Fact Check: Obama's claim of benefit cuts suspect

WASHINGTON – Medicare has become a new focal point in the presidential campaign, with Democratic nominee Barack Obama accusing Republican John McCain of seeking "cuts in benefits, eligibility, or both."

Elderly voters are sure to take notice of such statements being made in a 30-second television ad that the Obama campaign will air in some crucial swing states. Obama hit the same theme in a campaign appearance Friday in Virginia.

But Obama's charge is built on a shaky foundation. The campaign's evidence that McCain would make such cuts relies on a Wall Street Journal article where no specific cuts were mentioned.

In what little detail McCain discusses Medicaid and Medicare on his campaign Web site, he makes no mention of cutting benefits. He says this about the two health programs, the first for the poor, the second for the elderly and disabled: "We must reform the payment systems in Medicaid and Medicare to compensate providers for diagnosis, prevention and care coordination. Medicaid and Medicare should not pay for preventable medical errors or mismanagement."

McCain wants to provide tax credits to encourage Americans to purchase private health insurance. To pay for it, he has proposed requiring workers to pay income taxes on the health benefits they now receive tax-free from their employers. The Tax Policy Center has projected that the change would actually be a tax cut for most people and would reduce federal revenues by an estimated $1.3 trillion over 10 years.

McCain's campaign has said the goal is for the program to be revenue-neutral, so he would find savings through Medicare and Medicaid.

And that's where the allegation about benefit and eligibility cuts comes into play. Obama's ad cites a Wall Street Journal article from Oct. 6 that began: "John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said." That very day, Democratic lawmakers and the advocacy group "Americans United for Change" held an "emergency press conference call" to react to McCain's health care proposal "that would gut Medicare and Medicaid by $1.3 trillion."

But McCain's focus on Medicare has been on overhauling the way it pays providers. McCain has taken up the mantra that the government's payments should be based more on the quality of care that patients get rather than on quantity, which is how the current fee-for-service-system operates. An advisory commission to Congress, the Medicare Payment Advisory Commission, has long recommended that paying providers based on quality "is an important first step towards purchasing the best care for beneficiaries and assuring the future of the program."

In comparing the two candidates' health care plans, the Kaiser Family Foundation, which conducts health research, also makes no mention of McCain calling for benefit cuts to reduce Medicare costs. It does say that he would support the establishment of a commission to make recommendations on how to sustain the program for the future.

McCain's economic policy adviser, Douglas Holtz-Eakin, said in an interview this week that allegations McCain would cut Medicare benefits are "just false."

"There are many opportunities to deliver the same benefits in Medicare for lower costs and thus take pressure off premiums for the beneficiaries," Holtz-Eakin said. "That's a very different thing than the idea you would be cutting Medicare."

In the end, the Medicare program faces a difficult future with promised benefits far exceeding the program's projected revenue. Both candidates have been very careful to leave hard decisions about Medicare's future solvency for another day. Ap

Basic forms of ownership

A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to consumers. A business needs a market. A consumer is an essential part of a business. Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit to increase the wealth of owners. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Notable exceptions include cooperative businesses and state-owned enterprises. Socialistic systems involve either government, public, or worker ownership of most sizable businesses.

The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate.

Business Studies, the study of the management of individuals to maintain collective productivity in order to accomplish particular creative and productive goals (usually to generate profit), is taught as an academic subject in many schools.
Contents


* 1 Basic forms of ownership
* 2 Classifications
* 3 Organization
* 4 Management
* 5 Government regulation
o 5.1 Organizing a business
o 5.2 Commercial law
o 5.3 Capital
o 5.4 Intellectual property
o 5.5 Exit plans
* 6 See also
* 7 External links
* 8 Notes and references

Basic forms of ownership

Although forms of business ownership vary by jurisdiction, there are several common forms:

* Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business.

* Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.

* Corporation: A business corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff.

* Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.

For a country-by-country listing of legally recognized business forms, see Types of business entity.

