Ever wonder what it would be like to hold the key to the entire U.S. money supply?
That's the role Federal Reserve Chairman Alan Greenspan and his colleagues share as members of the Federal Open Market Committee, the group that sets the nation's monetary policy.
Associated Press writer Jeannine Aversa recently detailed the inner workings of the committee, which boosted short-term interest rates to 2.5 percent last week, the sixth increase since June.
Ms. Aversa said the core of each meeting is two staff presentations. In the first, regional Federal Reserve Bank presidents provide an economic outlook and forecast for their areas. That presentation is followed by a discussion of monetary policy options-raising, lowering, or holding interest rates and the rationale for each.
This is where Mr. Greenspan takes the lead, offering his view of the outlook and his recommendation on interest rates. Other Fed members then have an opportunity to present their views. The discussion is followed by a vote in which Mr. Greenspan goes first, followed by the committee's vice chairman, and then the rest of the voting members in alphabetical order.
The ultimate goal of the group is to find a neutral point where interest rates neither trigger inflation nor create a recession.
Up in smoke
Smoking has always meant big money for the tobacco industry. But these days, instead of cashing in, the industry is paying out huge sums in the way of jury verdicts.
A Missouri jury last week awarded the family of a woman who smoked Kool cigarettes for nearly 50 years more than $20 million in a wrongful death lawsuit against Kool maker Brown & Williamson.
That decision follows an October verdict in Los Angeles where a jury ordered Philip Morris to pay $28 billion to a 45-year smoker with lung cancer. A judge later slashed the award to $28 million.
Meanwhile, San Francisco is on the verge of enacting a ban prohibiting smoking in all city-owned parks, public plazas, and sports facilities except golf courses. And in North Carolina, the nation's largest tobacco-growing state, state lawmakers have banned smoking in both chambers.
Six years ago the tobacco industry agreed to a $246 billion settlement with the states to help pay the cost for treating sick smokers. Now, the federal government wants to hold cigarette makers accountable for decades of alleged deceit. A $280 billion lawsuit filed by the Justice Department contends that the tobacco industry knew the health dangers of smoking but hid that information from the public.
· Mexico's major source of income comes from oil, but did you know that the next biggest source comes from Mexican citizens living and working in the United States? Last year, Mexicans living north of the border sent $16.6 billion to their homeland, an increase of 24 percent over 2003. Mexican officials say about 25 million people of Mexican origin live in the United States, about 10 million of whom were born in Mexico.
· The growing Hispanic market is also catching the eye of marketers. Meredith Corp., publisher of Better Homes and Gardens and Ladies' Home Journal, will launch a new magazine aimed at Hispanic women next fall. Meredith officials say census figures show that within the next decade one in five new homeowners will be Hispanic.
· To the dismay of Democratic Party leaders, President Bush ended his first term in office with a net gain of 119,000 jobs. During the latest presidential campaign, many leading Democrats had warned voters that Bush would be the first president since Herbert Hoover to have a net loss of jobs on his watch. Instead, the nation added 2.2 million jobs last year.
· Sometimes less is more. A year ago, Time Warner dumped Warner Music Group after that division lost more than $466 million. So when the world's largest media company announced its latest financials, earnings were nearly doubled despite just a small increase in revenue.