EFTA01139679

Giving the railroads the freedom to run their business as they saw fit led to dramatic improvements. The first 
result was a sharp rise in traffic and productivity and fall in freight costs. Since 1981 productivity has risen by 
172%, after years of stagnation. Adjusted for inflation, rates are down by 55% since 1981. Rail's share of the 
freight market, measured in ton-miles, has risen steadily to 43%—about the highest in any rich country. 
The $34 billion purchase in 2009 by Warren Buffett's Berkshire Hathaway of Burlington Northern Santa Fe 
(BNSF), one of the seven main freight railways (see chart 2), opened many Americans' eyes to the industry's 
significance. That America's shrewdest investor should place his biggest bet on BNSF focused attention on how 
the country's railways have been quietly boosting the economy by sucking costs out of many supply chains. 
Coal is the biggest single cargo, accounting for 45% by volume and 23% by value. More than 70% of coal 
transport is by rail. As demand grows for the lower-sulphur coal from the Powder River Basin in Wyoming, it 
has to travel farther. In response railroads have invested in more powerful locomotives to haul longer coal trains: 
since 1990 the average horsepower of their fleet has risen by 72%. Yet energy efficiency has also improved. 
Lighter, aluminium freight wagons, double-decker ones and more fuel-efficient locomotives have lifted the 
number of ton-miles per (American) gallon of fuel from 332 to 457—an improvement of 38%. 
But the fastest-growing part of rail freight has been "intermodal" traffic: containers or truck trailers loaded on to 
flat railcars. The number of such shipments rose from 3m in 1980 to 12.3m in 2006, before the downturn caused 
a slight falling back. Behind this lies the tide of imports coming into the West Coast ports of Long Beach and 
Los Angeles. A special rail expressway for freight, the Alameda Corridor, was opened in 2002 to link the ports to 
the big national rail routes, bypassing the 200 level crossings (grade crossings, in America) on the original 
branch lines that used to cause huge traffic jams on the roads as mile-long freight trains rumbled across. The 
corridor, one of the biggest infrastructure projects in modem America, was completed on time and on budget for 
$2.4 billion by a public-private partnership considered by many to be a model for other rail schemes, such as 
California's proposed high-speed passenger line. 
Despite lots of investment—amounting to $460 billion since 1980, and equivalent to 40% of revenues in recent 
years—capacity constraints and rising fuel costs pushed up freight rates from 2003 until the onset of recession, 
since when they have levelled off This has caused unhappiness among some coal companies which have no 
alternative means of transport. Although most American rail corridors involve two railroads covering the same 
origin and destination points, in reality competition is limited. Usually one route is more direct than the other, 
and if a mining company has sidings and a branch line linked to one railroad it cannot quickly and easily switch 
to another. Even so, American rail freight is among the cheapest in the world, costing less than half as much as in 
Japan or Europe. After adjusting for differences in purchasing power it is cheaper even than in China. 
But the past ten years have seen another source of growth, as interstate highways have become clogged in places 
and have shown the effects of a lack of investment. Since one freight train can carry as much as 280 lorries can, 
railways can help to limit the rise in road congestion. Trucking companies such as J.B. Hunt have come to see 
the advantage of putting trailers on flat wagons for long-haul and using roads only for local pickup and delivery. 
This move was also spurred, according to Mr Phillips, by a shortage of lorry drivers. He says that tougher drink-
driving rules and social changes have shrunk the numbers of "good ole boy" truckers inured to a life on the road. 
Most hauliers now suffer labour turnover of 100% a year. 
EFTA01139699

Freight railways' very success is starting to create difficulties for them. The Department of Transportation 
estimates that many are already exceeding their theoretical capacity and are congested. It estimates that lots more 
investment will be needed, because capacity will have to rise by nearly 90% to meet forecast demand by 2035. 
The investment bill could rise yet more because of a change in the pattern of trade: in 2014 the Panama Canal 
opens a second lane, doubling its capacity and allowing it to carry bigger container vessels and bulk ships. 
Coming through to Gulf of Mexico and East Coast ports, these vessels will increase the need for better rail links 
inland. 
In addition the freight railroads face a $15 billion bill for a new safety system to control trains on lines that also 
carry passengers or dangerous chemical cargoes. This system, Positive Train Control (PTC), is intended to stop 
or slow a train automatically if a driver goes too fast or passes a red signal. The bill to introduce PTC was signed 
by George Bush in 2008 only a month after a crash between a Metrolink commuter train and a Union Pacific 
freight train in California, causing 25 deaths and 135 injuries. The railway companies complain that only 3% of 
crashes are caused by the sort of human error that PTC is designed to avert and that claims that the system will 
improve efficiency on the network are unfounded. Whereas the FRA says that the new safety system will apply 
to only 65,000 miles (out of a total of over 140,000), the industry reckons it will cover more than half the 
network. The railways are seeking tax breaks and other subsidies to reduce the cost of complying. 
But as a nation we have to see past the monetary success of one segment of transportation, when passenger travel 
is as important as freight and when technology advances in high speed rail could lead to advances in other 
segments, in addition to making the country more competitive. For a period n the 1990s I lived in Paris and 
commuted to London weekly via Eurostar, because it was much easier, cheaper and more efficient than traveling 
via planes. And having commuted between New York, Washington DC and Boston on a regular basis in the 
1970s, for me the advantage of a high speed rail corridor is a new brainer. To not invest in high speed rail is akin 
to not supporting the expansion of the transcontinental rail road in the United States or the highway system. 
