Hopes rise for “fiscal cliff” deal as Obama, Boehner meet

WASHINGTON (Reuters) – President Barack Obama and top Republican John Boehner met at the White House on Monday as hopes rose that Washington will be able to head off steep tax hikes and spending cuts that could push the economy into recession next year.

Aides from both parties said they were optimistic that a deal could be reached in the coming days to avert the “fiscal cliff,” as lawmakers set the stage for action before a year-end deadline.

“There’s been too much progress at this point and neither guy wants to go over the cliff,” a senior Republican aide said.

Although both sides still had major differences, investors were cheered by signs of progress. The Standard & Poor’s 500 index was up 0.72 percent in late afternoon.

“I think there’s a lot of expectation that a fiscal cliff deal of some sort does get done,” said Joseph Benanti, managing director of Rosenblatt Securities in New York.

Senate Democratic leader Harry Reid said his chamber will wrap up work on the issue after Christmas.

“It appears that we’re going to be coming back the day after Christmas to complete work on the fiscal cliff,” he said on the Senate floor.

Boehner, the speaker of the Republican-controlled House of Representatives, has edged closer to Obama’s demand to raise taxes on the wealthiest Americans. In return, Obama is considering a measure that would slow the rate of growth of Social Security retirement benefits by changing the way they are measured against inflation, according to a Senate Democratic aide.

GETTING CLOSER ON TAXES

In a step toward an agreement, Boehner has put forward a tax increase for those earning over $ 1 million annually, while Obama wants that threshold set at $ 250,000. Republicans could probably stomach a tax hike on incomes above $ 500,000, a Republican aide said.

The two sides face a deadline of December 31, when $ 600 billion in across-the-board spending cuts and tax hikes are due to begin kicking in, a jolt to the economy that could throw it back into recession.

Boehner’s latest proposal calls for $ 1 trillion in new tax revenue, which would come from raising rates and limiting deductions that the wealthiest can take. That is $ 400 billion less than the White House wants, but the gap between the two sides has narrowed by half in recent weeks.

Boehner could float the broad outlines of a deal with rank-and-file members on Tuesday. If there are no strong objections, he could try to finalize the deal on Wednesday, the Republican aide said.

A Democratic aide said that if a deal is reached by Saturday night, votes could be held in Congress next week.

Both sides declined to say what Boehner and Obama discussed at the meeting, which was also attended by Treasury Secretary Timothy Geithner.

The White House said Boehner’s latest proposal doesn’t meet its standards.

“Thus far the president’s proposal is the only proposal that we have seen that achieves the balance that is so necessary,” White House spokesman Jay Carney said at a news briefing.

Republicans understand that the clock is ticking and they are confident that Boehner will get a deal they can support in the coming days, a senior House Republican aide said.

Boehner “won’t sign off on a deal that doesn’t have enough votes to get through,” the aide said.

Republicans want substantial spending cuts in return for increased tax revenue, but any proposal to trim popular benefit programs like the Medicare health insurance plan for seniors will face fierce resistance from liberal Democrats, whose votes will be needed to get a deal passed.

Obama could also face strong opposition from Democrats if he agrees to Boehner’s proposal to slow the growth of Social Security benefits by changing the way the cost-of-living increases are measured against inflation, an approach that could save $ 200 billion over 10 years.

Obama also wants to head off another confrontation over the government’s debt limit, which will need to be raised in the coming months. Republicans insist that any increase in the government’s $ 16.4 trillion borrowing authority must be paired with an equal reduction in spending.

(Additional reporting by Thomas Ferraro, Mark Felsenthal and Jeff Mason in Washington and Gabriel Debenedetti and Angela Moon in New York; Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)

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Art for Wealth’s Sake: Art Basel Paints a Picture of Miami’s Separate and Unequal Worlds

It’s 10 p.m. on a Friday night. A naked girl is splashing about in the swimming pool at the Standard Hotel Miami. She is from New York and runs a nonprofit for homeless teens. We’ll call her Liz: “You’re so boring!” she yells from the middle of the pool.

It was a common refrain here during Art Basel Miami Beach—now the world’s largest contemporary art fair—where many of earth’s most privileged humans gather for a week of champagne and gawking at art (and at each other) in the sun.

The poolside celebration was for Terry Richardson, a fashion photographer known for his sexually charged (or sexually abusive, depending on your source) shoots. A cell phone company, HTC, spent $ 100,000 to sponsor the party, a book release for Richardson. This is a typical event, one of hundreds that occur during what is commonly referred to as “Basel.”

