"... managers, janitors, lawyers, nurses, librarians, bartenders, and everyone else who had a job in 2016 ..."
"... Total US Income = $18,750,000,000,000 Combined Wages & Salaries of All Employed Folks = $6,968,053,985,200 Income from Federal Social Benefits = $2,039,300,000,000 ..."
"... Total Income - (Wages & Salaries + Benefits) = $9,763,546,014,800 ..."
"... every commodity ..."
"... every last grain ..."
"... every waste bin ..."
"... every single cappuccino ..."
"... Property income ..."
"... unearned income ..."
"... interest ..."
"... interest, rent, and corporate profits ..."
"... with ..."
"... just as valuable ..."
"... honest work ..."
"... In solidarity, John Laurits ..."
"... If you enjoy these posts, consider buying the writer a cup of coffee ..."
"... or making a monthly donation ..."
"... -- it's like a voluntary subscription directly to an artist & journalist ..."
Working Class w/ No Living Wage: The
Absurd Math of US Income
As the stock market gleefully claws its way to
more record-breaking highs,
Forbes reports
a full 56% of US Americans now have
less than $1,000 to their names -- and 25% have
less than $100
. But the
economy, as they say, is
booming.
Even with 165 million on the
breadline and an hourly minimum wage of only $7.25 nationally, surging Amazon share prices have
added $13 billion to Jeff Bezos' net-worth
since
mid-September. For perspective, $13 billion is enough to pay the student-loan debts of 432,000 millennials.
It's also plenty to end world hunger for a year, according to
the International Institute
for Sustainable Development
. And Bezos -- now the world's richest man -- smashes a bottle of
organic champagne to celebrate his new wind-farm. The question is -- how do markets grow as the wealth of the
people shrinks and wages fall? What do the commentariat mean by "economic growth" when the nation's income can
hardly keep half of its people's heads above water?
The National Income:
How Much Value is Created by the US Economy?
There are a lot of ways to measure economies -- for
example,
gross domestic product
or
GDP
is the value of everything a country produces ( minus the cost to produce it ) and the
employment-rate
measures the number of paying jobs. The
gross national income
or GNI is what you get after adding up all of
the income earned by everyone. GNI includes every citizen ( even in other countries ) and every kind of income
from wages or salaries to social security and unemployment benefits, investment returns, or the sale of assets
like houses and cars.
GNI is basically the total value of all money
paid to everyone, minus the expenses of doing the business everyone is getting paid for. According to the
macroeconomic accounts on the Federal Reserve's website, the GNI was about
$18.7 trillion dollars
in 2016 for the US.
Gross National Wages:
Every Paycheck Combined
Now, how much of America's multi-trillion-dollar
paycheck ends up in the pockets of people who work in the US? Since the "gross national wage" is apparently not
as important to US media-outlets as Jeff Bezos' latest earnings or the many triumphs of the Dow Jones, this
number is a bit more camouflaged. Luckily, the
total number who are employed by all industries and their
average wages or salaries
can be found in the bowels of the Bureau of Labor Statistics' website.
Multiplying these two numbers -- the total employed by all industries and their mean-average yearly
wages -- gives the combined wages and salaries of everyone with a job in the US, from the clerks and mechanics
to the brain-surgeons and corporate executives.
$7 trillion dollars to split between all employed people in the United States.
Everyone who built
everything and provided every service --
managers, janitors, lawyers,
nurses, librarians, bartenders, and everyone else who had a job in 2016
-- collectively earned about $7
trillion of the $18.7 trillion national paycheck.
But who gets the remaining $11,781,946,014,800?
Federal Benefits & Social Welfare
The national income also includes money received
from government benefits, such as disability, retirement, and social security. The Bureau of Labor Statistics
lists the 2016 total federal benefits
received at
$2.0393 trillion.
Total US Income = $18,750,000,000,000
Combined Wages & Salaries of All Employed Folks = $6,968,053,985,200
Income from Federal Social Benefits = $2,039,300,000,000
Total Income - (Wages & Salaries + Benefits) =
$9,763,546,014,800
And about $9.8 trillion is still missing.
Literally All Working People Combined
Earn Less Than Half of American Income
According to the BLS data,
there are an estimated
146 million people who hold some sort of job in the US.
These
146 million workers create
every commodity
, serve
every meal
, harvest
every last
grain
, empty
every waste bin
, teach
every student
, build
every house
,
and pour milk into
every single cappuccino
in the nation. And together
they take
about 37.2%
of the American pie.
All of the so-called
"handouts" from the federal government -- social security, retirement, disability, and other benefits -- only
amount to another 10.8% of the GNI.
The combined income from all employment and federal
benefits still only adds up to 48% of America's paycheck. And that means that the other 52% must be paid to
someone -- or some
thing
-- without a job.
Unearned Income: Landlords, Industrial
Capitalists, & Wall Street Investors
Property
income
-- or, as the classical economists knew it,
unearned income
-- is
earned through ownership ( rather than
wages
, which are earned by time
spent working ). There are three basic types of unearned income.
Rent
is paid to owners of land or other natural resources,
profit
is paid
to owners of capital ( like factories, equipment, machines, etc. ), and
interest
is paid to owners of financial assets ( like stocks, securities, debt, etc. ). The $13 billion
Jeff Bezos made when Amazon share prices increased, for example, was "earned" by owning something rather than
creating something or providing some service.