Finally, if only for one reason, JOBS, we as a country should embrace and support high speed rail across 
America. Again, we have to start thinking about what is good for the country, instead of pursuing self-interest at 
the cost of innovation. 
Last week Steven Rattner, a long-time Wall Street financier who led the restructuring of the auto 
industry in 2009 as counselor to the Treasury secretary under the Obama administration wrote in an 
op-ed in the New York Times - America in 2013, as Told in Charts - Looking back on 2013, 
many of the economic and political themes seemed familiar: a weak economy. Growing income 
inequality. Gridlock in Washington. Partisan wrangling over fiscal policy. But others, like the 
disastrous rollout of the Affordable Care Act HealthCare.gov website and the government shutdown, 
were new or at least revivals. To illustrate what happened Rattner presented io charts covering the 
first year of President Obama's second term: 
1. 
Economic trends of recent years continue in 2013 — particularly the diverging fortunes of the rich 
and everyone else — but in some ways they accelerated. The stock market, as measured by the 
Standard & Poor's index, was up a stunning 32 percent (through Dec. 27). Corporate profits rose to a 
record $2.1 trillion. Meanwhile, incomes remained nearly flat and jobs tallies grew slowly. Through 
Oct. 3o, earnings were up just 1.4 percent, an even smaller increase than in 2012. The only relative 
bright spot for the average American was housing; thanks in part to the aggressive efforts by the 
Federal Reserve to hold down interest rates, sale prices of homes were up by 13.3 percent in 
September, compared with a year earlier. 
EFTA01139700

2. Economic growth — a likely increase in gross domestic product of just 1.8 percent in 2013, after 
adjusting for inflation — was also unbalanced in other ways, particularly the impact of the government. 
The nation's quickly falling deficit (it dropped from $1.09 trillion to $680 billion in a single year) cost 
dearly in economic activity. Spending by cash-strapped consumers and investment by skittish 
businesses both grew at slightly below customary rates. A flat-lining Europe dented President Obama's 
pledge to double American exports by 2015. On the other hand, home building and related residential 
activity, depressed since the onset of the financial crisis, provided a second annual lift to the economy. 
3. Employment remained an overarching problem. While job growth has picked up steam in the last 
few months, the fall's higher pace of job creation — around 200,000 per month — would still not be 
nearly enough to bring unemployment down to pre-recession levels. According to calculations by the 
Brookings Institution's Hamilton Project, even if the 200,000 jobs per month rate were maintained, 
the unemployment rate would not fall to the November 2007 level of 4.7 percent for another five years. 
4. Not only has the job recovery been sluggish, but also a disproportionate number of those that have 
been created have been in lower wage occupations, such as retail clerks and fast-food workers. And 
that trend is projected (by the Bureau of Labor Statistics) to continue; using a simple average, the 10 
job categories expected to add the most jobs during the current decade boasted a collective median 
wage of $32,386 in 2010, roughly $15 per hour and far below the United States median of $51,892 at 
the time. Seven of the 10 categories pay below this average. Note the conspicuous absence of 
manufacturing; it may be recovering, but it isn't what is driving new jobs. 
5. Wage increases haven't been paltry because the efficiency of the American worker has flagged; 
indeed, productivity has continued to chug along. But those productivity gains have simply not been 
passed on to workers. Between 2000 and 2012, productivity rose by 22 percent while wages increased 
by 7.7 percent. The divergence was particularly great over the last three years of that period —
productivity up 4.6 percent and real wages down 1.1 percent. For this failure of the American worker to 
be rewarded for his growing output, blame a variety of factors, perhaps most important, globalization, 
which has allowed companies to move production to whatever part of the planet offers the lowest cost 
labor. In that respect, American workers remain in a race to the bottom. 
6. The troubles with the Affordable Care Act's HealthCare.gov rollout sure grabbed daily headlines 
this fall. But throughout the commotion, little mention was made of the most fundamental aspect of 
the law: the way in which it raises nearly $2 trillion over the next decade — mostly from wealthy 
individuals and health care providers — and uses the money to fund the largest expansion in insurance 
coverage since Medicare was created nearly 5o years ago. As shown above, the end result should be 
better health care options for those closer to the bottom end of the income scale, through the Medicaid 
expansion and creation of exchanges with subsidies for most participants. The intended result: 25 
million fewer uninsured Americans. Yes, this is redistribution on a grand scale, and we should all be 
very proud of it. But as evidenced by Obamacare's consistently poor poll numbers, most Americans are 
not feeling charitable toward the less well off. 
7. Trust in many American institutions has been declining, but few institutions have fallen so far out 
of grace as Congress. Last year, I showed that the previous Congress was the least productive Congress 
in modern times, including the famous Do-Nothing Congress of 1947-48, passing just 238 laws, 37 
percent of the average of the 32 Congresses that preceded it. In 2013, the first year of this Congress, 
the number of new laws passed fell further, to 55 (as of Nov. 30), seven fewer than during the same 
period in 2011. As a result, Congress now stands dead last in approval rating among key American 
institutions — far below other braches of government, below news outlets, below banks and even below 
big business. 