Classifications
Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business.[citation needed]

There are many types of businesses, and, as a result, businesses are classified in many ways. One of the most common focuses on the primary profit-generating activities of a business:

* Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers.
* Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses or consumers. Organizations ranging from house decorators to consulting firms to restaurants and even to entertainers are types of service businesses.
* Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers. See also: Franchising
* Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals.
* Financial businesses include banks and other companies that generate profit through investment and management of capital.
* Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies.
* Utilities produce public services, such as heat, electricity, or sewage treatment, and are usually government chartered.
* Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
* Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs

There are many other divisions and subdivisions of businesses. The authoritative list of business types for North America is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the NACE.

Organization
This section does not cite any references or sources.
Please help improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed. (March 2008)
Advertisement of Victoria's Secret. Advertisement is an important aspect of business.


Most businesses must accomplish similar functions regardless of size, legal structure or industry. These functions are often organized into departments. Common departments include (but are not limited to):

Human Resources
Typically responsible for hiring, firing, payroll, benefits, etc.
Finance
responsible for managing the enterprises financial resources[1]

Budgeting and forecasting
planning how the enterprise wants things to happen
Cash and treasury management
ensuring the enterprise has money when it's needed
Accounts payable and receivable
ensuring the enterprise receives what it's owed and pay what it owes
Tax planning/filing and reporting
meeting obligations to the government
Risk management
ensuring the enterprise doesn't get surprised by something unfavorable
External and internal (management) reporting
providing visibility into the enterprise for those who need it through financial reporting and other types of reporting

Marketing and sales
responsible for selling the business' goods or services to the customer and for managing the relationships with the customer

Marketing
Typically responsible for promoting interest in, and generating demand for, the business' products or services, and positioning them within the market
Sales
finding likely purchasers and obtaining their agreement (known as a contract) to buy the business' products or services

Operations makes the product or delivers the service

Production produces the raw materials into the delivered goods, if they require processing
Customer service
supports customers who need help with the goods or services

Procurement responsible for acquiring the goods and services necessary for the business. Sometimes organized as:

Strategic sourcing determines the business' needs and plans for acquiring the necessary raw materials and services for the business
Purchasing processes the purchase orders and related transactions

Research and Development tests to create new products and to determine their viability (e.g. pilot plants) Information Technology manages the business' computer and data assets
Communications/Public Relations responsible for communicating to the outside world

Administration provides administrative support to the other departments (such as typing, filing, etc.)Internal Audit
an independent control function typically accountable to the Board of Directors for reporting on the proper functioning of the other departments

Management is sometimes listed as a "department" but typically refers to the top level of leadership within the business regardless of their functional role.

Dow industrials fall 679 for 6th triple-digit loss in a row

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NEW YORK - A runaway train of a sell-off turned the anniversary of the stock market peak into one of the worst days in Wall Street history Thursday, driving the Dow Jones industrials down a breathtaking 679 points and deepening a financial crisis that has defied all efforts to stop it.

Stocks lost more than 7 percent, $872 billion of investments evaporated, and the Dow fell to 8,579. When the average crashed through the 9,000 level for the first time in five years in the final hour of trading, sellers had only begun to hit the gas pedal.

As bad as the day was, even worse was the cumulative effect of a historic run of declines: The Dow suffered a triple-digit loss for the sixth day in a row, a first, and the average dropped for the seventh day in a row, a losing streak not seen since 2002.

"Right now the market is just panicked," said David Wyss, chief economist at Standard & Poor's in New York. "Nobody wants to take on any risk. Everybody just wants to get their money and put it under the mattress."

It all took place one year to the day after the Dow closed at its record high of 14,164. Since that day, frozen credit, record foreclosures, cascading job losses and outright fear have seized the market and sapped 39 percent of its value.

Paper losses for the year add up to an staggering $8.3 trillion, according to preliminary figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies representing almost all stocks traded in America.

It was the second straight day that Wall Street was rocked by a final-hour sell-off, but this one was particularly shocking.

Most of the day was relatively calm, and the trading floor was quieter than usual because of the Jewish holiday of Yom Kippur. Wall Street awoke to news the federal government was brandishing a new weapon against the financial crisis — considering seeking an equity stake in major U.S. banks in order to stabilize them.

But that step appeared to be as ineffectual as the others Washington has rolled out in recent weeks, including a $700 billion bailout of the financial industry, a coordinated interest rate cut by central banks around the world and direct lending by the Federal Reserve to private companies to provide them with short-term cash.