This type of income is a bit harder to keep
track of -- especially considering that the wealthy seem to be in the habit of using offshore tax-havens and
shell companies ( like those revealed in the
Panama
and
Paradise Papers
) to stash their fortunes. With
that being said, the
US Department of Commerce's accounts
show
nearly $7 trillion
-- or about the same as 146 million
working people made combined -- paid out for
interest, rent, and corporate
profits
. Another trillion and a half or so was paid to "proprietors" or, more colloquially, the
owners.
And now we have a rough sketch of the great
American paycheck:
Are Workers Worthy of Their Wages?
Not in the United States of America!
There are two basic components to the whole
economic activity and wealth of human civilization --
capital
and
labor
.
On one hand there is capital -- all of the natural resources, materials, lands, machines, and everything that
everything is made
of
and made
with
-- and, on the other hand, there are the countless workers whose labor-power transforms that stuff
into the societies we live in.
Without the time, energy, creativity, and
sacrifices made by the 146 million human beings who make everything and offer every service, the wealth of
people like Jeff Bezos would not exist. Business magnates like Jeff Bezos, Warren Buffet, and Bill Gates
need
working classes -- working classes do not need
them
. And yet
Bezos, Buffet, and Gates now possess more wealth than the
bottom 50%
of the nation combined.
Through the prism of the American economy, people like Bezos, Buffet, and Gates are
just as valuable
as the poorest 160 million of the working classes who
collectively labor billions of hours each week.
And
that
is unfair --
that
doesn't add up. The "American Dream" -- the whole idea
about how anyone willing to work hard should be able to prosper or, at the very least, make ends meet -- is
objectively
untrue
. The truth is -- if you want to earn wealth in the
US or even if you only want to earn enough to pay the bills on time --
honest
work
is not a very good strategy.
In solidarity,
John Laurits
If you enjoy these posts, consider buying the writer a cup of coffee
using PayPal
or making a monthly donation
using Patreon
-- it's
like a voluntary subscription directly to an artist & journalist
John Laurits is not an
award-winning journalist. Follow to watch the comic futility of John's quest to defeat capitalism with art
https://www.johnlaurits.com
"... It tells me that the bottom line is that Christmas has become a harder season for White families. We are worse off because of BOTH social and economic liberalism which has only benefited an elite few. The bottom half of the White population is now in total disarray – drug addiction, demoralization, divorce, suicide, abortion, atomization, stagnant wages, declining household income and investments – and this dysfunction is creeping up the social ladder. The worst thing we can do is step on the accelerator. ..."
As we move into 2018, I am swinging away from the Republicans. I don't support the Paul Ryan
"Better Way" agenda. I don't support neoliberal economics. I think we have been going in the
wrong direction since the 1970s and don't want to continue going down this road.
Opioid Deaths: As we all know, the opioid epidemic has become a national crisis and the White working class
has been hit the hardest by it. It is a "sea of despair" out there.
White Mortality: As the family crumbles, religion recedes in his life, and his job prospects dwindle, the
middle aged White working class man is turning to drugs, alcohol and suicide: The White suicide
rate has soared since 2000:
Median Household Income: The average household in the United States is poorer in 2017 than it was in 1997:
Real GDP: Since the late 1990s, real GDP and real median household income have parted
ways:
Productivity and Real Wages: Since the 1970s, the minimum wage has parted ways with
productivity gains in the US economy:
Stock Market: Since 2000, the stock market has soared, but 10% of Americans own 80% of
stocks. The top 1% owns 38% of stocks. In 2007, 3/4th of middle class households were invested
in the stock market, but now only 50% are investors. Overall, 52% of Americans now own stocks,
which is down from 65%. The average American has less than $1,000 in their combined checking
and savings accounts.
Do you know what this tells me?
It tells me that the bottom line is that Christmas has become a harder season for White
families. We are worse off because of BOTH social and economic liberalism which has only
benefited an elite few. The bottom half of the White population is now in total disarray
– drug addiction, demoralization, divorce, suicide, abortion, atomization, stagnant
wages, declining household income and investments – and this dysfunction is creeping up
the social ladder. The worst thing we can do is step on the accelerator.
Paul Ryan and his fellow conservatives look at this and conclude we need MORE freedom. We
need lower taxes, more free trade, more deregulation, weaker unions, more immigration and less
social safety net spending. He wants to follow up tax reform with entitlement reform in 2018. I
can't but see how this is going to make an already bad situation for the White working class
even worse.
I'm not rightwing in the sense that these people are. I think their policies are harmful to
the nation. I don't think they feel any sense of duty and obligation to the working class like
we do. They believe in liberal abstractions and make an Ayn Rand fetish out of freedom whereas
we feel a sense of solidarity with them grounded in race, ethnicity and culture which tempers
class division. We recoil at the evisceration of the social fabric whereas conservatives
celebrate this blind march toward plutocracy.
Do the wealthy need to own a greater share of the stock market? Do they need to own a
greater share of our national wealth? Do we need to loosen up morals and the labor market? Do
we need more White children growing up in financially stressed, broken homes on Christmas? Is
the greatest problem facing the nation spending on anti-poverty programs? Paul Ryan and the
True Cons think so.