8. Congress well deserves that poll standing, in significant part because of the damage that it has done 
to the federal budget. The combination of Republican determination to cut spending and Democratic 
insistence that none of the entitlement programs (such as Medicare and Social Security) be 
meaningfully affected has resulted in the utterly inane policy of starving key domestic programs, 
including education, infrastructure and research and development. The recent budget fight and 
subsequent agreement did nothing to change that trajectory. As shown by the red line above, all that 
EFTA01139701

resulted was avoiding the worst two years of forced budget cuts to these programs; for the 1O years 
beginning in 2008, this important spending will rise slightly in nominal numbers but will fall by 5 
percent, after adjusting for inflation. 
9. The dysfunction in Washington has taken its toll in other important ways. Not only has business 
confidence been shaken, but each new political battle has also been terrifying for consumers. Back in 
the summer of 2011, when the United States had its AAA credit rating removed by 
. after it flirted 
with default, consumer confidence recorded the second biggest two-month drop ever, behind only the 
aftermath of Hurricane Katrina. A smaller decline occurred at the end of 2012 when Congress nearly 
went over a fiscal cliff. Beginning this past July, consumer confidence dropped to its lowest level in 
nearly two years as a result of the government shutdown, the A.C.A. problems and related battles. 
Now, a two-year budget nearly in hand, Americans' moods seem to have improved. At a time when we 
need consumers to spend (prudently), these periods of faltering confidence have real economic 
consequences. 
1O. In contrast to the mood in most of the country and the still slow economy, Silicon Valley is partying 
again, albeit not quite like 1999. The Facebook initial public offering in May 2012 helped usher in a 
resurgence of excitement among investors for anything that looks like a sexy new high-tech service. 
This year's poster child 
. was Twitter, which set a new record of one kind among recent major 
technology 
.'s: its valuation of more than 28 times its revenues. That didn't daunt investors; the 
stock promptly more than doubled and now trades at 65 times revenues. (Of course, there are no 
profits.) To see all of the charts please see the attached article. 
Economic Winners and Losers 
Profits 
+44.7% 
+40 — 
Change since the end of 2007. 
i/ Stocks 
+43.2%
+30 — 
+20 — 
+10% — 
UP 
DOWN 
- 10% — 
-20 — 
-30 — 
-40 — 
2008 
2009 
2010 
2011 
 
2012 
2013 
Incomes +3.9% 
Housing -10.4% 
Latest available data. 
Stocks are the S&P 500 
plus their dividends. 
Sources: Bureau of Economic Analysis; Bloomberg; Sentier Research; Bureau of Labor Statistics; Case-Shiller 
What is depressing is to think Obama will be blamed for everything that "went wrong", with no 
mention of the way he was sabotaged by Republicans and their ilk at every turn, plus a label of "a 
depressing first year of Obama's second term". More depressing it is to see how so many Americans 
love to batter a decent man for their own political gain and to keep the status quo so their greediness 
can be satisfied. This is no way to act in a democratic society. Friends in other countries weep for you. 
June Beeby - Kingston, Ontario Canada 
EFTA01139702

While should not come as a surprise to anyone with the ability to reason, these charts starkly confirm 
what we already know: that the greatest wealth redistribution in American history has occurred over 
the past thirty years. Corporations, the wealthy, and their political allies have managed to tag any 
governmental action that doesn't enrich them as socialism, while filling their own pockets to the point 
where even the 19th century's "robber barons" would be embarrassed. 
The ironic element to this is that it is the common folk who have-- in a political sense-- made this 
possible by voting against their own interests time and again. When working people resent unions, 
people with defined benefit pensions, money spent on public education and infrastructure investment, 
immigrants, and affordable health care for all of their fellow citizens then you know that we have truly 
entered the era of Bizarro America where down is up, truth is falsehood, and war is peace. 
But thank the lord that taxes can't be raised on those most able to afford them and who have benefited 
the most from the wealth redistribution policies of our times. It's apparently better to pass the burden 
down to our undereducated, underemployed children rather than demand that the policies that have 
resulted in the economic imbalances demonstrated by these charts are brought to an end-- now. Not in 
five years, not in ten years, not in fifty years, but now. 
DGP - Oneonta, NY 
Would like to see some graphs that reflect the Republican Party's contribution to the poor economic 
performance. What has been the impact of not continuing unemployment insurance? What has been 
the impact of not raising the minimum wage? What has been the impact of contributing to the failure 
of the ACA without making any effort to provide almost universal coverage to the population? Why not 
legislation that provides an avenue for immigrants to become citizens? On and on!! 
George Gluck — New Jersey 
Mr. Rattner appears to confuse quantity with quality when attributing the public's displeasure with 
Congress to the smaller number of laws passed. I would suggest that passing more inane statutes that 
are so enormous that they are unable to be read and understood by the Congress (much less the 
general public) is a lot less important than perhaps streamlining the regulations that are already in 
force, and deleting the unending loopholes that are custom written and inserted into all of the 
voluminous laws being passed. I would rather see fewer more concise laws passed. 
BL — Potomac, Md 
Nothing ventured, nothing gained. Some momentum on the minimum wage could develop into a real 
impact on income inequality. The Affordable Care Act would have had many, many glitches no matter 
what; it will take some time to sort them out but we should all end up ahead. The Tea Party is in a 
defensive crouch and even Congress shows signs of realizing they are going to have to do better. We 
are talking to Iran and shaking hands with Cuba, and very slowly extricating ourselves from various 
western Asia and Middle East civil confrontations, forcing them to sort things out themselves, as they 
must eventually. I'm not an optimist but where there is change there is opportunity. 