MORE: Scenes From a Class War (VIDEOS)

Basel is now 11 years old. It’s gone from a decent sized art fair to an international marketing and branding orgy with few parallels. Because all the big collectors fly down private, and scores of cool young New Yorkers file in on JetBlue, luxury brands rush in to hit both their “target demos” and “tastemakers” in one shot.

In terms of tourism dollars, Basel is Miami’s highest grossing week. Hotels on South Beach were demanding thousands per night for rooms. The fair’s main sponsor was the honorable UBS, the very same Swiss bank that just settled a billion dollar fraud case with international authorities. UBS not only robs the world and stashes terrorist/dictator cash, it sponsors art fairs too—cool guys.

Most Miamians don’t care about Art Basel. The city is only 11 percent white (far and away the primary Basel target demographic), and most of the 40 percent Hispanic and 20 percent black populations live far from the South Beach glam, many in poverty. Miami has the second widest gap between rich and poor in America, after New York. Blacks make an average of $ 15,000 a year. Whites double that, at $ 37,000. But at $ 19,000, the city’s majority Hispanics aren’t doing so well either.

Disparity defines the art world too, with its hungry artists and rich collectors and patrons. So it’s fitting that the largest contemporary art fair in the world happens in Miami.

Few people are more detached from the short-end reality of income disparity than the global art tribe. These arbiters of the cultural elite fly around the world to various openings and fairs then retreat to galleries, museums and studios in their home cities before heading out again. Of course, there are exceptions. Some artists at Basel retain a socio-politico aesthetic. A good example is Barbara Krueger, whose text-orientated pieces mocking consumerism and political power were selling for $ 200,000 to $ 500,000 and became the talk of the fair.

Bearing many hallmarks of a third world city, Miami breaks down into two distinct populations. The rich live across Biscayne Bay on beautiful beaches and gated islands. The poor are stretched across downtown’s grid, where every block headed west from the bay is worse than the one before it. The city has few economically diverse neighborhoods.

The two Miamis can easily be visited on the same day. Last week. Alex “A-Rod” Rodriguez, the New York Yankee third baseman with the largest sports contract in history, was having a party in his $ 30 million modernist manse.

I skipped A Rod’s soiree, mainly because I hate the Yankees, to hang out with Dee, a 22-year-old drug dealer who lives on west 20th Street downtown. All he wanted was customers: “Man, who down here needs anything? I’m fucking broke. I live in the projects with my aunt. Gotta get out.”

Dee said he’d take any job—as in, “I’ll work at Chick-fil-A, man!” Saddled with a criminal record, he’s never been hired anywhere.

We cruised over to 75th Street, the main drag in Little Haiti, where public housing is painted lime green and similarly awesome pastel paint jobs cover buildings advertising W.I.C and Western Union.

“There are no banks here,” Dee tells me. “We don’t have enough money.”

UBS—where are you?

The South Beach Basel crowd hosted quite a few Hurricane Sandy benefits. But I didn’t find one art world benefit for Miami’s poor. There is a definite willful ignorance in plopping your billionaires down at dinners and six-figure parties in the name of “culture” while ignoring masses of people who are in dire need of said culture and are readily at hand: The impoverished residents of Miami.

Back in New York, I catch up with Liz, the naked pool gal. She’s in Tompkins Square Park, the epicenter of Manhattan’s Lower East Side. Stella is smiling. Her art world disdain has clearly dried off.

“I have no idea why I was in Miami,” she says. “Who were those people? Why are they so boring, and why did that one guy in the black suit keep saying Le Baron over and over again?”

Around the same time I get a text from Dee. “You know anyone still down here? Tryna get that $ .”

I inform Lee that Le Baron is a Parisian disco that does a chic party every night of Basel.

Lee receives this information as she’s handing out clean needles and Narcan to the local crust punk populace, all of whom she knows by name.

“Do these people really care?” she asks.

Sadly, Basel people do seem to express more concern about French discos and wearing aggressive outfits than they do about the inequality in America—maybe best seen in Miami’s two worlds.

I have an idea for Art Basel next year. In the process of exchanging all those millions for bought and sold visions, try and help some of the people from Miami.

Are wealthy visitors obligated to alleviate some of the local misery when they party in the midst of poverty? Take a position in COMMENTS.

These are solely the author’s opinions and do not represent those of TakePart, LLC or its affiliates.

Related Stories on TakePart:

• Dispatch From Morocco: ‘Excuse Me, Aren’t We About to Start a War Here?’

• America, Syria and the State of Child Soldiering 2012

• Census Shows Sharp Increase in U.S. Poor

---

Ray LeMoine was born in Boston and lives in New York. He’s done humanitarian work in Iraq and Pakistan and has written for various media outlets, including the New York Times, New York Magazine and the Awl.