Yeah, I don't think so. I also think it is a good thing right now that we aren't associated
with the mainstream Right. In the long run, I bet this will pay off for us. I predict this
platform they have been standing on for decades now, which they call the conservative base, is
going to implode on them. Donald Trump was only the first sign that Atlas is about to
shrug.
(Republished from Occidental Dissent by permission of author or representative)
"... With the election of 2016, symptoms of the long emergency seeped into the political system. Disinformation rules. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. The two parties are mired in paralysis and dysfunction and the public's trust in them is at epic lows. Donald Trump is viewed as a sort of pirate president, a freebooting freak elected by accident, "a disrupter" of the status quo at best and at worst a dangerous incompetent playing with nuclear fire. A state of war exists between the White House, the permanent D.C. bureaucracy, and the traditional news media. Authentic leadership is otherwise AWOL. Institutions falter. The FBI and the CIA behave like enemies of the people. ..."
"... They chatter about electric driverless car fleets, home delivery drone services, and as-yet-undeveloped modes of energy production to replace problematic fossil fuels, while ignoring the self-evident resource and capital constraints now upon us and even the laws of physics -- especially entropy , the second law of thermodynamics. Their main mental block is their belief in infinite industrial growth on a finite planet, an idea so powerfully foolish that it obviates their standing as technocrats. ..."
"... The universities beget a class of what Nassim Taleb prankishly called "intellectuals-yet-idiots," hierophants trafficking in fads and falsehoods, conveyed in esoteric jargon larded with psychobabble in support of a therapeutic crypto-gnostic crusade bent on transforming human nature to fit the wished-for utopian template of a world where anything goes. In fact, they have only produced a new intellectual despotism worthy of Stalin, Mao Zedong, and Pol Pot. ..."
"... Until fairly recently, the Democratic Party did not roll that way. It was right-wing Republicans who tried to ban books, censor pop music, and stifle free expression. If anything, Democrats strenuously defended the First Amendment, including the principle that unpopular and discomforting ideas had to be tolerated in order to protect all speech. Back in in 1977 the ACLU defended the right of neo-Nazis to march for their cause (National Socialist Party of America v. Village of Skokie, 432 U.S. 43). ..."
"... This is the recipe for what we call identity politics, the main thrust of which these days, the quest for "social justice," is to present a suit against white male privilege and, shall we say, the horse it rode in on: western civ. A peculiar feature of the social justice agenda is the wish to erect strict boundaries around racial identities while erasing behavioral boundaries, sexual boundaries, and ethical boundaries. Since so much of this thought-monster is actually promulgated by white college professors and administrators, and white political activists, against people like themselves, the motives in this concerted campaign might appear puzzling to the casual observer. ..."
"... The evolving matrix of rackets that prompted the 2008 debacle has only grown more elaborate and craven as the old economy of stuff dies and is replaced by a financialized economy of swindles and frauds . Almost nothing in America's financial life is on the level anymore, from the mendacious "guidance" statements of the Federal Reserve, to the official economic statistics of the federal agencies, to the manipulation of all markets, to the shenanigans on the fiscal side, to the pervasive accounting fraud that underlies it all. Ironically, the systematic chiseling of the foundering middle class is most visible in the rackets that medicine and education have become -- two activities that were formerly dedicated to doing no harm and seeking the truth ! ..."
"... Um, forgotten by Kunstler is the fact that 1965 was also the year when the USA reopened its doors to low-skilled immigrants from the Third World – who very quickly became competitors with black Americans. And then the Boom ended, and corporate American, influenced by thinking such as that displayed in Lewis Powell's (in)famous 1971 memorandum, decided to claw back the gains made by the working and middle classes in the previous 3 decades. ..."
"... "Wow – is there ever negative!" ..."
"... You also misrepresent reality to your readers. No, the black underclass is not larger, more dysfunctional, and more alienated now than in the 1960's, when cities across the country burned and machine guns were stationed on the Capitol steps. The "racial divide" is not "starker now than ever"; that's just preposterous to anyone who was alive then. And nobody I've ever known felt "shame" over the "outcome of the civil rights campaign". I know nobody who seeks to "punish and humiliate" the 'privileged'. ..."
"... My impression is that what Kunstler is doing here is diagnosing the long crisis of a decadent liberal post-modernity, and his stance is not that of either of the warring sides within our divorced-from-reality political establishment, neither that of the 'right' or 'left.' Which is why, logically, he published it here. National Review would never have accepted this piece ..."
"... "Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class -- which included a great many white Americans who used to be able to support a family with simple labor." ..."
"... Young black people are told by their elders how lucky they are to grow up today because things are much better than when grandpa was our age and we all know this history.\ ..."
"... It's clear that this part of the article was written from absolute ignorance of the actual black experience with no interest in even looking up some facts. Hell, Obama even gave a speech at Howard telling graduates how lucky they were to be young and black Today compared to even when he was their age in the 80's! ..."
"... E.g. Germany. Germany is anything but perfect and its recent government has screwed up with its immigration policies. But Germany has a high standard of living, an educated work force (including unions and skilled crafts-people), a more rational distribution of wealth and high quality universal health care that costs 47% less per capita than in the U.S. and with no intrinsic need to maraud around the planet wasting gobs of taxpayer money playing Global Cop. ..."
