Congress grills Delta, Northwest CEOs

The CEOs of Delta Air Lines and Northwest Airlines defended their proposed $3.1 billion merger before House and Senate committees Thursday, addressing lawmakers' concerns that the deal would stifle competition in the airline industry or result in massive job losses.

"Oil is a game changer, and this merger makes us stronger," Anderson told the House Judiciary Committee, noting that fuel prices have doubled in the last 12 months. "[The merger] gives us the ability to compete and win against foreign flag carriers."

Steenland said the merged airline would be more "financially stable and resilient," better able to meet customer needs and better able to provide benefits to workers. He also said no hubs would be closed as a result.

"We've gone from a highly competitive structure to an oligopoly," said Rep. John Conyers, D-Mich., chairman of the House panel, noting that passengers have suffered increased delays and prices from prior industry consolidation.

"We need to consider where this merger will take us," he said. "I'm concerned that if this merger is approved it will simply result in a cascade of other mergers."

Read More...

During the debate, Delta and Northwest proposed the same argument used by almost any merging companies: It will be more stable. This argument is somewhat flismy and the threat of an oligopoly and slippery slope effect is greater. Regardless, most mergers do get approved, and with the ATT merger aproval, it seems almost any company can merge without serious opposition.

Grade This Post.

Tax rebates to start arriving Monday

The federal government, eager to boost the flagging economy, will start distributing special tax rebates on Monday - five days earlier than expected, the Treasury Department said Thursday.

The department had said last month that it would begin giving rebates on May 2. Instead, 800,000 tax filers daily will get rebates on Monday, Tuesday and Wednesday. No rebates will be distributed on Thursday, and 5 million payments will be made on Friday.

The payments will go out ahead of schedule because of a new computer program that updates records daily - faster than an older program that updates weekly, according to Andrew DeSouza, a Treasury spokesman.

Overall, the Treasury will distribute more than $110 billion to 130 million taxpayers by July and hopes to get the first $50 billion out by the end of May, DeSouza said.

Read More...

So, for the first time in recorded history, the government is earlier than their deadline. Too bad that the only time that the government is effecient is when it is giving away taxpayer's money and excerbating the national debt.

Grade This Post.

Congress wants to jolt economy - again

Democratic leaders are signaling that they will launch a spring offensive on the economy by pushing for measures aimed at creating jobs and providing relief for Americans struggling financially.

The effort, which has started taking shape in the past week, comes just two months after the first stimulus package was enacted and a few weeks before the IRS will start distributing one-time tax rebates to more than 130 million households. The push is set against the election-year backdrop of a national economy that is showing
increasing signs of strain and even recession.

So far, President Bush isn't on board. He has said repeatedly he wants to give the first package a chance to work before considering other measures

Most policy analysts believe the Democrats face long odds in getting a full-blown standalone stimulus package through both chambers of Congress - at least not before summer and not before lawmakers pass a housing stimulus bill. But they say the odds are better than even that one or two stimulus measures could be attached to other bills.

Read More...

The Democrats are predictably behind this social welfare initiative, and most people are skeptical of its success. The reason seems to be the extremely short period of time that has past since the last stimulus. To put another package together before the first has even been distributed seems a little fast. The comic above should be applyed to congress, as Bush is actually against this policy.

Grade This Post.

Delta, Northwest to create largest airline

Delta Air Lines Inc will buy Northwest Airlines Corp for more than $3
billion under a proposal unveiled Monday to create the world's biggest airline,
as carriers seek to counter skyrocketing fuel prices and a weak economy.

After racking up $35 billion in losses and finally emerging from a
five-year slump in 2006, U.S. airlines are hoping mergers could lead to higher
fares as combined carriers reduce flights and use their increased market power
to raise prices.

The all-share deal will give Northwest shareholders 1.25 Delta shares
for each Northwest share they own, a 17 percent premium to Northwest's closing
price of $11.22 on the New York Stock Exchange. Delta shares closed up 4.7
percent at $10.48.

"It's a very optimistic view on an industry that's been very dismal for
the last couple of weeks," said airline consultant Robert Mann.

Read More...

In a market that hasn't been doing very well, this attempt to reverse the downward trend is understandable. Although this merger will lower competition, the new Delta airlines will still have a great deal of competition. Overall, this merger will probably not affect the average consumer greatly.

Grade This Post.

Assessment Complete

Looking beyond the recession

Despite a weak economy, railroad, trucking and homebuilding stocks are faring well, perhaps a sign that investors are banking on a recovery.

Although a turnaround appears to be far off, there are some early signs that Wall Streeters may be already positioning themselves for a rebound.

For example, a recent spate of bad corporate and economic news hasn't wreaked havoc on the markets, suggesting a floor has been put in place after months of heavy selling.

Additionally, railroad, trucking and homebuilding stocks have been rallying - a surprising occurrence considering those sectors have been among the hardest hit by the credit crunch.

"We're waiting for the economy to start showing it is recovering and that's keeping stocks stable right now," said Ron Kiddoo, chief investment officer at Cozad Asset Management. "But if we don't get some hint by late summer that a recovery is on the way, we could see bad days again."

Read More...

Rising fuel prices hurt school budgets

The school buses in Dubuque County, Iowa, travel 4,900 miles each day ferrying kids to and from class. That's the equivalent of driving across the entire United States and halfway back again.

The price of the diesel these buses run on has jumped 35 percent over the last year. The extra money paid to fuel the buses must come out of the local school district's general fund - money it would prefer to spend on other things.

"It's computers, it's teachers, it's you name it," said Bob Hingtgen, director of transportation at Western Dubuque County Community School District, located 65 miles north of Iowa City. "The pie is only so big. If a bigger slice is going to transportation, it leaves a smaller slice for everything else."

Hingtgen said the district spent $50,000 more fueling its 80 buses this year than it did last year, or roughly what he said it would cost for the starting salaries of two teachers.

Read More...