinking water continue to cause concern among both scientists and members of the public.
An ABC News report reveals that while some scientists claim the concentration of prescription medications in tap water is so low that it poses no risk, others are deeply concerned about the long-term effects of exposure.
"The concern is we don’t know what these chemicals do in the body over a lifetime of exposure," Dr. Brian Buckley, an environmental scientist at Rutgers University, told the news provider.
He acknowledged that the amount of contamination is very slight, but said that he would rather "be safe than sorry" in regard to consuming pharmaceuticals through the water supply.
Additionally, Buckley raised concerns about the possibility of "drug-drug interaction," which may not be apparent until a person has consumed tap water over a period of several years.
Earlier this year, an Associated Press investigation uncovered levels of pharmaceuticals present in the drinking water of 24 major metropolitan areas across the country.
With something as serious as your health at stake, you might expect doctors to be able to look at medical research data and produce meaningful results for patients.
A new study, published in Psychological Science in the Public Interest, may cause you to think again.
The report describes various scenarios in which medical professionals have significantly misinterpreted statistics relating to the effects of drugs, behaviors and procedures.
For example, a pill backed up by research that promises to "double" the chances of a full recovery from an illness may mean raising the figure from one in 10,000 to two in 10,000 – but not all healthcare professionals understand the meaning behind the numbers.
"Many doctors, patients, journalists, and politicians alike do not understand what health statistics mean," the authors write, according to ABC News.
The researchers describe a situation of "statistical illiteracy" that they say is endemic in healthcare, for both patients and physicians.
In one scenario, a group of doctors was presented with a set of figures and asked to estimate the chances that a patient who tested positive for colorectal cancer actually had the disease. Many were unable to do so correctly.
An increasing number of older people are looking to reverse mortgages to boost their cash flow in retirement, according to new figures from a trade group.
The creation of these types of mortgages increased by 4.2 percent during the fiscal year, figures from the National Reverse Mortgage Lenders Association reveal.
Reverse mortgages are available to homeowners over 61 who want to convert some of the equity in their property into cash without selling, giving up the title or remortgaging. Their income from this transaction is tax-free.
The interest in reverse mortgages has been growing over the past several years, with this year’s total of 112,100 setting a new record for loan volume.
Peter Bell, president of the NRMLA, said that the group expects the number of these home loans to grow even higher in the coming years.
"Reverse mortgages are really one of the only positive stories in financial services this year, because they provide a safe, proven solution to many Americans’ retirement funding needs," he explained.
Effective from November 1st, the Department of Housing and Urban Development states that federally insured reverse mortgages have a single national loan limit of $417,000, Reuters reports.
A new poll reveals a shifting attitude about the role of big government in helping the U.S. out of the credit crunch.
The Bloomberg/Los Angeles Times survey, conducted on October 10-13, found that a larger number of people support the $700 billion bailout than oppose it.
This finding contrasts with the results of a similar poll conducted by Bloomberg/Times last month, which revealed that the majority of respondents were against the scheme.
Meanwhile, the majority of Americans seem to welcome some help from big government with their own financial problems.
The data indicates that a two-to-one proportion of respondents think the government should help homeowners who are facing foreclosure.
According to Bloomberg, some of this increased confidence in government action may be a result of positive activity in the stock market, which occurred just after details of the bailout were made public.
"They have to do something to spur the economy – otherwise, we’ll be further in the hole than we already were," independent voter Mike Hackenberg told the news agency.
The news comes after a recent survey by Reuters and the University of Michigan found that slightly more than half of Americans have lost confidence in the Federal Reserve in the past five years.
Just a few years ago, men and women on the cusp of retirement may have been feeling very good about their nest egg.
However, the economic turmoil of the past year has already done significant damage, according to reports. The Congressional Budget Office has estimated that retirement accounts lost a total of around $2 trillion over the past 15 months.
An article in U.S. News and World Report describes how baby boomers have been looking at different options for ensuring they have enough money to fund them throughout retirement.
Maurice Soto, a research associate at the Urban Institute, told the news provider that a potential retiree should make sure they have a portfolio that "reflects the time horizon and taste for risk" of their situation.