"... The larger subtext is that the U.S. house of cards was planned out and constructed as deliberately as the German model was. Only the objective was not to maximize the health and happiness of the citizenry, but to line the pockets of the parasitic Elites. (E.g., note that Mitch McConnell has been a government employee for 50 years but somehow acquired a net worth of over $10 Million.) ..."
On America's 'long emergency' of recession, globalization, and identity politics.
Can a people recover from an excursion into unreality? The USA's sojourn into an alternative universe of the mind accelerated
sharply after Wall Street nearly detonated the global financial system in 2008. That debacle was only one manifestation of an array
of accumulating threats to the postmodern order, which include the burdens of empire, onerous debt, population overshoot, fracturing
globalism, worries about energy, disruptive technologies, ecological havoc, and the specter of climate change.
A sense of gathering crisis, which I call the long emergency , persists. It is systemic and existential. It calls into
question our ability to carry on "normal" life much farther into this century, and all the anxiety that attends it is hard for the
public to process. It manifested itself first in finance because that was the most abstract and fragile of all the major activities
we depend on for daily life, and therefore the one most easily tampered with and shoved into criticality by a cadre of irresponsible
opportunists on Wall Street. Indeed, a lot of households were permanently wrecked after the so-called Great Financial Crisis of 2008,
despite official trumpet blasts heralding "recovery" and the dishonestly engineered pump-up of capital markets since then.
With the election of 2016, symptoms of the long emergency seeped into the political system. Disinformation rules. There is
no coherent consensus about what is happening and no coherent proposals to do anything about it. The two parties are mired in paralysis
and dysfunction and the public's trust in them is at epic lows. Donald Trump is viewed as a sort of pirate president, a freebooting
freak elected by accident, "a disrupter" of the status quo at best and at worst a dangerous incompetent playing with nuclear fire.
A state of war exists between the White House, the permanent D.C. bureaucracy, and the traditional news media. Authentic leadership
is otherwise AWOL. Institutions falter. The FBI and the CIA behave like enemies of the people.
Bad ideas flourish in this nutrient medium of unresolved crisis. Lately, they actually dominate the scene on every side. A species
of wishful thinking that resembles a primitive cargo cult grips the technocratic class, awaiting magical rescue remedies that promise
to extend the regime of Happy Motoring, consumerism, and suburbia that makes up the armature of "normal" life in the USA.
They chatter
about electric driverless car fleets, home delivery drone services, and as-yet-undeveloped modes of energy production to replace
problematic fossil fuels, while ignoring the self-evident resource and capital constraints now upon us and even the laws of physics
-- especially entropy , the second law of thermodynamics. Their main mental block is their belief in infinite industrial growth
on a finite planet, an idea so powerfully foolish that it obviates their standing as technocrats.
The non-technocratic cohort of the thinking class squanders its waking hours on a quixotic campaign to destroy the remnant of
an American common culture and, by extension, a reviled Western civilization they blame for the failure in our time to establish
a utopia on earth. By the logic of the day, "inclusion" and "diversity" are achieved by forbidding the transmission of ideas, shutting
down debate, and creating new racially segregated college dorms. Sexuality is declared to not be biologically determined, yet so-called
cis-gendered persons (whose gender identity corresponds with their sex as detected at birth) are vilified by dint of
not being "other-gendered" -- thereby thwarting the pursuit of happiness of persons self-identified as other-gendered. Casuistry
anyone?
The universities beget a class of what Nassim Taleb prankishly called "intellectuals-yet-idiots," hierophants trafficking in fads
and falsehoods, conveyed in esoteric jargon larded with psychobabble in support of a therapeutic crypto-gnostic crusade bent on transforming
human nature to fit the wished-for utopian template of a world where anything goes. In fact, they have only produced a new intellectual
despotism worthy of Stalin, Mao Zedong, and Pol Pot.
In case you haven't been paying attention to the hijinks on campus -- the attacks on reason, fairness, and common decency, the
kangaroo courts, diversity tribunals, assaults on public speech and speakers themselves -- here is the key take-away: it's not about
ideas or ideologies anymore; it's purely about the pleasures of coercion, of pushing other people around. Coercion is fun and exciting!
In fact, it's intoxicating, and rewarded with brownie points and career advancement. It's rather perverse that this passion for tyranny
is suddenly so popular on the liberal left.
Until fairly recently, the Democratic Party did not roll that way. It was right-wing Republicans who tried to ban books, censor
pop music, and stifle free expression. If anything, Democrats strenuously defended the First Amendment, including the principle that
unpopular and discomforting ideas had to be tolerated in order to protect all speech. Back in in 1977 the ACLU defended the right
of neo-Nazis to march for their cause (National Socialist Party of America v. Village of Skokie, 432 U.S. 43).
The new and false idea that something labeled "hate speech" -- labeled by whom? -- is equivalent to violence floated out of the
graduate schools on a toxic cloud of intellectual hysteria concocted in the laboratory of so-called "post-structuralist" philosophy,
where sundry body parts of Michel Foucault, Jacques Derrida, Judith Butler, and Gilles Deleuze were sewn onto a brain comprised of
one-third each Thomas Hobbes, Saul Alinsky, and Tupac Shakur to create a perfect Frankenstein monster of thought. It all boiled down
to the proposition that the will to power negated all other human drives and values, in particular the search for truth. Under this
scheme, all human relations were reduced to a dramatis personae of the oppressed and their oppressors, the former generally
"people of color" and women, all subjugated by whites, mostly males. Tactical moves in politics among these self-described "oppressed"
and "marginalized" are based on the credo that the ends justify the means (the Alinsky model).