Robert York - New York (Sty 
EFTA01139703

****** 
If there is a list that you would try to keep your company off, it is Douglas A. McIntyre's list of - The 
to Most Hated Companies in America - published last week by 24/7 Wall Street that was 
later picked up (re-published) by other media outlets and platforms across the country and around the 
world. Contained are the obvious suspects as they are often the subject of ridicule by late night comics 
and the blogosphere, so how did K-Mart not make this list? And why is Blackberry on it, especially 
when I was a loyal "crackberry" user for more than 15 years until I transitioned to the Samsung S4 
last fall.... I still miss the keyboard, but then any smartphone maker who didn't realize that a 
companion tablet would become as important as the phone itself, maybe shouldn't be in the 
business 
As for lululemon, I thought that it was a trendy competitor to Jamba Juice, since yoga 
isn't my thing. By the way who still shops at JC Penny? And if WalMart is so hated how come it is 
the largest retailer on the planet without real competitors? I grew up looking at the Sears & 
Roebuck catalog like every day was the night before Christmas, how did Sears miss the boat that 
Amazon caught? With this said, if you have the time please enjoy the list below and for more 
information please feel free to review the entire article by McIntyre to see which companies that you 
would have added to the list. 
These are the 10 most-hated companies in America. 
1. McDonald's 
McDonald's (NYSE: MCD) was at the center of the most significant labor movement of 2013. The 
company has, between its owned and operated stores and franchises, hundreds of thousands of 
employees who earn barely more than the minimum wage. A recent study conducted by the National 
Employment Law Project (NELP) found that McDonald's employees rely more on public assistance 
programs than any other large fast-food company, with an estimated $1.2 billion in costs to the public. 
Making matters worse, McDonald's advised some of its employees to sell their possessions to make-up 
for holiday spending debt. Recently, the fast food chain's hotline designated to help its workers live on 
their modest incomes encouraged employees to apply for food stamps. Low wages may be why the fast-
food giant scored just 93 in the American Customer Satisfaction Index, the lowest in the limited service 
restaurant. 
2. Abercrombie & Fitch 
Long-time Abercrombie & Fitch (NYSE: ANF) CEO Michael Jeffries is often referred to as the 
"modern founder" of the decades-old clothing line. But he became the subject of controversy when 
comments he made in 2006 about who the company wishes to see as its core customers recently 
surfaced. The comments implied that the teen retailer is looking to attract what he refers to as the "cool 
EFTA01139704

kids" and aims to avoid overweight customers. Still, he has the backing of the board. In response to an 
attempt by activist shareholder group Engaged Capital to force him out, the board gave Jefferies a new 
contract. Between the loud music and shoddy goods, if you have been in a A & F store lately you have 
to wonder how it is still in business. But then maybe I am not a "cool kid." 
3. Electronic Arts 
Leading game maker EA (NASDAQ: EA) has recently hit some serious roadblocks. The company's 
highly anticipated SimCity reboot was by all accounts a public relations disaster. The game servers 
failed to function for nearly a week after the launch, which meant consumers couldn't play the game 
for a week after they purchased it. The company eventually offered a free game to anyone who had 
purchased SimCity in the early days. One of the free games offered was Mass Effect 3, another release 
that tarnished the company's brand. Critics and garners widely criticized the ending of the third 
installment of this very successful game as unsatisfying. The backlash was so severe that the company 
eventually released a free alternate ending. And there may be more troubles ahead. EA is having 
problems with yet another bug-filled launch, the fourth installment of the Battlefield franchise. On top 
of this, investors are suing the company for allegedly making misleading statements about the game's 
launch and overstating its success. It's perhaps not surprising then that, once again, The Consumerist 
labeled EA the "Worst Company in America" last year — the first company ever to earn the dubious 
distinction two years in a row. 
4. Sears Holdings 
Sears Holdings (NASDAQ: SHLD) is the parent corporation of retailers Sears and Kmart — both 
notorious underperformers. Investors have lost trust in controlling shareholder and chairman Eddie 
Lampert, whose poor management and decision-making has caused the company to shrink. Only 17% 
of the company's workers approved of Lampert's performance, according to Glassdoor. Sears was also 
ranked among the worst companies to work for last year, according to an analysis of Glassdoor data by 
24/7 Wall St. Employees rated it a 2.5 out of 5, among the lowest marks awarded to a company of that 
size. This may be why the ACSI gave Sears a lower customer service score than every retailer in the 
industry, except for Walmart. As is the case at many of the country's largest retailers, Sears and Kmart 
are among the largest employers of low-wage workers in the country, according to analysis by 24/7 
Wall St. in collaboration with NELP. 
5. DISH Network 
Subscribers aren't impressed with DISH's (NASDAQ: DISH) customer service. DISH earned a spot in 
MSN's 2013 Customer Service Hall of Shame largely because of its aggressive sales tactics. Customers 
also complained about confusing contracts and unreasonable cancellation fees. DISH is not the only 
company in the industry that customers despise, however, it reaps additional notoriety because of its 
relationship with its employees. Based on a 24/7 Wall St. analysis of Glassdoor data, DISH was rated 
as the worst company to work for last year. 
