One Stop Market

It’s pretty well accepted that capitalism is the most functional economic idea man has ever had and enacted upon, so we don’t have to go back and question capitalism on the whole as an economic system as our newest president elect would desire.  However, there are aspects of it’s ways that (as in any economic system) cripple the poor and make a few people extremely rich — the people that devote their time to figuring out how the system works and then putting all they have into manipulating it for their own gain.

Sometimes this involves stealing, but it never has to involve stealing.  Like Warren Buffet you can just study hard, read up on the right economic thinkers, and move to Omaha, Nebraska — the financial hub of the world (not).  But there is the possibility that you can “figure it out.”  That’s a very capitalistic idea.  In any other system you can easily label that “selfish” and even “illegal” to manipulate the system.  Here in the good old U.S. of A. it’s known as being really smart and savvy but that’s because there aren’t that many rules that can hold you back from “figuring it out.”  But there could be, and that’s what the regulators and those in power for regulation are working at this very moment. 

In a way, regulation takes all the fun and hope out of capitalism and makes democracy seem less cool.  Eventually, with enough regulation you end up with socialism (which would be the new Senate and Obama’s dream come true) and socialism is not capitalism.  In that case, I’m heading to Canada.  I don’t want to be rich but I am an entrepreneur and I do think capitalism is the only place where the term “entrepreneur” makes any sense. 

But let’s point out some ironies before we continue loving on capitalism.  First, the essence of capitalism lies in a big, fat gamble on yourself, the future, and your ability to adapt to whatever the future throws your way (such as an economic crisis).  The bank signs a few papers and you have a house that you’ll need to work and produce and profit year in and year out for the next 30 years to pay for, but you’ll pay for it twice over since the bank charges interest and the system supports itself from there.  However, gambling is illegal in Massachusetts.  Yet, I did take a trip to Suffolk Downs last weekend where you can bet (gamble) on a horse race or two. 

I gambled by going college.  I threw $100K on the table (that’s what it cost for a 4-year educated back in those days believe it or not) hoping that when I came out in four years the economy would be in a place that would value my education and therefore I could get a job that would earn enough money to pay back the loan and more! 

I will gamble when I purchase a home.  This is more obvious but if the market tanks, I can lose more money than my house is worth and my loan becomes stupid and I easily fall into negative equity (which is why people in this situation have no problem foreclosing).  I literally walk out of my house every day and bet that I’m not going to get fired or hit someone while driving or lose my wallet or be taken advantage of by the government.  

Shall we keep placing our bets?  I guess so unless you have any better ideas. 

A week after the GOP’s worst electoral loss in decades, Republican governors are gathering in Miami this week for some serious soul-searching. Not only did Barack Obama rewrite the electoral map; congressional Democrats picked up more than 20 house seats in their second straight election — a feat not accomplished since 1930s.

So, if ever a gathering needed a Pollyanna, this week’s meeting of the Republican Governors Association was it. And it was a role filled by Mississippi Gov. Haley Barbour.

“I have looked down in the grave for the Republican Party, and this ain’t it,” he said.

Barbour recalled the post-Watergate era when at one point during the 1976 campaign, the sitting president, Gerald Ford trailed Democrat Jimmy Carter by 32 points.

“I have seen a lot worse, folks,” Barbour said. “I can remember when Mary Louise Smith, the party chairman, literally appointed a committee about whether we should change the name of the party.”

Within the Republican Party, governors have more reason to be happy than most. No sitting Republican governors were defeated on Election Day.

Some Republican governors, like Indiana’s Mitch Daniels and Utah’s Jon Huntsman won by wide margins. And it’s among governors that Republicans see some rising stars-people like Louisiana’s Bobby Jindal.

At the conference in downtown Miami Wednesday, two main narratives emerged to explain the party’s problems. Jindal picked up one of the story lines — that the party has strayed from its principles.

“When the Republican Party is no longer the party of fiscal conservatism, when we start defending spending that we would have rightfully criticized on the other side — whether it’s earmarks or growth in discretionary spending or new programs that we never would have tolerated if the other side had proposed it — then clearly, I would argue that we’ve lost our way, we’ve lost the reason that we stand as fiscal conservatives.”

By getting back to basics — cutting taxes and spending and innovating in areas like education and health care — Jindal and other pragmatists say the party can rebuild its brand and restore voter trust.