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Actor Depardieu puts Paris house up for sale

PARIS (Reuters) – French actor Gerard Depardieu, accused of trying to escape the taxman by buying a house just over the border in Belgium, has put his sumptuous Parisian home up for sale.

Depardieu, the latest wealthy Frenchman to seek shelter from government tax hikes, is selling a vast early 19th-century manor house in the Saint Germain district of the capital, playground of writers, jazz musicians and art dealers over the decades.

His real estate agent declined to say how much he was asking for a property that is on a list of protected national monuments and, as well as the main house, has a swimming pool, landscaped gardens and an ultramodern annex that once served as a theatre.

News of the Parisian sale plan came a day after French Prime Minister Jean-Marc Ayrault described Depardieu’s behavior as “pathetic” and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt.

An angry member of parliament has proposed that France adopt a U.S.-inspired law that would force Depardieu or anyone trying to escape full tax dues to forego their nationality.

The 63-year-old “Cyrano de Bergerac” star recently bought a house in Nechin, a Belgian village a short walk from the border with France, where 27 percent of residents are French nationals, local mayor Daniel Senesael told French media on Sunday.

Depardieu also enquired about procedures for acquiring Belgian residency, he said.

The move comes three months after Bernard Arnault, chief executive of luxury giant LVMH and France’s richest man, caused an uproar by seeking to establish residency in Belgium – a move he said was not for tax reasons.

Belgian residents do not pay wealth tax, which in France is now levied on those with assets over 1.3 million euros ($ 1.7 million). Nor do they pay capital gains tax on share sales.

Socialist President Francois Hollande is pressing ahead too with plans to impose a 75-percent supertax on income over 1 million euros.

While Depardieu’s real estate agents did not comment on the price being sought for the Paris property, a local newspaper suggested it could be in the region of 50 million euros.

At average prices quoted on the Internet, a property of that size would command upwards of 20 million, without the additional status of a national monument, celebrity appeal or the artwork renovation commissioned by Depardieu when he bought it in 2003.

Depardieu’s agents declined to comment.

(Reporting by Brian Love and Gerard Bon; editing by Andrew Roche)

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Analysis: Boehner opens door to tax hikes, shifts U.S. fiscal cliff talks

WASHINGTON (Reuters) – U.S. House of Representatives Speaker John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.”

The question now boils down to price – which income levels, what rates and what’s offered in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no surge toward an agreement is immminent.

With just over two weeks before the fiscal cliff’s $ 600 billion in automatic tax hikes and spending cuts are triggered, threatening a new recession, there is little time to craft a comprehensive deal that will satisfy both Democrats and Republicans.

Until the latest offer, made on Friday, Boehner had insisted on extending all of the Bush era tax rates, resisting President Obama’s demand to let the marginal rates rise on income above $ 250,000. A rising chorus of business executives also had urged Republicans to agree to this.

Although the White House has not accepted Boehner’s gambit, which media reports have said includes a $ 1 million tax-hike threshold, it could push negotiations away from entrenched, ideological positions.

“Boehner has now accepted the premise of higher rates. So now we’re just arguing over details. I think it’s a significant step,” said Greg Valliere, chief political strategist at Potomac Research Group.

A framework deal spelling out tax revenue and spending cut targets to be finalized in the new year could be possible, Valliere said.

“Boehner’s offer to allow tax rates to go up for taxpayers earning over $ 1 million fundamentally transforms fiscal cliff negotiations,” added Sean West, U.S. policy analyst at Eurasia Group, a political risk consultancy.

In a note to clients, West wrote that it signals, significantly, that Boehner ultimately believes a deal to avoid the cliff is still possible.

“The political burden is now shifted back to the president, who must be willing to take on his party in order to get a deal Boehner can ultimately pass. We do not think the president will overreach: Obama will work with Boehner to get to a deal.”

There are still several critical elements to a deal besides a tax rate increase on the wealthy, including Republican demands to cut spending on entitlements.

Changes to the expensive Medicare and Medicaid health care programs for the elderly and the poor could be central to any deal, which must also include an increase in the federal debt limit needed by the end of February.

DEMANDS ENTITLEMENT CUTS

Boehner conditioned his tax rate increase offer on Obama agreeing to cuts in entitlement spending.

Many Republican lawmakers want to raise the eligibility age on Medicare from 65 to 67. They also want to add more means testing to Medicare, making wealthier retirees pay more for their care.

Currently, Medicare does have some means testing, charging higher premiums for coverage of doctors visits and prescription drugs to individuals earning more than $ 85,000 and married couples earning more than $ 170,000. Only about 5 percent of recipients pay these higher premiums.