"The common advice is for households to reduce their exposure to stocks as they approach retirement," he explained.
Meanwhile, some workers who were hoping to get a different job after retirement or start a new business may want to think again in light of the effects of the credit crunch, the article suggested.
Richard Johnson of the Urban Institute said that new job opportunities – particularly part-time positions and flexible working – are likely to become scarce in the next few years.
Some studies have suggested that the chemical bisphenol A (BPA) could be linked to a number of different health problems, ranging from heart disease to cancer, even in low doses.
So why has the FDA not issued a stronger statement on its use to manufacture baby bottles? That is what the attorney generals from three states would like to know.
These individuals – from Connecticut, New Jersey and Delaware – wrote letters to 11 companies that that make containers used to feed babies, requesting that they discontinue their use of BPA.
Connecticut attorney general Richard Blumenthal said that the action was necessary because the FDA "has been asleep at the switch" regarding the regulation of BPA and is "resistant to respecting the scientific evidence" about the chemical’s risks.
Earlier this year, Laura Tarantino of the FDA said that "our tentative conclusion is that [BPA] is safe, so we’re not recommending any change in habits." Scientists estimate that more than 90 percent of Americans have trace amounts of BPA in their bodies.
The FDA has said it is preparing a new statement on the chemical that will be delivered later this month.
President Bush has described the government’s bailout plan – decried by some as meddling in the free market – as an "essential short-term measure" to free up credit and unfreeze the economy.
Some $250 billion of taxpayer money is set to be invested in some of the nation’s largest banks, in an effort to encourage lending and restore confidence in financial institutions.
In a speech, Bush said that the "limited and temporary" actions taken by the government were necessary to avoid a larger recession.
"These measures are not intended to take over the free market, but to preserve it," he explained.
Treasury secretary Henry Paulson also fleshed out further details of the government’s economic plan, including a scheme to guarantee new debt issued by banks for three years and an unlimited FDIC guarantee on bank deposits in non-interest accounts.
Banks that receive investment money will have to agree to limits on executive compensation during the period they are receiving funds, Paulson said.
A recent survey conducted by Reuters and the University of Michigan revealed that 29 percent of Americans said they have "a lot less" confidence in the Federal Reserve than they did five years ago.
New Hampshire hospitals that are guilty of serious errors may soon be required to report these missteps to the public, under a new law that is under consideration in the state.
The legislation centers on so-called "never events," which are defined by the National Quality Forum as medical care errors that are "clearly identifiable, preventable and serious in the consequences for patients – and that indicate a real problem in the safety and credibility of a healthcare facility," the Union Leader reports.
A 1999 study by the Institute of Medicine estimated that between 44,000 and 98,000 people die as a result of never events in U.S. hospitals each year.
However, New Hampshire is one of the states that does not keep track of such events, which the institute said may include problems such as adverse drug events, improper transfusions, surgical injuries and mistaken identities of patients – among others.
Lori Nerbonne of NH Patient Voices told the publication that it is in the public’s interest to know about hospital errors.
"We pay for this care, and as consumers, have a basic right to know if we or our family has been harmed or died as a result of it," she explained.
Privacy and civil liberty concerns have been raised about the way that the city of Santa Rosa, California manages the data it collects about residents.
More specifically, privacy advocates have been calling for stricter controls and clear policies to limit who can access information, the Press Democrat reports.
One of the initiatives that is under scrutiny is a scheme currently being carried out by city-hired contractors to photograph every street in the city.
The idea is to create a digital photo database of city-owned property so that future trips to the sites can be avoided, thus increasing efficiency.
However, Pam Dixon of the World Privacy Forum has said that Santa Rosa’s implementation of this plan has so far been "irresponsible."
"Information held by the government can be used to influence your world in very profound ways," she told the news provider.
In response, the city’s chief technology officer Eric McHenry said that his team had decided to cut back on the number of city employees who have access the street-level photos.
However, legal questions remain about how the information would be shared under California’s open access laws, the publication stated.