But there’s another school of thought — that the GOP is staring into the abyss. It has to do with technology and demographics.

In a presentation to the governors, Republican consultant and pollster Frank Luntz laid out some stark facts. John McCain won just 32 percent of the youth vote — the lowest margin in history, according to Luntz.

Young people increasingly communicate and get their information over the internet. The Obama campaign understood that and compiled a list of 10 million names and e-mail addresses.

“It makes him and his supporters the most powerful special interest group in all of America,” Luntz said of the president-elect. “And 3 million of those people have donated to the campaign. We’ve never had that situation where so many people are so active and so engaged, and they can be reached by the stroke of a key.”

Luntz later added, “our candidate doesn’t know how to use” a BlackBerry.

That paradigm shift is the narrative Utah Gov. Jon Huntsman says Republicans must embrace. Otherwise, he says, a party that has trouble reaching Hispanics, women, and African-Americans is doomed to permanent minority status.

“And if we’re not able to identify the changing demographic in this country and the needs of that changing demographic in terms of the issues that really matter — education and health care and quality of life and jobs — then we’re going to lose and we’re going to keep losing big time,” Huntsman said.

Minnesota Gov. Tim Pawlenty agreed that the party’s base conservative voters are important, but no longer enough. The challenge, he said, is to modernize the party of Ronald Reagan.

“He’s one of my heroes,” Pawlenty said. “But Ronald Reagan was president a long time ago. A lot’s happened since then. So the challenge for us is, how do you take those principles from the late ’70s and ’80s and apply them to the circumstances and issue and opportunities of our time.”

Nov. 12 (Bloomberg) — General Motors Corp. rose in New York trading after House Speaker Nancy Pelosi urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail.

In calling for an emergency aid plan, Pelosi rejected calls to let GM collapse and sided with the largest U.S. automaker and its allies in trying to prevent a “devastating” domino effect that would cost millions of jobs.

“Trying to reorganize the auto industry in bankruptcy would be as close to reorganizing the whole U.S. economy as you could get,” said Alan Gover, a bankruptcy lawyer with White & Case LLP in New York. “The vast supply chain involves thousands of businesses, millions of existing jobs and just as many retirees, as well as whole communities and states.”

Passage of an industry bailout plan may keep GM from running out of operating cash by year’s end, which it says may happen without U.S. help. GM is the second-biggest provider of private health-care benefits and was the third-biggest advertiser in this year’s first half.

“It’s truly one of those companies that’s too big to fail, and everybody understands that,” said Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts. “If it does collapse, it could make the recession deeper and longer.”

Recession Fallout

Behravesh said a GM bankruptcy could send the U.S. jobless rate as high as 9.5 percent, up from a 14-year high of 6.5 percent in October, and produce a recession comparable in length to that of 1980-82.

Ford Motor Co. and Chrysler LLC both likely would be forced into bankruptcy eventually if GM were to fail, Mark Oline, a Fitch Inc. credit analyst, said in an interview.

GM climbed 32 cents, or 11 percent, to $3.24 at 9:40 a.m. in New York Stock Exchange composite trading. The shares tumbled to a 65-year low yesterday, extending a slide that chopped their value almost in half in the past week.

GM’s 8.375 percent bond due in July 2033 fell 2.75 cents to 23 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bond yielded 36 percent.

GM, Ford and Chrysler want $50 billion in loans to boost liquidity and cover union retirees’ medical costs, people familiar with the matter have said. That would be on top of $25 billion in low-interest borrowing Congress approved in September to help retool plants to build more-efficient vehicles.

The trio employs 240,000 people in the U.S., or about 70 percent of U.S. auto workers, according to the Automotive Trade Policy Council in Washington, the industry group for the U.S. companies. Health insurance for 2 million people is tied to auto workers’ jobs.

Job Losses

Another 5 million jobs at dealerships, suppliers and service providers are supported by the automakers, the council estimated. The companies spent $156 billion on auto parts in the U.S. in 2007.

Job losses would total 2.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 study by the Center for Automotive Research in Ann Arbor, Michigan.

Those disruptions would cost $125.1 billion in lost personal income in the first year, and $275.7 billion over three years, the study concluded. The “unimaginable consequence” of a bankruptcy “motivates us to really come up with cash in every way possible,” GM Chief Executive Officer Rick Wagoner said in a Nov. 7 Bloomberg Television interview.