Thus far, Obama has offered only about $ 400 billion in 10-year entitlement savings, mostly through small adjustments in reining in health care costs – not fundamental changes such as raising eligibility ages.

And just as Boehner faces opposition in his own party to raising any tax rates, Obama faces opposition to cuts to Medicare, Medicaid and Social Security from Democrats, who pledged in election campaigns they would protect these programs.

A major bloc of congressional Democrats has already signaled they will not accept major cutbacks in Medicare as part of any fiscal cliff deal.

House Minority Leader Nancy Pelosi of California and Maryland Representative Chris Van Hollen are among the high ranking Democrats in the House who in recent days have come out forcefully defending against raising the age for eligibility for Medicare from the current 65 to 67 years of age.

“Given the level of savings that is being talked about from Medicare, you can’t get it all from providers and drug makers,” said Paul Heldman, an analyst at Potomac Research, which tracks Washington policy for investors.

“So Opponents of raising the eligibility age have reason to believe beneficiaries will take some sort of hit if a mega-deal is cut,” he said.

If Republicans are not successful in securing entitlement program cuts in exchange for a tax-rate increase on the wealthy, they are adamant about using a debt-limit increase as leverage to overhaul Social Security and Medicare.

The U.S. Treasury expects to reach its $ 16.4 trillion statutory debt cap by year-end, and will exhaust its remaining borrowing capacity around mid-February, risking a potential default.

Louisiana Republican Representative John Fleming, a member of the conservative Tea Party caucus who has never voted to increase the debt ceiling, said he would support a debt limit hike if it were part of a deal to make Medicare and Social Security sustainable.

The pace of activity could pick up the coming week.

House Republicans were told to prepare for a possible weekend session next week, potentially interrupting travel plans for the long Christmas holiday weekend.

House Majority Leader Eric Cantor scheduled “possible legislation related to expiring provisions of law,” a reference to the expiring tax cuts, for the end of the week, portending a weekend session. Cantor has said the House would meet through the Christmas holidays and beyond.

(Additional reporting by Thomas Ferraro, Richard Cowan and Kim Dixon; editing by Fred Barbash and Todd Eastham)

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Abe’s challenge: Can he give Japan what money can’t buy

TOKYO (Reuters) – Even before Japanese voters returned Shinzo Abe‘s party to power, he had already won over financial markets with an economic revival plan as seductively simple as economists say it is risky: print money and spend it. Lots of it.

The Liberal Democratic Party’s landslide on Sunday is likely to sustain a market rally fuelled by economic stimulus hopes, but Abe’s economic legacy will probably be defined by how he tackles chronic ills that easy money alone cannot fix and that were largely ignored during the campaign.

The conservative leader set to return to the prime minister’s post he abruptly left in 2007 campaigned on a promise to double spending on public works and to push the Bank of Japan for radical action to end deflation and help exporters such as Toyota and Sony by taming the yen.

“The fact that Abe points to changes in the BOJ law or forex levels, or aggressive easing as solutions to Japan‘s problems is, if anything, worrying,” said Yuuki Sakurai, chief executive of Fukoku Capital Management which manages $ 19 billion in assets.

“They should be treated as tools to buy time to implement structural reforms, but we’re not hearing anything about deep reforms that the LDP wants to carry out.”

The so-called Abe trade – a 4 percent slide in the yen and more than a 10 percent rise in stock prices over the past month – shows that for now, most investors just want to see the new leader fulfill his pledges.

Analysts said they expected Sunday’s vote, which according to TV projections based on counted votes gave LDP and its ally a two-thirds lower house majority, to sustain that trend in the near-term.

“Abe’s economic policies will be implemented so the economy will improve next year. The problem is what happens after that,” said Koichi Haji, chief economist at NLI Research Institute in Tokyo. “The key is whether Abe can implement long-term structural reforms and growth strategies.”

The BOJ is poised to heed Abe’s calls for more aggressive easing and a more ambitious 2 percent inflation target, with markets expecting the central bank to ease policy for the fifth time this year on Thursday.

Investors also expect an extra budget of up to 10 trillion yen ($ 120 billion) as a down payment on Abe’s plan to spend such amounts per year over the next decade – double the current level – on public works long synonymous with the LDP.

Economists say pumping cash into the economy will only give it a temporary jolt if not followed by efforts to lift its growth potential and contain runaway debt.

In just three decades Japan has become the world’s oldest society, with those 65 or above making up nearly a quarter of a population that is greying and is estimated to have shrunk by over 260,000 in the last fiscal year alone.