Acquiring a stake in the banks would be yet another startling intervention by the government in the free market, but economists said President Bush was left with little choice because of the credit markets, where tight lending has choked off the everyday cash that is the lifeblood of the economy.

"In normal times, this would be out of the question, but in the present dire situation, I think the government should be employing all the powers that it can," said Sung Won Sohn, an economics professor at California State University, Channel Islands.

Wall Street has been teetering on the brink of panic for a month now, vulnerable to any bad news. Thursday's sell-off was triggered when a major credit rating agency put General Motors Corp. and its finance affiliate under review to determine whether it should be downgraded.

Stock in GM, one of the 30 components of the Dow Jones industrials, lost 31 percent of its value and closed at $4.76 — its lowest in more than half a century, since the Korean War began.

For the Dow, it has been nothing short of a free fall:

_The average is down 2,338 points, or 21 percent, in the last four weeks, since the Lehman Brothers bankruptcy escalated a long-running credit crunch into a full-fledged crisis.

_The point decline Thursday was the third-worst in Dow history. The worst, 778 points, came less than two weeks ago.

_Of the last 19 trading days, there have been 11 triple-digit losses — including the unprecedented six straight. The six gains have all been triple-digits, and only one of them was enough to make up the losses of the day before.

_The Dow now stands only about 1,300 points above its lowest close of the bear market that followed 9/11. In a market as volatile as this, that gap can be closed in a couple of trading days, or less.

In fact, triple-digit declines can happen almost in an instant.

On Thursday, the Dow was above 9,200 after 1:30 p.m. and still above 9,000 after 3 p.m. The pressure to sell was so intense that the Dow kept dropping precipitously for 10 minutes after the 4 p.m. closing bell as the day's losses were tabulated.

In percentage terms, the drop in the Dow exceeded the day the markets reopened after the Sept. 11, 2001, terrorist attacks. It was not close to the 22.6-percent decline on Black Monday in 1987, the last stock market crash.

Still, it is becoming increasingly clear that Washington has ever fewer places to reach in its toolbox to stop, or perhaps even slow, the crisis. Among the options still left are buying up foreclosed properties and making direct loans to homeowners, both of them hard for free-market supporters to swallow.

Speaking in the afternoon before the market closed, President Bush told an audience on the South Lawn of the White House that the economy was going through a "very touch stretch." But, he said: "I'm confident in our economy's long-term prospects."

After the market closed, the White House said Americans should remain confident despite the market plunge, and President Bush planned to speak from the Rose Garden on Friday morning — though he was not expected to unveil any new policy proposals.

"The Treasury Department is moving quickly to use new tools to improve liquidity, which is the root cause of this problem," White House press secretary Dana Perino said. "Americans should be confident that every effort is being taken to stabilize our markets."

The broader stock indicators registered similar declines to the Dow's. The Standard & Poor's 500 index fell 7.6 percent to the 909 level, and the Nasdaq composite index fell 5.5 percent to 1,645.

Meanwhile, the credit markets remained stubbornly locked-up. The benchmark rate that banks charge each other for loans, known as Libor, rose to 4.75 percent from 4.52 percent a day earlier, signaling banks are still afraid to make loans because they worry they won't be paid back.

"The story is getting to be like that movie Groundhog Day," said Arthur Hogan, chief market analyst at Jefferies & Co. "Everything we're seeing is historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It's not the kind of history you want to be making."

Adding to Wall Street's nervousness, a ban on short selling — a process in which investors borrow shares of stock and essentially bet the value will fall — expired.

With three and a half weeks before voters elect Bush's successor, there was also no immediate comment on the Wall Street action from the presidential candidates, Democratic Sen. Barack Obama and Republican Sen. John McCain.

Earlier in the day in Dayton, Ohio, Obama took aim at McCain's plan to have the government absorb the full cost of renegotiating mortgages for borrowers under strain from the dramatic decline of the values of their homes.