This is the recipe for what we call identity politics, the main thrust of which these days, the quest for "social justice," is
to present a suit against white male privilege and, shall we say, the horse it rode in on: western civ. A peculiar feature of the
social justice agenda is the wish to erect strict boundaries around racial identities while erasing behavioral boundaries, sexual
boundaries, and ethical boundaries. Since so much of this thought-monster is actually promulgated by white college professors and
administrators, and white political activists, against people like themselves, the motives in this concerted campaign might appear
puzzling to the casual observer.
I would account for it as the psychological displacement among this political cohort of their shame, disappointment, and despair
over the outcome of the civil rights campaign that started in the 1960s and formed the core of progressive ideology. It did not bring
about the hoped-for utopia. The racial divide in America is starker now than ever, even after two terms of a black president. Today,
there is more grievance and resentment, and less hope for a better future, than when Martin Luther King made the case for progress
on the steps of the Lincoln Memorial in 1963. The recent flash points of racial conflict -- Ferguson, the Dallas police ambush, the
Charleston church massacre, et cetera -- don't have to be rehearsed in detail here to make the point that there is a great deal of
ill feeling throughout the land, and quite a bit of acting out on both sides.
The black underclass is larger, more dysfunctional, and more alienated than it was in the 1960s. My theory, for what it's worth,
is that the civil rights legislation of 1964 and '65, which removed legal barriers to full participation in national life, induced
considerable anxiety among black citizens over the new disposition of things, for one reason or another. And that is exactly why
a black separatism movement arose as an alternative at the time, led initially by such charismatic figures as Malcolm X and Stokely
Carmichael. Some of that was arguably a product of the same youthful energy that drove the rest of the Sixties counterculture: adolescent
rebellion. But the residue of the "Black Power" movement is still present in the widespread ambivalence about making covenant with
a common culture, and it has only been exacerbated by a now long-running "multiculturalism and diversity" crusade that effectively
nullifies the concept of a national common culture.
What follows from these dynamics is the deflection of all ideas that don't feed a narrative of power relations between oppressors
and victims, with the self-identified victims ever more eager to exercise their power to coerce, punish, and humiliate their self-identified
oppressors, the "privileged," who condescend to be abused to a shockingly masochistic degree. Nobody stands up to this organized
ceremonial nonsense. The punishments are too severe, including the loss of livelihood, status, and reputation, especially in the
university. Once branded a "racist," you're done. And venturing to join the oft-called-for "honest conversation about race" is certain
to invite that fate.
Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class
-- which included a great many white Americans who used to be able to support a family with simple labor. Hung out to dry economically,
this class of whites fell into many of the same behaviors as the poor blacks before them: absent fathers, out-of-wedlock births,
drug abuse. Then the Great Financial Crisis of 2008 wiped up the floor with the middle-middle class above them, foreclosing on their
homes and futures, and in their desperation many of these people became Trump voters -- though I doubt that Trump himself truly understood
how this all worked exactly. However, he did see that the white middle class had come to identify as yet another victim group, allowing
him to pose as their champion.
The evolving matrix of rackets that prompted the 2008 debacle has only grown more elaborate and craven as the old economy of
stuff dies and is replaced by a financialized economy of swindles and frauds . Almost nothing in America's financial life
is on the level anymore, from the mendacious "guidance" statements of the Federal Reserve, to the official economic statistics of
the federal agencies, to the manipulation of all markets, to the shenanigans on the fiscal side, to the pervasive accounting fraud
that underlies it all. Ironically, the systematic chiseling of the foundering middle class is most visible in the rackets that medicine
and education have become -- two activities that were formerly dedicated to doing no harm and seeking the truth !
Life in this milieu of immersive dishonesty drives citizens beyond cynicism to an even more desperate state of mind. The suffering
public ends up having no idea what is really going on, what is actually happening. The toolkit of the Enlightenment -- reason, empiricism
-- doesn't work very well in this socioeconomic hall of mirrors, so all that baggage is discarded for the idea that reality is just
a social construct, just whatever story you feel like telling about it. On the right, Karl Rove expressed this point of view some
years ago when he bragged, of the Bush II White House, that "we make our own reality." The left says nearly the same thing in the
post-structuralist malarkey of academia: "you make your own reality." In the end, both sides are left with a lot of bad feelings
and the belief that only raw power has meaning.
Erasing psychological boundaries is a dangerous thing. When the rackets finally come to grief -- as they must because their operations
don't add up -- and the reckoning with true price discovery commences at the macro scale, the American people will find themselves
in even more distress than they've endured so far. This will be the moment when either nobody has any money, or there is plenty of
worthless money for everyone. Either way, the functional bankruptcy of the nation will be complete, and nothing will work anymore,
including getting enough to eat. That is exactly the moment when Americans on all sides will beg someone to step up and push them
around to get their world working again. And even that may not avail.
James Howard Kunstler's many books include The Geography of Nowhere, The Long Emergency, Too Much Magic: Wishful Thinking,
Technology, and the Fate of the Nation , and the World Made by Hand novel series. He blogs on Mondays and Fridays at
Kunstler.com .
I think I need to go listen to an old-fashioned Christmas song now.