`Devastating Impact’

While Pelosi, a California Democrat, didn’t cite GM by name in her statement yesterday, she said an automaker collapse would have a “devastating impact on our economy, particularly on the men and women who work in that industry.”

She didn’t specify the size or the rules for the aid package she is seeking for the industry, whose 2008 U.S. sales are headed toward a 17-year low. That slump is overwhelming cost-cutting efforts including elimination of 46,000 U.S. jobs at GM since 2004, when the company last posted an annual profit.

President George W. Bush hasn’t said whether he supports more automaker aid. The administration is awaiting details of Pelosi’s plan before responding, White House spokesman Tony Fratto said. President-elect Barack Obama talked with Bush on Nov. 10 about the urgency for an assistance package.

Treasury Secretary Henry Paulson has resisted a proposal by Pelosi and Senate Majority Leader Harry Reid to tap the $700 billion bank-rescue fund to help automakers, and investors including New York-based hedge-fund manager Bill Ackman have said GM should reorganize in bankruptcy, not receive a bailout.

“Let the company default, maybe manage the process a little,” said Martin Fridson, chief executive officer of investment firm Fridson Investment Advisors in New York. “There’s no reason for taxpayer dollars.”

`Textbook’ Versus Reality

Such an approach is too risky, said Gary Hindes, managing director of distressed investments at Deltec Asset Management in New York. His firm doesn’t own GM bonds.

“With all due respect to the free-market, or moral-hazard types out there, it’s all wonderful in a textbook,” Hindes said. “But in a real world this would be disastrous.”

A GM failure would ravage an auto-supply base battered by bankruptcies or companies nearing failure, said Maryann Keller, an automotive consultant in Greenwich, Connecticut.

Delphi Corp., GM’s largest supplier and former parts unit, has been in court protection since 2005. Automakers and suppliers cut 140,000 jobs in the past 12 months, according to the U.S. Labor Department.

`Nobody’s Healthy’

“At the current level of production nobody’s healthy, nobody’s making money, and many are running out of working capital just like GM,” Keller said.

Suppliers such as American Axle Manufacturing Holdings Inc. and Lear Corp. would suffer the most in a failure at GM, because it’s their largest customer. They also make parts for automakers including Ford, Chrysler and Japan’s Toyota Motor Corp.

“We’re worried. We’re concerned about it,” said Mike Goss, a spokesman for Toyota’s North American manufacturing unit in Erlanger, Kentucky. “The vehicles we build in North America use about 75 percent local content, and much of that is coming from the same companies that supply the Detroit Three.”

WASILLA, Alaska (AP) — Alaska Gov. Sarah Palin says she wouldn’t hesitate to run for the presidency in four years if it’s God’s will, even though she never thought Campaign 2008 would be “as brutal a ride as it turned out to be.”

In a series of interviews in the wake of last Tuesday’s elections, Palin said she had no problem with Republican presidential nominee John McCain, but that she resents rumors she said were spread about her and her family by the Arizona Republican’s aides. She emphatically denied that she was a drag on the GOP ticket.

“I think the economic collapse had a heckuva lot more to do with the campaign’s collapse than me personally,” the governor said in an interview broadcast Tuesday on NBC’s “Today” show.

Palin also said “There were a lot of times I wanted to shout out, ‘Hey, wait a minute, it’s not true.’ It’s pretty brutal.”

Nevertheless, the relatively obscure governor of Alaska, whose selection for the ticket by McCain last August brought excitement — and controversy — to the 2008 campaign, said she would be eager to do it all again under the right circumstances.

“I’m like, OK, God, if there is an open door for me somewhere, this is what I always pray, I’m like, don’t let me miss the open door,” Palin said in an interview with Fox News on Monday. “And if there is an open door in ‘12 or four years later, and if it is something that is going to be good for my family, for my state, for my nation, an opportunity for me, then I’ll plow through that door.”

In the wide-ranging interview, Palin said she neither wanted nor asked for the $150,000-plus wardrobe the Republican Party bankrolled, and thought the issue was an odd one at the end of the campaign, considering “what is going on in the world today.”

“I did not order the clothes. Did not ask for the clothes,” Palin said. “I would have been happy to have worn my own clothes from Day One. But that is kind of an odd issue, an odd campaign issue as things were wrapping up there as to who ordered what and who demanded what.”