Recipes to cope with it are well known: social security overhaul, including cuts in healthcare and pensions; boosting access to overseas markets and opening Japan to foreign goods, workers and investment; power sector revamp and bringing more women into the workforce.

All, however, carry political and social risks that Japan’s recent revolving-door leaders were unable or unwilling to take.

Left to sink or swim with swings in overseas demand for its exports and its currency, the world’s third-largest economy has been in and out of recession and dogged by low-grade deflation for the past two decades.

Now, in firm control of the lower house, Abe has a chance to prove his mettle and erase the memories of his first troubled year in office.

So far he has played it safe.

His “Abenomics” — a mix of potent monetary stimulus and big public spending — carries little political cost and he has been coy on touchy issues such the U.S.-led Trans-Pacific Partnership (TPP) free trade pact, or implementing sales tax increases.

With some luck, the new government may be even be able to call an end to a brief recession it entered last quarter.

Economists polled by Reuters last week predict the economy will start growing again in the first quarter of next year, largely due to expected recovery in China, Japan’s top export market.

TAX TEST

Abe’s first stern economic test will come after August, when the government, armed with second-quarter data, will decide whether the economy is strong enough to go ahead with a first round of planned sales tax increases.

With 10-year bond yields near a decade low below 0.7 percent, bond investors are now confident that he can steer the central bank to buy more bonds from the world’s most indebted government without setting off a market meltdown.

To keep that trust, Abe must convince investors that in his push for big scale-stimulus, he has not abandoned budget discipline. Economists say with Japan’s public debt at more than twice its economic output and climbing, the new government can ill-afford delaying a tax hike that has become a symbol of Tokyo’s fiscal rectitude. Their message is clear: “Just do it!”

“I hope they will go through with it,” said Takatoshi Ito, a Tokyo University professor, former adviser to the first Abe administration who is now mooted as a possible successor to BOJ Governor Masaaki Shirakawa when his term ends in April.

“Tax revenue is less than half of expenditures. Bond issuance is bigger than tax revenues. It’s like using a credit card for more than half of your monthly expenditure. It’s crazy, abnormal, you can’t go on like that.”

(Additional reporting by Kaori Kaneko, Antoni Slodkowski and Leika Kihara; Editing by Raju Gopalakrishnan)

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Chicano rock pioneers Los Lobos marking 40 years

LOS ANGELES (AP) — They are seen as the progenitors of Chicano rock ‘n’ roll, the first band that had the boldness, and some might even say the naiveté, to fuse punk rock with Mexican folk tunes.

It was a group called Los Lobos that had the unusual idea of putting an accordion, a saxophone and something called a bajo sexto alongside drums and Fender Stratocaster guitars and then blasting a ranchera-flavored folk tune or a Conjunto inspired melody through double reverb amps at about twice the volume you’d normally expect to hear.

“They were Latinos who weren’t afraid to break the mold of what’s expected and what’s traditionally played. That made them legendary, even to people who at first weren’t that familiar with their catalog,” said Greg Gonzalez of the young, Grammy-winning Latino-funk fusion band Grupo Fantasma.

To the guys in Los Lobos, however, the band that began to take shape some 40-odd years ago in the hallways of a barrio high school is still “just another band from East LA,” the words the group has used in the title of not one but two of its more than two dozen albums.

As a yearlong celebration of Los Lobos‘ 40th anniversary gets under way, having officially begun on Thanksgiving, much is likely to be made of how the band began as a humble mariachi group, toiling anonymously for nearly a decade at East LA weddings and backyard parties before the unlikely arrival of rock stardom.

That’s, well, sort of true.

For long before there was mariachi in Los Lobos‘ life, there was power-chord rock ‘n’ roll. Before the Latin trio Las Panchos had an impact, there was Jimi Hendrix.

“I actually went to go see him when I was 14 or 15,” says drummer-guitarist and principal lyricist Louie Perez, recalling how he had badgered his widowed mother to spend some of the hard-earned money she made sewing clothes in a sweatshop on a ticket to a Hendrix show.

“I sat right down front,” he recalls, his voice rising in excitement. “That experience just sort of rearranged my brain cells.”

About the same time, he had met a guitarist named David Hidalgo in an art class at James A. Garfield High, the school made famous in the 1988 film “Stand and Deliver” that profiled Jaime Escalante’s success in teaching college-level calculus to poor barrio kids. Soon the two had recruited fellow students Conrad Lozano and Cesar Rosas, both experienced musicians.

“Cesar had played in a power trio,” Perez recalls, while Lozano had been playing electric bass guitar for years.

It was sometime in November 1973 (no one remembers the exact day so they picked Thanksgiving) when the band is believed to have been born.