McCain rolled out the idea at the second presidential debate earlier this week, a forum in which he also told voters it was important to have a steady hand in the White House during a time of economic crisis. - source

10,000 Chinese children still sick from milk

By GILLIAN WONG, Associated Press Writer 15 minutes ago

BEIJING - More than 10,000 children remained hospitalized after being sickened in China's tainted milk scandal, eight of whom were in serious condition, officials said.
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The Health Ministry said in a statement on its Web site Wednesday that 10,666 children were in hospitals after drinking milk powder contaminated with the industrial chemical melamine, which can lead to kidney stones and possibly life-threatening kidney failure.

No new deaths have been recorded, it said. The scandal has so far been blamed for the deaths of four babies and the sickening of about 54,000 others in China.

But the effects of the scandal continue to be felt, forcing the government to deal with festering health and public relations issues. China's food exports have increasingly suffered, with more nations issuing import bans.

Singapore's food safety agency said Thursday it found traces of melamine in three more Chinese-made products. The authority said the chemical was detected in samples of blueberry and chocolate flavored Cadbury Choclairs and Panda Dairy-brand Whole Milk Powder imported from China.

Also on Thursday, Hong Kong's Centre for Food Safety said in a statement it found melamine in EDO Pack Almond Cacao Biscuit Sticks produced by Hong Kong company EDO Trading Co.

Philippine Health Secretary Francisco Duque III said at a meeting of health ministers from the Association of Southeast Asian Nations in Manila that member nations should strengthen regulations to shield people from potentially harmful imports.

Dairy suppliers have been accused of adding melamine — used in products including plastics, paint and adhesives — to watered-down milk to make the product appear rich in protein and fool quality control tests.

There had been no standards for the amount of the chemical allowed in food products.

Under Health Ministry guidelines released Wednesday, melamine is now limited to one part per million for infant formula and 2.5 parts per million for liquid milk, milk powder and food products that contain more than 15 percent milk.

Wang Xuening, a ministry official, acknowledged that small amounts of melamine can leech from the environment and packaging into milk and other foods, but said deliberate tainting was forbidden.

Levels of melamine discovered in batches of milk powder recently registered as much as 6,196 parts per million.

In the U.S., the Food and Drug Administration says its experts have concluded that eating 2.5 parts per million of melamine — a minuscule amount — would not raise health risks, even if a person ate food every day that contained it.

Guidelines in Hong Kong and New Zealand say melamine in food products is considered safe at 2.5 parts per million or less, though Hong Kong has lowered the level for children under 3 and pregnant or lactating women to one part per million.

China's food exports have suffered significantly from the scandal, with more than 30 countries restricting Chinese dairy products, and in some cases all Chinese food exports.

The Finance Ministry said Thursday the government has allocated $44 million to help dairy farmers who have been hurt by declining demand for milk. Many farmers have been tossing out raw milk as they are squeezed by feed costs they cannot recoup.

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Associated Press writer Jim Gomez in Manila, Philippines, and Alex Kennedy in Singapore contributed to this report. source

For bailout to work, housing market needs to mend

NEW YORK - Washington's financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right?
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Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it's safe to start doling out money again.

The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit. That means it will take several months or longer to pare down the glut of houses built when times were good — and those that have come on the market because of soaring foreclosures — before home prices start appreciating.

Housing is a critical component to the U.S. economy and by extension the availability of credit. Roughly one in eight U.S. jobs depends on housing directly or indirectly — from construction workers to bank loan officers to big brokers on Wall Street. A turnaround in housing prices would boost confidence in the wider economy and, experts hope, goad banks into lending again.

"Housing traditionally does lead the economy through a recovery. I think it's going to be critical for a sustained recovery in this cycle, too," said Gary Thayer, senior economist at Wachovia Securities.

In the meantime, people like Alicia Elliott are adjusting to a new American reality: Life without credit.

The 21-year old Morgantown, W. Va., resident just bought a used mobile home, borrowing $4,000 from friends and family because she couldn't get a bank loan.

"I tried to. Couldn't do it. It's just hard to get a loan," said Elliott, who works as a cashier at a Lowe's Cos. store.

She used to get bombarded with offers for credit cards. Now she can't even get one. "I get denied one after another after another. It doesn't matter if you have a co-signer or not," she said.