6. Wal-mart 
Like McDonald's, Walmart (NYSE: WMT) bore the brunt of the labor protests around raising the 
minimum wage last year. The company employs more workers who make less than $10 per hour than 
any company in America, according to an analysis by 24/7 Wall St in collaboration with NELP. While 
the company reports that its U.S. workers make an average of $12.81 an hour, this does not include 
part-time hourly wages. According to Glassdoor, Walmart sales associates, who are often part-time 
EFTA01139705

hourly employees, earn less than $9.00 an hour, on average. Further, only half of the store's employees 
approve of the CEO. Customers were less satisfied with service at Walmart in 2012 than at any 
competing chain. Possibly as part of an effort to stem employee dissatisfaction and deflect negative 
media attention, the world's largest retailer promoted 35,00o part-time workers to full-time status. 
7. JPMorgan Chase 
JPMorgan Chase (NYSE: JPM) has been embroiled in several major scandals in recent years. In 2012, 
the company captured headlines with the so-called "London Whale" fiasco, in which a series of trades 
cost it billions of dollars. As a result, the company's management and its risk controls were criticized. 
Yet, as 2013 wore on, the scandals continued piling up. In October, the company agreed to pay a $13 
billion settlement related to its actions — and those of acquisitions Bear Steams and Washington 
Mutual — in off-loading poor quality mortgage-backed securities onto investors. JPMorgan also 
became the focus of a scandal in China and Hong Kong, where it reportedly hired the children of 
Chinese elites to help facilitate the bank's business in China. The new year has also started off poorly 
for the bank, which was fined for ignoring signs that Bernie Madoff was running a ponzi scheme. The 
mounting negative press has led many to call for CEO Jamie Dimon's residentation. 
8. lululemon 
lululemon was once one of the world's most-promising retail companies. However, it has fallen on 
hard times. Shares are down nearly 20% in the past 12 months, compared with the S&P 500's 25% 
increase. lululemon was once the only game in town for yoga wear, clothing that has become 
extremely popular in the last few years. But larger clothing brands have begun eating away at the 
company's market share. Shares are down more than 15% since the company cut its outlook for the 
fourth quarter and fiscal year in mid-December. The company was embroiled in several public 
relations fiascos last year. After customers began complaining that one style of the company's pants 
were see-through in certain conditions, lululemon issued a recall. The problems might have ended 
there had the company's Chairman Chip Wilson not mentioned on television that the pants might not 
work on women of all sizes. In the ensuing fallout, Wilson resigned. 
9. BlackBerry 
The long and tragic decline of BlackBerry is a good example of how quickly a market leader can go 
astray. The grandfather of the smartphone industry has lost almost all of its market share to current 
leaders Apple and Samsung. As recently as 2008 the company was one of the largest sellers of 
smartphones in the world, with total unit sales more than double those of Apple. Since then, however, 
the company's share of the mobile phone market has evaporated. BlackBerry shares dropped by nearly 
30% over the past year, while the S&P 500 gained more than 25%. Revenue in the third quarter was 
approximately $1.2 billion, down 56% from the year before. The company recorded revenue from 1.9 
million smartphones in the period, compared to 6.9 million in the same quarter of the previous year, 
and the company lost $4.4 billion in the quarter. In contrast, Apple sold 33.8 million iPhones in its last 
reported quarter. BlackBerry launched two new phones last year in a last-ditch effort to field a 
competitive product. Unfortunately, consumers ignored the Zio and Qio, prompting the company to 
announce it was cutting one-third of its staff and taking an inventory write-down of roughly $960 
million in its fiscal second quarter. 
10. JCPenney 
EFTA01139706

JCPenney has probably made more operational and strategic mistakes than any other large publicly 
traded company in America. Penney hired Apple's retail chief Ron Johnson in November 2011 to 
replace longtime CEO Mike Ullman. Johnson implemented a series of marketing and merchandising 
strategies that not only failed to boost revenue but actually hurt sales — same-store sales and revenue 
fell roughly 25% in fiscal 2012. Same store sales failed to meet modest expectations in 2013. The 
company then rehired Ullman as CEO in April 2013, despite his poor performance before Johnson 
joined. Since returning, Ullman has announced plans to reverse most of Johnson's changes. Because of 
its sales failures and poor balance sheet, Penney is considered by many to be teetering on the brink of 
bankruptcy. The stock market has ravaged the stock, pushing down shares by 60% over the last five 
years. JC Penney has also done poorly in the critical e-commerce sector. In the Foresee study of online 
retail customer satisfaction, Penney only saving grace is that it can claim that you might have a better 
shopping experience than at K-Mart. 
****** 
Wages Fall Even Further Behind 
Percentage change since 1948. 
200% — 
Net productivity 
150 — 
100 — 
Hourly compensation 
50 — 
'50 
'60 
'70 
'80 
'90 
'00 
'10 
Sources: Economic Policy Insitute; Bureau of Labor Statistics 
+241% 
+108% 
Conservatives in American like to say that the War on Poverty which was enacted under President 
Lyndon Johnson fifty years ago failed. That instead of providing a hand-up, the social safety net 
programs are simply hand-outs pushing the poor into the economic mainstream beyond their 
contribution and participation. Not only is this misleading it is false. First, the largest expansion of 
poor support outside of health care has been the Earned Income Tax Credit, a wage subsidy that has 
been shown to not only reduce poverty significantly (by 10 million in 2012), but is also a strong work 
incentive. Moreover, research that follows poor children into adulthood finds that benefits like the 
EITC and even nutritional support have lasting impacts that improve key outcomes--health, high-
school completion, employment and earnings--later in life. To view these programs as "handouts" 
misses the fact that they act more like investments in the lives of many of their recipients. 