And the group might have stayed just another garage band from East LA, had it not been for a Mexican tradition called Las Mananitas.

“It’s a serenade to someone on their birthday,” Perez explains, and the group members’ mothers had birthdays coming up.

“So we learned about four or five Mexican songs and we went to our parents’ homes and did a little serenade,” Hidalgo recalled separately.

They were such a hit that they began scouring pawn shops for genuine Mexican instruments and really learning to play them.

Because they were at heart a rock ‘n’ roll band, however, they always played the music a little too loud and a little too fast. That was acceptable at the Mexican restaurants that employed them, until they decided to break out the Stratocaster guitars they had so coveted as kids.

“They said, ‘Well, that’s not what we hired you for,’” Perez says, chuckling.

So they headed west down the freeway to Hollywood, where initially the reaction wasn’t much better.

Saxophonist Steve Berlin recalls seeing the hybrid group showered with garbage one night when they opened for Public Image Ltd. Two years later, however, when they opened for Berlin’s group the Blasters, the reaction was different.

“It was quite literally an overnight success kind of thing,” the saxophonist recalls. “By the next morning, everybody I knew in Hollywood, all they were talking about was this band Los Lobos.”

A few nights later, they asked Berlin if he might jam with them. They were working up some tunes melding punk rock with Norteno, a Latin music genre that uses an accordion and a saxophone, and they needed a sax player.

For his part, Berlin says, he had never heard of Norteno music.

Something clicked, however, and soon he was producing the group’s first true rock album, 1984′s “How Will the Wolf Survive?” At the end of the sessions he was in the band.

The next 28 years would be pretty much the same kind of up-and-down ride as the first 12 were.

The group became international rock stars in 1987 with their version of the Mexican folk tune “La Bamba” for the soundtrack of the film of the same name. They melded 1950s teen idol Ritchie Valens’ rock interpretation with the original Son Jarocho style and sent the song to No. 1.

A two-year tour and a couple albums that nobody bought followed, leaving the group broke and disillusioned.

So they poured their anger and disillusionment into the lyrics and power chords of “Kiko,” the 1992 album now hailed as their masterpiece. A new version, recorded live, was released earlier this year.

The influence of Los Lobos‘ cross-cultural work can be heard to this day in the music of such varied young Latino groups as the hip-hop rockers Ozomatli, the Son Jarocho-influenced alt-music band Las Cafeteras and the Latino pop-rock group La Santa Cecilia, says Josh Kun, an expert on cross-border music.

“All of these bands inherited, wittingly or not, the experimental and style crossing instincts that Los Lobos proved were possible while hanging onto and developing your roots as a Mexican-American group,” said Kun, who curated the Grammy Museum’s recent “Trouble in Paradise” exhibition that chronicled the modern history of LA music.

For Los Lobos, winner of three Grammys, that was just the natural way of doing things for guys, Perez says, who learned early on that they didn’t fit in completely on either side of the U.S.-Mexico border.

“As Mexican-Americans in the U.S. we’re not completely accepted on this side of the border. And then on the other side of the border it’s like, ‘Well, what are you?’” he mused.

“So if that’s the case,” he added brightly, “then, hey, we belong everywhere.”

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School murders silence “cliff” rhetoric as deadline nears

WASHINGTON (Reuters) – Mass murder in Connecticut silenced “fiscal cliff” talk on Saturday as the White House and Congress quietly got ready for a final scramble to avert the tax hikes and spending cuts set for the New Year, with sessions of the U.S. House of Representatives now scheduled just days before Christmas.

President Barack Obama canceled a trip he had planned to make next Wednesday to Portland, Maine to press his case for tax hikes for the wealthy. His weekly radio and Internet address on Saturday focused on Newtown, the site of Friday’s school shootings, in which a gunman killed 20 children and six adults before taking his own life.

House Speaker John Boehner of Ohio canceled the standard Republican radio response to Obama “so that President Obama can speak for the entire nation at this time of mourning,” he said in a statement issued late Friday.

The moratorium on cliff pronouncements masked a growing recognition that the two sides could remain deadlocked at the end of the year on the key sticking point – whether to leave low tax rates in place except for high earners, as Obama wants, or extend them for all taxpayers, as Boehner wants.

With multiple polls showing that the public supports Obama’s position, Republicans in the U.S. Senate prodded their counterparts in the House to make a face-saving retreat, in a fashion that would allow Obama’s proposal to pass the Republican-controlled House while simultaneously letting Republicans cast a vote against it.

Republicans could then shift the debate onto territory they consider more favorable to them, cutting government spending to reduce the deficit.