“It’s amazing that we did as well as we did,” the governor said of the election in a separate interview with the Anchorage Daily News.

“I think the Republican ticket represented too much of the status quo, too much of what had gone on in these last eight years, that Americans were kind of shaking their heads like going, wait a minute, how did we run up a $10 trillion debt in a Republican administration? How have there been blunders with war strategy under a Republican administration? If we’re talking change, we want to get far away from what it was that the present administration represented and that is to a great degree what the Republican Party at the time had been representing,” Palin said in a story published Sunday.

Palin has scheduled a series of national interviews this week with Fox, NBC’s “Today” show and CNN. She also plans to attend the Republican Governors Association conference in Florida this week.

Palin has been mentioned as a possible presidential candidate in 2012. She also could seek re-election in 2010 or challenge Sen. Lisa Murkowski. Still uncertain is the fate of Sen. Ted Stevens, who is leading in his bid for another term but could be ousted by the Senate for his conviction on seven felony counts of failing to report more than $250,000 in gifts, mostly renovations on his home. If Stevens loses his seat, Palin could run for it in a special election.

Palin and McCain’s campaign faced a storm of criticism over the tens of thousands of dollars spent at such high-end stores as Saks Fifth Avenue and Neiman Marcus to dress the nominee. Republican National Committee lawyers are still trying to determine exactly what clothing was bought for Palin, what was returned and what has become of the rest.

WASHINGTON — President-elect Barack Obama and his wife, Michelle, flew to Washington on Monday to be welcomed at the White House by the current occupant, President George W. Bush, a man with whom he expressed a sea of differences during the just-ended election campaign.

After Mr. Bush and the first lady, Laura Bush, give the Obamas a tour of the White House, Mr. Bush and Mr. Obama are expected to split off for about 90 minutes of formal talks concerning the transfer of power from Mr. Bush’s conservative Republican administration to a presumably much more liberal Democratic leadership.

Mr. Obama will be seeing the Oval Office in person for the first time, a spokesman for him said, just 10 weeks before he will make history by returning as its first black occupant.

As the capital swirled with talk of an expanded bailout package for the troubled American International Group, of unemployment figures that continue to swell, of deep trouble in the auto industry and the urgent financial summit to be convened later this week by Mr. Bush, some of the more pressing issues awaiting discussion by the two leaders on Monday afternoon seemed clear. Similarly, two wars — on which the president and president-elect differ considerably — will demand careful and delicate coordination.

Mr. Obama has said he expects a “substantive conversation” with the outgoing president. Such first meetings are governed by no rules but are deeply immersed in tradition. Neither man was expected to issue any extended statement after the meeting, which is taking place unusually early in the transition.

Unless that changes, viewers will have to be satisfied with the images of the Obamas arriving at the White House for the first time after the election.

Josh Bolten, the president’s chief of staff, said that the president and president-elect will be alone in the Oval Office when they meet, without aides present.

“I’m sure each of them will have a list of issues to go down,” Mr. Bolten said during a televised interview with reporters from The Associated Press and The Washington Post. “But I think that’s something very personal to both of them. I know the president will want to convey to President-elect Obama his sense of how to deal with some of the most important issues of the day. But exactly how he does that, I don’t know, and I don’t think anybody will know.”

Mr. Bush and Mr. Obama have had relatively little personal contact before now, and by some accounts, when they have met, there has been some awkwardness.

Mr. Bush told a friend during the 2008 Democratic primary race that he thought Senator Hillary Rodham Clinton of New York was “more experienced and more ready to be president.” But the same friend, speaking anonymously to disclose his private conversation with the president, called Mr. Bush “a realist” who was ready to move on in the nation’s interest; Mr. Bush’s postelection comments have so far been gracious and have emphasized a cooperative approach.

For his part, Mr. Obama and his aides have missed no opportunity to remind Americans that they have only one president at a time.

Even so, Mr. Obama and his team are moving expeditiously to plan the transition and a post-Inauguration agenda that aides said would probably include the quick reversal of some Bush policies, such as his restrictions on stem-cell research and on oil and gas drilling.

One thing is certain: The body language between the Obamas and the Bushes will be widely scrutinized and assessed, to see whether they appear to be comfortable working together or, as was the case with some past transition meetings, are straining just to appear polite.