This week in The Huffington Post, Jared Bernstein wrote the article - The Conservative 
Response to the War on Poverty Discussion -- So Far — He starts out his article; I'm finding 
some of the responses by conservative politicians, economists, et al to the War on Poverty discussion to 
EFTA01139707

be interesting and revealing. There's a lot of silliness, and worse, of course. I'd assign the Reagan quip 
("we fought a war on poverty and lost") to that category, as well as the misleading $2o trillion talking 
point (see this Mike Konczal piece out today on this). But once they get past the canned stuff, there's 
some interesting substance. Progressives have largely been pointing out that, in fact, rigorous analysis 
shows both significant and even lasting progress against poverty, amidst steep remaining challenges. 
The anti-poverty effectiveness of the programs developed and expanded before and since the War on 
Poverty is easily seen in figures like the one I reprint below, showing the increased divergence 
between pre-transfer and post-transfer poverty rates (the figure also shows the increasingly irrelevant 
official rate, which leaves out a lot of what we've done to reduce poverty). Yet the fact remains that 16 
percent remain poor. 
We have to wonder why Conservatives believe that reducing taxes is the solution for everything. They 
keep trotting out the notion of means testing as a way to address social security and other programs, 
which will lead to them being undercut as less and less people are covered. Then you hear Sen. Marco 
Rubio talking about how we need more worker training while he is supporting Rep Paul Ryan's House 
budget, which achieves 6o percent of its steep spending cuts from low-income programs, including 
training budgets. What else is on the R's anti-poverty agenda?: 
--Tax reform: There seem to be two broad ideas here, one of which has a lot of merit. The first is the 
old supply-side canard about how lower marginal tax rates will boost growth and jobs, etc. This is not 
a serious proposal. 
Poverty rate 
Predicted rate without 
30% 
government programs 
25 
20 
15 
10 
5 
0 
'64 
'74 
'84 
'94 
'04 
'12 
But after presenting a bit of the ole' supply-side catechism in this piece from a few days ago, former 
GW Bush administration economist Glenn Hubbard acknowledged that supply-side elixir "...is 
insufficient for increasing the inclusion of low-wage workers, whose incomes may not benefit fully 
from economic growth." 
Hubbard goes on to endorse a smart idea that I've heard from numerous others in his camp: expand 
the Earned Income Credit to adult workers without kids. While the annual credit for working families 
with kids averages between $2-3,000, the one for childless adults averages less than $3oo. 
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Now, Hubbard et al want to trade this expansion for the elimination of the minimum wage, so the 
idea...um...needs a bit of work. But the EITC part is a good reform that would incentivize work and 
lower poverty. 
--Block grants: Just wrap up all the damn poverty programs into one big package and dump 'em all on 
the states. OK, maybe that's not quite how they'd put it, but this is a pretty sure-fire recipe to surgically 
extract the critical countercyclical function of the safety net. I explain here, with disapproving 
reference to Sen. Rubio's float of this idea last week. 
--Other stuff: Here's a review of how what some conservatives are thinking about in this space, 
including standard issue stuff--deregulate (e.g., less professional licensing), sub-minimum wage, more 
marriage--and some less standard ideas, including helping those with criminal backgrounds get back 
into the workforce. Many conservatives also support access to pre-school for disadvantaged kids. 
So, nothing exceptionally path-breaking here, but it's a good conversation, and I'm struck by some 
conservatives' interest in raising the EITC for adult workers without kids. That would be a real 
advance. And yes, it's all rhetoric in a climate where little can move forward and budgets--on both 
sides--often fail to match rhetoric. In fact, a good question for a later post is what the Democrats' 
agenda for poverty reduction. There is a lot of interest from the admin and the Democrats on extended 
UI, a higher minimum wage, and, in terms of boosting mobility, the president's universal pre-school 
program. All good ideas -- a good start; but as Jared Bernstein points out 'full employment" not on 
the list. Nor is the other costs of poverty that can't be measured in numbers. 
****** 
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This week the PEW Research Center published an article by Drew Desilver - Who's poor in 
America? so years into the `War on Poverty,' a data portrait - which was a the set of social 
programs enacted in 1964-1965 came to be called, was arguably the most ambitious domestic policy 
initiative since the Great Depression. But for decades, politicians and social scientists have argued 
about whether Johnson's antipoverty programs have lifted people out of destitution, trapped them in 
cycles of dependency, or both enacted under President Lyndon Johnson after he used his first State of 
the Union address to urge "all-out war on human poverty and unemployment in these United States." 
Critics note that the official poverty rate, as calculated by the Census Bureau, has fallen only modestly, 
from 19% in 1964 to 15% in 2012 (the most recent year available). But other analysts, citing 
shortcomings in the official poverty measure, focus on a supplemental measure (also produced by the 
Census Bureau) to argue that more progress has been made. A team of researchers from Columbia 
University, for example, calculated an "anchored" supplemental measure — essentially the 2012 
measure carried back through time and adjusted for historical inflation — and found that it fell from 
about 26% in 1967 to 16% in 2012. 