Trey Simmons, a 31-year-old barber at a Dallas hair salon, said he worries tighter lending standard will squash his goal of buying a home next year.

"Credit is a privilege everybody can't get," Simmons said. "I had credit at a young age and messed up."

He now operates on a strictly cash basis. "If I don't have it," he said, referring to cash, "I don't spend it."

The dilemma boils down to a matter of trust.

"Credit, by definition, means trust and faith, and for many reasons trust and faith have been damaged," said Sung Won Sohn, an economics professor at California State University, Channel Islands.

Sohn said the near certainty of a recession makes it too risky for the thousands of small and medium-sized banks across the country to lend to people like Elliot.

"Banks know the economy is getting worse, so ... they will keep being cautious," said Sohn, a former banking executive.

Still, the government hopes that by scooping up billions of dollars in bad mortgage debt and other toxic assets, banks eventually can clean up their shaky balance sheets, crack open the vaults and send money washing through the system again.

The rescue plan also raises the federally insured deposit limit from $100,000 to $250,000, a move that could boost banks' reserves and further grease the lending wheels.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and a key negotiator over the past weeks, said the measure was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort comparable to the New Deal.

In the meantime, the Treasury Department is moving swiftly to get the plan started. Treasury Secretary Henry Paulson said Friday he did not wait for final approval of the measure to begin preparation. He has been lining up outside advisers as his staff works out details on a multitude of complex issues.

But several hurdles could trip up the plan. For starters, even when the Treasury starts buying bad assets, some banks may hoard the cash they receive in return until they see how the plan pans out. That has the potential to make the lending logjam worse, said Vincent R. Reinhart, former director of the Federal Reserve's monetary affairs division.

"They may sit on the sidelines and wait to see (the bailout) get some traction. The problem is if everybody sits on the sidelines, nobody gets in the game. It's a risk," he said.

It also creates a vicious cycle: No trust means no lending; tight credit means it's harder to buy a home; the more difficult it is to buy or sell a home, the further home prices will fall; and the further prices drop, the more foreclosures there will be.

U.S. home prices — down 20 percent from their peak in July 2006 — still have further to fall, and must hit bottom before demand picks up. The long-awaited bottom in prices could be a year or more away.

But Jim Gillespie, chief executive of Coldwell Banker Real Estate, said he hopes that lower prices, combined with the government's actions will jump-start stagnant demand. The federal bailout plan, he said, "will give people reassurance that mortgage money is available."

Jobs are another big concern. The stranglehold on credit has choked companies big and small that depend on regular inflows of borrowed money to pay employees and stay afloat.

The Labor Department said Friday that employers cut 159,000 jobs in September, the fastest pace of losses in more than five years. Experts say that number will grow as the effects of the credit gridlock course through the economy in coming days and weeks.

The nation's unemployment rate is now 6.1 percent, up from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million.

The unemployment rate could rise to as high as 7.5 percent by late 2009, economists predict. If that happens, it would mark the highest since after the 1990-91 recession.

Boosting employment is critical to kick-starting lending because "if jobs are growing, then incomes are a growing, and if incomes are growing then people are consuming," Reinhart said.

Consumers and businesses have retrenched so much that some analysts fear the economy stalled or shrank in the third quarter that ended last week. The Labor Department report Friday showed wage growth for workers is slowing, meaning they'll be more hard-pressed to spend, especially for something as expensive as a home.

Many economists predict the economy will contract in the final quarter of 2008 and the first quarter of next year. That would meet the classic definition of a recession — two consecutive quarters of a shrinking economy.

One bright spot: optimism hasn't been totally squashed yet.

Morgan Cavanaugh, proprietor of Moriarty's Pub in downtown Cleveland, has been trying to sell another bar he owns to ease his workload, but the prospective buyer hasn't been able to raise the money.

Now that the bailout legislation has the green light, he's hopeful he'll get a deal done.

"It passed. Let's work something out," Cavanaugh told the man over a cell phone Friday just after the House approved the plan.

He flipped the phone shut and smiled from behind the weathered mahogany bar of his 75-year-old Irish pub.

"He's going to put the loan request in again. It's looking up," Cavanaugh said. source