The ability to be financially, or at least resource, sustaining is the goal of many I know since we share a lack of confidence
in any of our institutions. We can only hope that God might look down with compassion on us, but He's not in the practical plan
of how to feed and sustain ourselves when things play out to their inevitable end. Having come from a better time, we joke about
our dystopian preparations, self-conscious about our "overreaction," but preparing all the same.
Look at it this way: Germany had to be leveled and its citizens reduced to abject penury, before Volkswagen could become the world's
biggest car company, and autobahns built throughout the world. It will be darkest before the dawn, and hopefully, that light that
comes after, won't be the miniature sunrise of a nuclear conflagration.
An excellent summary and bleak reminder of what our so-called civilization has become. How do we extricate ourselves from this
strange death spiral?
I have long suspected that we humans are creatures of our own personal/group/tribal/national/global fables and mythologies. We
are compelled by our genes, marrow, and blood to tell ourselves stories of our purpose and who we are. It is time for new mythologies
and stories of "who we are". This bizarre hyper-techno all-for-profit world needs a new story.
"The black underclass is larger, more dysfunctional, and more alienated than it was in the 1960s. My theory, for what it's worth,
is that the civil rights legislation of 1964 and '65, which removed legal barriers to full participation in national life, induced
considerable anxiety among black citizens over the new disposition of things, for one reason or another."
Um, forgotten by Kunstler is the fact that 1965 was also the year when the USA reopened its doors to low-skilled immigrants
from the Third World – who very quickly became competitors with black Americans. And then the Boom ended, and corporate American,
influenced by thinking such as that displayed in Lewis Powell's (in)famous 1971 memorandum, decided to claw back the gains made
by the working and middle classes in the previous 3 decades.
Hey Jim, I know you love to blame Wall Street and the Republicans for the GFC. I remember back in '08 you were urging Democrats
to blame it all on Republicans to help Obama win. But I have news for you. It wasn't Wall Street that caused the GFC. The crisis
actually had its roots in the Clinton Administration's use of the Community Reinvestment Act to pressure banks to relax mortgage
underwriting standards. This was done at the behest of left wing activists who claimed (without evidence, of course) that the
standards discriminated against minorities. The result was an effective repeal of all underwriting standards and an explosion
of real estate speculation with borrowed money. Speculation with borrowed money never ends well.
I have to laugh, too, when you say that it's perverse that the passion for tyranny is popular on the left. Have you ever heard
of the French Revolution? How about the USSR? Communist China? North Korea? Et cetera.
Leftism is leftism. Call it Marxism, Communism, socialism, liberalism, progressivism, or what have you. The ideology is the
same. Only the tactics and methods change. Destroy the evil institutions of marriage, family, and religion, and Man's innate goodness
will shine forth, and the glorious Godless utopia will naturally result.
Of course, the father of lies is ultimately behind it all. "He was a liar and a murderer from the beginning."
When man turns his back on God, nothing good happens. That's the most fundamental problem in Western society today. Not to
say that there aren't other issues, but until we return to God, there's not much hope for improvement.
Hmm. I just wandered over here by accident. Being a construction contractor, I don't know enough about globalization, academia,
or finance to evaluate your assertions about those realms. But being in a biracial family, and having lived, worked, and worshiped
equally in white and black communities, I can evaluate your statements about social justice, race, and civil rights.
Long story short, you pick out fringe liberal ideas, misrepresent them as mainstream among liberals, and shoot them down. Casuistry,
anyone?
You also misrepresent reality to your readers. No, the black underclass is not larger, more dysfunctional, and more alienated
now than in the 1960's, when cities across the country burned and machine guns were stationed on the Capitol steps. The "racial
divide" is not "starker now than ever"; that's just preposterous to anyone who was alive then. And nobody I've ever known felt
"shame" over the "outcome of the civil rights campaign". I know nobody who seeks to "punish and humiliate" the 'privileged'.
I get that this column is a quick toss-off before the holiday, and that your strength is supposed to be in your presentation,
not your ideas. For me, it's a helpful way to rehearse debunking common tropes that I'll encounter elsewhere.
But, really, your readers deserve better, and so do the people you misrepresent. We need bad liberal ideas to be critiqued
while they're still on the fringe. But by calling fringe ideas mainstream, you discredit yourself, misinform your readers, and
contribute to stereotypes both of liberals and of conservatives. I'm looking for serious conservative critiques that help me take
a second look at familiar ideas. I won't be back.
I disagree, NoahK, that the whole is incohesive, and I also disagree that these are right-wing talking points.
The theme of this piece is the long crisis in the US, its nature and causes. At no point does this essay, despite it stream
of consciousness style, veer away from that theme. Hence it is cohesive.
As for the right wing charge, though it is true, to be sure, that Kunstler's position is in many respects classically conservative
-- he believes for example that there should be a national consensus on certain fundamentals, such as whether or not there are
two sexes (for the most part), or, instead, an infinite variety of sexes chosen day by day at whim -- you must have noticed that
he condemned both the voluntarism of Karl Rove AND the voluntarism of the post-structuralist crowd.
My impression is that what Kunstler is doing here is diagnosing the long crisis of a decadent liberal post-modernity, and his stance is not that of either
of the warring sides within our divorced-from-reality political establishment, neither that of the 'right' or 'left.' Which is
why, logically, he published it here. National Review would never have accepted this piece. QED.