What's inarguable, though, is that the demographics of America's poor have shifted over the decades. 
Here's a look at what has, and hasn't, changed, based on the official measure. Today, most poor 
Americans are in their prime working years: In 2012, 57% of poor Americans were ages 18 to 64, 
versus 41.7% in 1959. 
Poverty Rates for Children and Elderly 
The Geography of America's Poor 
4O3'0 
36.2% 
35 o `..(NA) 
30 27.34. 
25 
20 
15 
10 
21.8% 
Be low 18 
years old 
Percent by region of total US. below poverty line 
1.4.6% 23.894 
22.5 19.0 
17.0 161 
■ 
"It NORTHEAST 
MIDWEST 
5 
0  
'59 
'70 
'80 
'90 
'00 
'12 
SOUTH 
, - 
46.9 411 
Source: Census Bureau 
PEW RESEARCH CENTER 
Source: Census Bureau 
PEW RESEARCH CENTER 
Far fewer elderly are poor: In 1966, 28.5% of Americans ages 65 and over were poor; by 2012 just 
9.1% were. There were 1.2 million fewer elderly poor in 2012 than in 1966, despite the doubling of the 
total elderly population. Researchers generally credit this steep drop to Social Security, particularly the 
expansion and inflation-indexing of benefits during the 197os. 
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But childhood poverty persists: Poverty among children younger than 18 began dropping even 
before the War on Poverty. From 27.3% in 1959, childhood poverty fell to 23% in 1964 and to 14% by 
1969. Since then, however, the childhood poverty rate has risen, fallen and, since the 2007-08 financial 
crisis, risen again. 
Today's poor families are structured differently: In 1973, the first year for which data are 
available, more than half (51.4%) of poor families were headed by a married couple; 45.4% were 
headed by women. In 2012, just over half (50.3%) of poor families were female-headed, while 38.9% 
were headed by married couples. 
Poverty regions Poverty is more evenly distributed, though still heaviest in the South: In 
1969, 45.9% of poor Americans lived in the South, a region that accounted for 31% of the U.S. 
population at the time. At 17.9%, the South's poverty rate was far above other regions. In 2012, the 
South was home to 37.3% of all Americans and 41.1% of the nation's poor people; though the South's 
poverty rate, 16.5%, was the highest among the four Census-designated regions, it was only 3.2 
percentage points above the lowest (the Midwest). 
Poverty among blacks has fallen sharply: In 1966, two years after Johnson's speech, four-in-ten 
(41.8%) of African-Americans were poor; blacks constituted nearly a third (31.1%) of all poor 
Americans. By 2012, poverty among African-Americans had fallen to 27.2% — still more than double 
the rate among whites (12.7%, 1.4 percentage points higher than in 1966). 
But poverty has risen among Hispanics. Poverty data for Hispanics, who can be of any race, 
wasn't collected until 1972. That year, 22.8% lived below the poverty threshold. In 2012, the share of 
Hispanics in poverty had risen to 25.6%. But the U.S. Hispanic population has quintupled over that 
time. As a result, more than half of the 22 million-person increase in official poverty between 1972 and 
2012 was among Hispanics. 
Fighting poverty is a complex equation and building social programs is part of that. It seems 
impossible to track exactly how much of the decrease in poverty has to do with the growth of the 
economy over the last 50 years and how much social programs have helped people get out of poverty 
as opposed to alleviating their poverty. Ultimately, one has to believe that education and access to 
opportunity is the cure-all, both growing the economy and creating opportunity. So then why are be 
cutting funding to education? Obviously Johnson's War on Poverty hasn't cured poverty but to suggest 
that it hasn't helped generations of Americans to prosper more than what they would have without 
these programs is a lie. And imagine what could have been if these programs had not been systematic 
gutted during the past three decades by supply-side economics agendas. 
In 2012, connecticutie posted her version of the GOP Rape Advisory Chart to help sort out all of 
the confusion about the wide variety of rape "flavors" that today's Republican Party seems so hell-bent 
on bringing to light. Many thought she did a fantastic job, but, given the latest entries into the 
"rainbow of rape flavors" yesterday and today by Richard Mourdock and John Comyn, I decided to 
create a revised version that plays it straight--I'm just including the actual quotes themselves. Feel free 
to repost on FB, TW or wherever you wish. It is now January 2014 and many of these attitudes really 
haven't changed, so without further ado, I present the updated Republican Party Rape Advisory 
Chart: 
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THIS WEEK's QUOTE 
In response to the government officials around New Jersey Governor Chris Christie who felt no 
reluctance or shame to create a four-day traffic jam that hurt tens of thousands of innocent drivers so 
that they could teach a public official from another political party a harsh lesson. 
In a serious day of high alert it didn't matter to them but they 
must be held accountable because no matter who's guilty or not 
we can't live in a nation where people are just collateral damage 
for political retribution. 
Rev. Al Sharpton 
BEST VIDEO OF THE WEEK 
Bruce Springsteen & Jimmy Fallon: "Gov. Christie 
Traffic Jam" Update 'Born To Run' To Parody 
Chris Christie's Bridgegate 
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Chris Christie, a noted fan of The Boss (when he isn't sleeping through his concerts), probably 
won't love this. Last night on "Late Night," Jimmy Fallon and his guest Bruce Springsteen 
donned '8os-era Springsteen attire to parody the seminal New Jersey anthem, "Born to Run." 