“Just about everyone is throwing stuff on the wall to see if anything sticks,” one Republican aide said with reference to various proposals being discussed on how to proceed. Alluding to public opinion polls, the aide added: “We know if there is no deal, we will get blamed.”

“We could win the argument on spending cuts,” said a Republican senator who asked not to be identified. “We aren’t winning the argument on taxes.”

However, Republican leaders in both chambers are leery about seeming to cave on taxes. “There’s concern that if we did that, Obama would simply declare victory and walk away and not address spending,” said one aide. “We don’t trust these guys.”

Some of the prodding was coming from Senate Minority Leader Mitch McConnell of Kentucky.

Don Stewart, a McConnell spokesman, said the minority leader in the Democratic-controlled Senate hasn’t embraced any single plan, but has discussed and circulated measures offered by fellow Senate Republicans.

“Senator McConnell does not advocate raising taxes on anybody or anything,” Stewart said.

“We’re focused on getting a balanced plan from the White House that will begin to solve the problem of our debt and deficit to improve the economy and create American jobs,” said Boehner spokesman Michael Steel.

“Right now, all the president is offering is massive tax hikes with little or no spending cuts and reforms,” Steel said.

House Majority Leader Eric Cantor scheduled “possible legislation related to expiring provisions of law,” a reference to the expiring tax cuts, for the end of the week, portending a weekend session.

Cantor has said the House would meet through the Christmas holidays and beyond.

Hopes expressed after the November6 general election of some “grand bargain” on deficit reduction have all but disappeared, at least for this year. This is partly because time is running out and partly result of growing warnings from Democrats in Congress that they would not support big changes in the Medicare program, the government-run health insurance program for seniors that is a major contributor to the government’s debt.

House Democratic Minority Leader Nancy Pelosi of California ruled out one frequently mentioned proposal – raising the age of eligibility for Medicare, in a December 12 CBS television interview.

Asked if she was drawing a “red line,” around that idea, Pelosi said her comments were “something that says, ‘don’t go there,’ because it doesn’t produce money.

(Reporting by Thomas Ferraro and Kim Dixon; Editing by Fred Barbash and David Brunnstrom)

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Economic slowdown throughout euro zone a worry for ECB: Liikanen

BERLIN (Reuters) – Economic growth is slowing to a worrying degree across the euro zone and not only in the periphery, European Central Bank Governing Council member Erkki Liikanen said in an interview to be published on Sunday in Germany’s Welt am Sonntag newspaper.

“There are a number of indications that the economy is getting weaker and not only in the indebted southern European countries, but across the euro zone,” Liikanen was quoted as saying in an excerpt released on Saturday.

“Economic developments are causing us concern,” he said, adding that no-one is immune to the effects of the debt crisis. “Not even the German economy.”

Liikanen did not say what action should be taken to deal with the slowdown, and a Reuters poll this week found economists are evenly split on what else – if anything – the ECB will do.

Thirty-nine economists said the ECB would hold its main refinancing rate at its current record low of 0.75 percent through the first quarter of next year, while 38 believed it would cut the rate to 0.5 percent.

The ECB on December 6 predicted the euro zone economy would shrink again in 2013. Its projections for economic performance ranged from a 0.9 percent drop to a meager 0.3 percent rise next year, suggesting contraction is far more likely than not.

It had previously penciled in a range of -0.4 percent to +1.4 percent for the euro area economy.

On Dec 7. the central banks of Germany and Austria forecast barely any economic growth in 2013, with the Bundesbank flagging risks of a recession in the euro zone’s biggest economy as the debt crisis hits the bloc’s core.

(Reporting By Erik Kirschbaum; Editing by Hugh Lawson)

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NKorea rocket launch shows young leader as gambler

PYONGYANG, North Korea (AP) — A triumphant North Korea staged a mass rally of soldiers and civilians Friday to glorify the country’s young ruler, who took a big gamble this week in sending a satellite into orbit in defiance of international warnings.

Wednesday’s rocket launch came just eight months after a similar attempt ended in an embarrassing public failure, and just under a year after Kim Jong Un inherited power following his father’s death.

The surprising success of the launch may have earned Kim global condemnation, but at home the gamble paid off, at least in the short term. To his people, it made the 20-something Kim appear powerful, capable and determined in the face of foreign adversaries.

Tens of thousands of North Koreans, packed into snowy Kim Il Sung Square, clenched their fists in a unified show of resolve as a military band tooted horns and pounded on drums.

Huge red banners positioned in the square called on North Koreans to defend Kim Jong Un with their lives. They also paid homage to Kim Jong Un’s father, Kim Jong Il, and his grandfather, North Korean founder Kim Il Sung.