Having had a chance to size up their new accommodations, and those who have occupied them for eight years, the Obamas are scheduled to return immediately afterward to Chicago, where the work of transition will continue.

A spokeswoman for the transition team, Stephanie Cutter, told Reuters today in Chicago that Mr. Obama would announce no Cabinet nominees this week.

Tuning in to election returns on Tuesday night, California’s gay and lesbian communities assumed that a huge turnout for Barack Obama would mean the defeat of a ballot initiative repealing the legality of gay marriages.

That turned out to be critically incorrect.

Exit polls say that black and Latino voters — the same people who turned out in force to support the nation’s first black presidential nominee — were much more religiously conservative than the media or opponents of the initiative, Proposition 8, had figured.

A number of gay activists expressed surprise and disappointment that communities that have known grievous discrimination would be willing to curtail the civil rights of another group.

But the support of Proposition 8 by many of California’s racial and ethnic minorities doesn’t surprise Diane Winston. Winston is the Knight Chair of Media and Religion at the University of Southern California’s Annenberg School.

“For many believers, there’s no distinction between what they see as political issues and what they see as social, moral and cultural issues,” she says.

And it’s been that way for centuries, she says. The movements for the abolition of slavery, temperance, civil rights and abolition of the death penalty all had roots in America’s religious communities. To accomplish those goals, there have been coalitions across ecumenical lines for several decades.

“It’s true that recently politics has made some strange bedfellows in terms of religious partnerships,” Winston says. The Catholic Church invited the Mormon Church to join with it in 1996 to pass Proposition 22, The Defense of Marriage Act.

The two have not always enjoyed a harmonious relationship, especially because in earlier years, the Church of Jesus Christ of Latter-day Saints (the Mormon Church’s official name) was considered sub-Christian at best, cultish at worst, by many Christian sects.

The Mormon Church has poured millions of dollars into advancing and supporting Proposition 8, although that decision has caused a significant rift among its members. While many have begun Web sites and blogs in support of same-sex unions, the majority of church members have done the bidding of their elders, who have been quite persistent in asking them to support Proposition 8.

Laura Compton manages MormonsForMarriage.com, which posits that the benefits and joys of marriage should be available to all, regardless of gender preference. Compton, who continues to attend church, says “the pressure to support the measure has been very, very intense.”

Protest At The Westwood Mormon Temple

So it’s no surprise that a lot of the anger over Proposition 8’s success would be directed at the Mormon Church. On Thursday afternoon, more than 2,000 people marched and chanted in front of the West Los Angeles Mormon temple, criticizing the church for what they see as its relentless support of discrimination.

“I actually received my Mormon endowments — my initiations you’d call them — in this temple, and my father helped to build it,” says Robert Little, pointing to the stately limestone building with a steeple topped with a golden statue of the Mormon angel, Moroni.

Little is gay and says his family expelled him as soon as they found out. They contributed $30,000 this year to support Proposition 8.

Little is a former Mormon now and says the church should stay out of what he sees as a secular issue.

“It’s incomprehensible in 2008 that people still can’t understand the difference between civil marriage and religious marriage,” Little says. “They’re separate, and they should be separate.”

For the moment, gays and lesbians are offered domestic partnerships in California. But what many really want is marriage. And they’re in it for the long haul.

“We are not giving up,” said Kiran Kapadia, as passing motorists beeped in sympathy — and occasionally gestured disdainfully — as they whizzed past the demonstrators. “This is going to go on until we get victory, and we will, eventually.”

More demonstrations are scheduled throughout the weekend in several parts of California and beyond, including the seat of the Mormon Church, Salt Lake City.

Nov. 7 (Bloomberg) — The U.S. unemployment rate rose to the highest level since 1994 as companies slashed payrolls, setting the stage for the steepest economic decline in decades and a tough start for Barack Obama’s presidency.

The jobless rate rose to 6.5 percent in October from 6.1 percent the previous month, the Labor Department reported today in Washington. Employers fired 240,000 workers after a loss of 284,000 in September. Revisions to the previous month added 25,000 more to the jobless lines than previously reported.

The surge in unemployment, coupled with other signs the economy nosedived last month, puts pressure on Obama to quickly name his economic team and spell out his planned remedies. It may also spur congressional Democrats to enact in coming weeks a second fiscal stimulus package.