This malaise is rooted in human consciousness that when reflecting on itself celebrating its capacity for apperception suffers
from the tension that such an inquiry, such an inward glance produces. In a word, the capacity for the human being to be aware
of his or herself as an intelligent being capable of reflecting on aspects of reality through the artful manipulation of symbols
engenders this tension, this angst.
Some will attempt to extinguish this inner tension through intoxication while others through the thrill of war, and it has
been played out since the dawn of man and well documented when the written word emerged.
The malaise which Mr. Kunstler addresses as the problem of our times is rooted in our existence from time immemorial. But the
problem is not only existential but ontological. It is rooted in our being as self-aware creatures. Thus no solution avails itself
as humanity in and of itself is the problem. Each side (both right and left) seeks its own anodyne whether through profligacy
or intolerance, and each side mans the barricades to clash experiencing the adrenaline rush that arises from the perpetual call
to arms.
"Globalization has acted, meanwhile, as a great leveler. It destroyed what was left of the working class -- the lower-middle class
-- which included a great many white Americans who used to be able to support a family with simple labor."
And to whom do we hand
the tab for this? Globalization is a word. It is a concept, a talking point. Globalization is oligarchy by another name. Unfortunately,
under-educated, deplorable, Americans; regardless of party affiliation/ideology have embraced. And the most ironic part?
Russia
and China (the eventual surviving oligarchies) will eventually have to duke it out to decide which superpower gets to make the
USA it's b*tch (excuse prison reference, but that's where we're headed folks).
And one more irony. Only in American, could Christianity,
which was grew from concepts like compassion, generosity, humility, and benevolence; be re-branded and 'weaponized' to further
greed, bigotry, misogyny, intolerance, and violence/war. Americans fiddled (over same sex marriage, abortion, who has to bake
wedding cakes, and who gets to use which public restroom), while the oligarchs burned the last resources (natural, financial,
and even legal).
"Today, there is more grievance and resentment, and less hope for a better future, than when Martin Luther King made the case
for progress on the steps of the Lincoln Memorial in 1963."
Spoken like a white guy who has zero contact with black people. I mean, even a little bit of research and familiarity would
give lie to the idea that blacks are more pessimistic about life today than in the 1960's.
Black millenials are the most optimistic group of Americans about the future. Anyone who has spent any significant time around
older black people will notice that you don't hear the rose colored memories of the past. Black people don't miss the 1980's,
much less the 1950's. Young black people are told by their elders how lucky they are to grow up today because things are much
better than when grandpa was our age and we all know this history.\
It's clear that this part of the article was written from absolute
ignorance of the actual black experience with no interest in even looking up some facts. Hell, Obama even gave a speech at Howard
telling graduates how lucky they were to be young and black Today compared to even when he was their age in the 80's!
Here is the direct quote;
"In my inaugural address, I remarked that just 60 years earlier, my father might not have been served in a D.C. restaurant
-- at least not certain of them. There were no black CEOs of Fortune 500 companies. Very few black judges. Shoot, as Larry Wilmore
pointed out last week, a lot of folks didn't even think blacks had the tools to be a quarterback. Today, former Bull Michael Jordan
isn't just the greatest basketball player of all time -- he owns the team. (Laughter.) When I was graduating, the main black hero
on TV was Mr. T. (Laughter.) Rap and hip hop were counterculture, underground. Now, Shonda Rhimes owns Thursday night, and Beyoncé
runs the world. (Laughter.) We're no longer only entertainers, we're producers, studio executives. No longer small business owners
-- we're CEOs, we're mayors, representatives, Presidents of the United States. (Applause.)
I am not saying gaps do not persist. Obviously, they do. Racism persists. Inequality persists. Don't worry -- I'm going to
get to that. But I wanted to start, Class of 2016, by opening your eyes to the moment that you are in. If you had to choose one
moment in history in which you could be born, and you didn't know ahead of time who you were going to be -- what nationality,
what gender, what race, whether you'd be rich or poor, gay or straight, what faith you'd be born into -- you wouldn't choose 100
years ago. You wouldn't choose the fifties, or the sixties, or the seventies. You'd choose right now. If you had to choose a time
to be, in the words of Lorraine Hansberry, "young, gifted, and black" in America, you would choose right now. (Applause.)"
I love reading about how the Community Reinvestment Act was the catalyst of all that is wrong in the world. As someone in the
industry the issue was actually twofold. The Commodities Futures Modernization Act turned the mortgage securities market into
a casino with the underlying actual debt instruments multiplied through the use of additional debt instruments tied to the performance
but with no actual underlying value. These securities were then sold around the world essentially infecting the entire market.
In order that feed the beast, these NON GOVERNMENT loans had their underwriting standards lowered to rediculous levels. If you
run out of qualified customers, just lower the qualifications. Government loans such as FHA, VA, and USDA were avoided because
it was easier to qualify people with the new stuff. And get paid. The short version is all of the incentives that were in place
at the time, starting with the Futures Act, directly led to the actions that culminated in the Crash. So yes, it was the government,
just a different piece of legislation.
Kunstler itemizing the social and economic pathologies in the United States is not enough. Because there are other models that
demonstrate it didn't have to be this way.