Pyongyang says the rocket put a crop and weather monitoring satellite into orbit. Much of the rest of the world sees it as a thinly disguised test of banned long-range missile technology. It could bring a fresh round of U.N. sanctions that would increase his country’s international isolation. At the same time, the success of the launch could strengthen North Korea’s military, the only entity that poses a potential threat to Kim’s rule.

The launch’s success, 14 years after North Korea’s first attempt, shows more than a little of the gambling spirit in the third Kim to rule North Korea since it became a country in 1948.

“North Korean officials will long be touting Kim Jong Un as a gutsy leader” who commanded the rocket launch despite being new to the job and young, said Kim Byung-ro, a North Korea specialist at Seoul National University in South Korea.

The propaganda machinery churned into action early Friday, with state media detailing how Kim Jong Un issued the order to fire off the rocket just days after scientists fretted over technical issues, ignoring the chorus of warnings from Washington to Moscow against a move likely to invite more sanctions.

Top officials followed Kim in shrugging off international condemnation.

Workers’ Party Secretary Kim Ki Nam told the crowd, bundled up against a winter chill in the heart of the capital, that “hostile forces” had dubbed the launch a missile test. He rejected the claim and called on North Koreans to stand their ground against the “cunning” critics.

North Korea called the satellite a gift to Kim Jong Il, who is said to have set the lofty goal of getting a satellite into space and then tapped his son to see it into fruition. The satellite, which North Korean scientists say is designed to send back data about crops and weather, was named Kwangmyongsong, or “Lode Star” — the nickname legendarily given to the elder Kim at birth.

Kim Jong Il died on Dec. 17, 2011, so to North Koreans, the successful launch is a tribute. State TV have been replaying video of the launch to “Song of Gen. Kim Jong Il.”

But it is the son who will bask in the glory, and face the international censure that may follow.

Even while he was being groomed to succeed his father, Kim Jong Un had been portrayed as championing science and technology as a way to lift North Korea out of decades of economic hardship.

“It makes me happy that our satellite is flying in space,” Pyongyang citizen Jong Sun Hui said as Friday’s ceremony came to a close and tens of thousands rushed into the streets, many linking arms as they went.

“The satellite launch demonstrated our strong power and the might of our science and technology once again,” she told The Associated Press. “And it also clearly testifies that a thriving nation is in our near future.”

Aside from winning him support from the people, the success of the launch helps his image as he works to consolidate power over a government crammed with elderly, old-school lieutenants of his father and grandfather, foreign analysts said.

Experts say that what is unclear, however, is whether Kim will continue to smoothly solidify power, steering clear of friction with the powerful military while dealing with the strong possibility of more crushing sanctions. The United Nations says North Korea already has a serious hunger problem.

“Certainly in the short run, this is an enormous boost to his prestige,” according to Marcus Noland, a North Korea analyst at the Peterson Institute for International Economics in Washington.

Noland, however, also mentioned the “Machiavellian argument” that this could cause future problems for Kim by significantly boosting the power of the military — “the only real threat to his rule.”

Successfully firing a rocket was so politically crucial for Kim at the onset of his rule that he allowed an April launch to go through even though it resulted in the collapse of a nascent food-aid-for-nuclear-freeze deal with the United States, said North Korea analyst Kim Yeon-su of Korea National Defense University in Seoul.

The launch success consolidates his image as heir to his father’s legacy. But it could end up deepening North Korea’s political and economic isolation, he said.

On Friday, the section at the rally reserved for foreign diplomats was noticeably sparse. U.N. officials and some European envoys stayed away from the celebration, as they did in April after the last launch.

Despite the success, experts say North Korea is years from even having a shot at developing reliable missiles that could bombard the American mainland and other distant targets.

North Korea will need larger and more dependable missiles, and more advanced nuclear weapons, to threaten U.S. shores, though it already poses a shorter-range missile threat to its neighbors.

The next big question is how the outside world will punish Pyongyang — and try to steer North Korea from what could come next: a nuclear test. In 2009, the North conducted an atomic explosion just weeks after a rocket launch.

Scott Snyder, a Korea specialist for the Council on Foreign Relations, wrote recently that North Korea‘s nuclear ambitions should inspire the U.S., China, South Korea and Japan to put aside their issues and focus on dealing with Pyongyang.

If there is a common threat that should galvanize regional cooperation, “it most certainly should be the prospect of a 30-year-old leader of a terrorized population with his finger on a nuclear trigger,” Snyder said.

____

Jon Chol Jin in Pyongyang, and Foster Klug and Sam Kim in Seoul, South Korea, contributed to this report. Follow Jean H. Lee on Twitter: (at)newsjean.

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