“The economy has entered the very deep portion of the recession and should remain there over the coming six to nine months,” said John Herrmann, president of Herrmann Forecasting LLC in Summit, New Jersey. “These numbers imply a stimulus package of closer to $500 billion, ranging over the remainder of this year and through 2009.”

Obama may address today’s report after meeting with his transition economic advisers, including billionaire investor Warren Buffett and former Federal Reserve Chairman Paul Volcker. The incoming president holds his first post-election press conference at 1:30 p.m. in Chicago.

25-Year High

The total number of unemployed Americans jumped to 10.08 million last month, the highest level in a quarter-century, today’s report showed.

Economists had anticipated a 200,000 drop in payrolls after a previously estimated 159,000 decline in September, according to the median of 78 estimates in a Bloomberg News survey. The median forecast for the unemployment rate was 6.3 percent.

“We’re heading for a deep recession,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts. “Banish the word mild from your vocabulary. It’s big, it’s bad and it’s broad-based.”

Stocks today recouped some of their losses from the past two days, when benchmark indexes plunged the most since 1987. The Standard & Poor’s 500 Stock Index was up 1.2 percent at 915.85 at 11:37 a.m. in New York. Ten-year Treasury note yields rose to 3.76 percent from 3.69 percent late yesterday.

“The evidence is more than compelling” that a recession is under way, Robert Hall, who heads the National Bureau of Economic Research’s panel that dates economic cycles, said in an interview following the jobs report. “It’s conclusive, in my personal opinion.” Hall is an economics professor at Stanford University.

Goldman’s Forecast

Goldman Sachs Group Inc. analysts downgraded their projections for the economy after today’s report, foreseeing the biggest contraction since 1982 in the fourth quarter. Goldman also projects that the unemployment rate will soar to 8.5 percent by the end of next year.

Job losses for August and September were revised up by 179,000. The economy has lost 1.18 million jobs so far this year.

The rise in jobless rolls was just the latest statistic suggesting that the economy gave way in October. U.S. auto sales plunged 32 percent, manufacturing contracted at its fastest pace in 26 years and consumer confidence fell by the most on record during the month.

The gathering gloom may prompt Federal Reserve Chairman Ben S. Bernanke and his central bank colleagues to reduce interest rates further at their next meeting on December 16. The Fed cut its benchmark rate a half percentage point last week to 1 percent, matching a half-century low.

Another Fed Move

“We will see another easing of 25 or 50 basis points in December,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, adding, “We may go for a very long time before the Fed is in a position to be raising rates again.”

Central banks throughout Europe slashed rates this week as the economic slump that began in the U.S. spread overseas, crimping consumer and corporate confidence. The International Monetary Fund this week projected the first simultaneous economic contractions in the U.S., Europe and Japan in the postwar era.

U.S. factory payrolls fell 90,000, the biggest monthly loss since July 2003, after decreasing 56,000 in September. A strike by 27,000 machinists at Boeing Co., which was resolved earlier this month, contributed to the drop, the Labor Department said.

Economists had forecast a drop of 65,000 manufacturing jobs. The decrease included a loss of 9,100 jobs in auto manufacturing and parts industries.

Today’s report also reflected the housing slump and credit crunch. Payrolls at builders dropped 49,000 after decreasing 35,000. Financial firms reduced payrolls by 24,000, after a 16,000 decline the prior month.

Loss at Retailers

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 108,000 workers after dropping 201,000 in the previous month. Retail payrolls decreased by 38,100, led by a loss of 20,300 jobs at auto dealerships, after a decline of 44,800.

Government payrolls increased by 23,000 after a loss of 41,000.

American Express Co., the largest U.S. credit-card company by purchases, said Oct. 30 it would eliminate 10 percent of its workforce, or about 7,000 people, to cut costs amid rising defaults as consumers fail to repay their debts.

The job cuts “will help us to manage through one of the most challenging economic environments we’ve seen in many decades,” Chief Executive Officer Kenneth Chenault said in a statement.

Workers’ average hourly wages rose 4 cents from the prior month, or 0.2 percent, to $18.21, the jobs report also showed. Hourly earnings were 3.5 percent higher than in October 2007.

The loss of jobs, plunging home prices, and a record tightening of bank lending may cause consumers and businesses to keep retrenching.

Gross domestic product shrank at a 0.3 percent annual pace in the third quartet and consumer spending fell at a 3.1 percent pace, the most since 1980.