Except this time, the lyrics were devoted to the "bridge-gate" scandal surrounding Christie's 
apparently political closing of the George Washington Bridge, causing major traffic issues. This 
scandal has presented many unlikely things, but we didn't think Bruce growling "I really gotta take a 
leak!" over "Born to Run" would be one of them. (Read the lyrics below the video.) 
Web Link: 
Jimmy: 
In the day we sweat it out on the streets stuck in traffic on the GWB 
They shut down the tollbooths of glory because we didn't endorse Christie 
Sprung from cages on Highway 9 
We got three lanes closed, So Jersey get your ass in line 
Ooohhh, baby this Bridgegate was just pay back 
It's a bitch slap to the state Democrats 
We gotta get out but we can't, 
We're stuck in Governor Chris Christie's Fort Lee New Jersey traffic jam. 
(The real Springsteen walks out] 
Bruce: 
Governor, let me in, I wanna be your friend 
They'll be no partisan divisions 
Let me wrap my legs 'round your mighty rims 
And relieve your stressful conditions 
We've got Wall Street masters stuck cheek to cheek 
With blue-collar truckers, and man I really gotta take a leak 
But I can't 
I'm stuck in Governor Chris Christie's Fort Lee New Jersey traffic jam 
[Guitar solo] 
1, 2, 3, 4! 
Jimmy: 
Highways jammed with pissed off drivers with no place left to go 
And the press conference went on and on 
Bruce: 
It was longer than one of my own damn shows 
Jimmy: 
Some day Governor, I don't know when 
This will all end, but 'til then 
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Together: 
You're killin' the workin' man. 
Who's stuck in Governor Chris Christie's Fort Lee New Jersey traffic jam. 
Whoa whoa whoa! 
Whoa whoa whoa! 
Bruce: 
I gotta take a leak! I really gotta take a leak! 
Together: 
Down in Jersey land! 
GREAT VIDEO MONTAGE 
Web Link: 
THIS WEEK's MUSIC 
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As someone who first saw Bruce Springsteen play at Upstairs at Max's Kansas City and again 
when my friend Jae Mason opened for him on his first tour in Los Angeles but more importantly 
paying homage to "bridge-gate" this week I am feeling the music of one New Jersey's favorite sons 
Bruce Frederick Joseph Springsteen (born September 23, 1949) -- an American musician, singer-
songwriter and icon. He is best known for his work with the E Street Band. Nicknamed 'The Boss", 
Springsteen is widely known for his brand of poetic lyrics, Americana working class, sometimes 
political sentiments centered on his native New Jersey and his lengthy and energetic stage 
performances, with concerts from the 197os to the present decade running up to an uninterrupted 250 
minutes in length. Springsteen's recordings have included both commercially accessible rock albums 
and more sombre folk-oriented works. His most successful studio albums, Born in the U.S.A. and Born 
to Run, showcase a talent for finding grandeur in the struggles of daily American life; he has sold more 
than 64 million albums in the United States making him the fifteenth highest selling artist of all-time 
and more than 120 million albums worldwide. Springsteen has earned numerous awards for his work, 
including 20 Grammy Awards, two Golden Globes and an Academy Award as well as being inducted 
into the Rock and Roll Hall of Fame and the Songwriters Hall of Fame in 1999. Please enjoy The 
Boss' music and please don't get angry with me if I haven't included one of your favorites.... 
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Bruce Springsteen — Growing up (Max's Kansas City, NY 1972) -- httwayoutu.be/M7RTievro
Bruce Springsteen — Spirit in the Night -- humayoutu.be/xyil-wbom4 
Bruce Springsteen - Thunder Road -- http://youtu.be/eJ HiY7LDGo 
Bruce Springsteen - Rosalita 
httmayoutu.be/CwoOmgeWHo 
Bruce Splingsteen - Born To Run -- Impillyoutu.be1O2AvAvKlupu 
Bruce Splingsteen — The Promised Land -- httpsayaltu.behic610(P76slY 
Bruce Springsteen - Racing In The Street -- http://youtu.be/bxKka.Q.11Q
Bruce Springsteen - Candy's Room - httpsavoutu.be/Pku NPaWlY8 
Bruce Springsteen — She's The One — http±putule/Koogyzifunm
Bruce Springsteen - WHO DO YOU LOVE/ SHES THE ONE - 
yYM1Ws
Bruce Splingsteen - AU That Heaven Will Allow - http:IlyoututeawBoYin2Ww 
Bruce Springsteen - Dancing in the dark - httpilivoutu.belstkoumthxqY
Bruce Springsteen - Born In The U.S.A. — httpillyoutube/IM4ezDbbu4
Bruce Springsteen - Glory Days - haplayoutue 6,,gm 9) Riym 
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Bruce Springsteen - Jungleland - littpithoutu.bettGunnucon 
Paul McCartney & Bruce Springsteen — I Saw Her Standing There — httpsavoutu.beilummitmQr48g
Saying Goodbye to Clarence Clemons "The Big Man"- NBC Nightly News -- humayoutube/456baihics 
I hope that you have enjoyed this week's offerings and wish 
you a great Martin Luther King Day and a wonderful 
week 
Sincerely, 
Greg Brown 
Gregory Brawn 
Chairman & CEO 
fibhai( as, P3IIIICIS. LLr 
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