E.g. Germany. Germany is anything but perfect and its recent government has screwed up with its immigration policies. But Germany
has a high standard of living, an educated work force (including unions and skilled crafts-people), a more rational distribution
of wealth and high quality universal health care that costs 47% less per capita than in the U.S. and with no intrinsic need to
maraud around the planet wasting gobs of taxpayer money playing Global Cop.
The larger subtext is that the U.S. house of cards was planned out and constructed as deliberately as the German model was.
Only the objective was not to maximize the health and happiness of the citizenry, but to line the pockets of the parasitic Elites.
(E.g., note that Mitch McConnell has been a government employee for 50 years but somehow acquired a net worth of over $10 Million.)
P.S. About the notionally high U.S. GDP. Factor out the TRILLIONS inexplicably hoovered up by the pathological health care
system, the metastasized and sanctified National Security State (with its Global Cop shenanigans) and the cronied-up Ponzi scheme
of electron-churn financialization ginned up by Goldman Sachs and the rest of the Banksters, and then see how much GDP that reflects
the actual wealth of the middle class is left over.
Right-Wing Dittoheads and Fox Watchers love to blame the Community Reinvestment Act. It allows them to blame both poor black people
AND the government. The truth is that many parties were to blame.
One of the things I love about this rag is that almost all of the comments are included.
You may be sure that similar commenting privilege doesn't exist most anywhere else.
Any disfavor regarding the supposed bleakness with the weak hearted souls aside, Mr K's broadside seems pretty spot on to me.
I think the author overlooks the fact that government over the past 30 to 40 years has been tilting the playing field ever more
towards the uppermost classes and against the middle class. The evisceration of the middle class is plain to see.
If the the common man had more money and security, lots of our current intrasocial conflicts would be far less intense.
Andrew Imlay: You provide a thoughtful corrective to one of Kunstler's more hyperbolic claims. And you should know that his jeremiad
doesn't represent usual fare at TAC. So do come back.
Whether or not every one of Kunstler's assertions can withstand a rigorous fact-check, he is a formidable rhetorician. A generous
serving of Weltschmerz is just what the season calls for.
America is stupefied from propaganda on steroids for, largely from the right wing, 25? years of Limbaugh, Fox, etc etc etc Clinton
hate x 10, "weapons of mass destruction", "they hate us because we are free", birtherism, death panels, Jade Helm, pedophile pizza, and more Clinton hate porn.
Americans have been taught to worship the wealthy regardless of how they got there. Americans have been taught they are "Exceptional" (better, smarter, more godly than every one else) in spite of outward appearances.
Americans are under educated and encouraged to make decisions based on emotion from constant barrage of extra loud advertising
from birth selling illusion.
Americans brain chemistry is most likely as messed up as the rest of their bodies from junk or molested food. Are they even
capable of normal thought?
Donald Trump has convinced at least a third of Americans that only he, Fox, Breitbart and one or two other sources are telling
the Truth, every one else is lying and that he is their friend.
Is it possible we are just plane doomed and there's no way out?
I loathe the cotton candy clown and his Quislings; however, I must admit, his presence as President of the United States has forced
everyone (left, right, religious, non-religious) to look behind the curtain. He has done more to dis-spell the idealism of both
liberal and conservative, Democrat and Republican, rich and poor, than any other elected official in history. The sheer amount
of mind-numbing absurdity resulting from a publicity stunt that got out of control ..I am 70 and I have seen a lot. This is beyond
anything I could ever imagine. America is not going to improve or even remain the same. It is in a 4 year march into worse, three
years to go.
Mr. Kuntzler has an honest and fairly accurate assessment of the situation. And as usual, the liberal audience that TAC is trying
so hard to reach, is tossing out their usual talking points whilst being in denial of the situation.
The Holy Bible teaches us that repentance is the first crucial step on the path towards salvation. Until the progressives,
from their alleged "elite" down the rank and file at Kos, HuffPo, whatever, take a good, long, hard look at the current national
dumpster fire and start claiming some responsibility, America has no chance of solving problems or fixing anything.
Kunstler must have had a good time writing this, and I had a good time reading it. Skewed perspective, wild overstatement, and
obsessive cherry-picking of the rare checkable facts are mixed with a little eye of newt and toe of frog and smothered in a oar
and roll of rhetoric that was thrilling to be immersed in. Good work!
aah, same old Kunstler, slightly retailored for the Trump years.
for those of you familiar with him, remember his "peak oil" mania from the late 00s and early 2010s? every blog post was about
it. every new year was going to be IT: the long emergency would start, people would be Mad Maxing over oil supplies cos prices
at the pump would be $10 a gallon or somesuch.
in this new rant, i did a control-F for "peak oil" and hey, not a mention. I guess even cranks like Kunstler know when to give
a tired horse a rest.
Kunstler once again waxes eloquent on the American body politic. Every word rings true, except when it doesn't. At times poetic,
at other times paranoid, Kunstler does us a great service by pointing a finger at the deepest pain points in America, any one
of which could be the geyser that brings on catastrophic failure.
However, as has been pointed out, he definitely does not hang out with black people. For example, the statement:
But the residue of the "Black Power" movement is still present in the widespread ambivalence about making covenant with a common
culture, and it has only been exacerbated by a now long-running "multiculturalism and diversity" crusade that effectively nullifies
the concept of a national common culture.
The notion of a 'national common culture' is interesting but pretty much a fantasy that never existed, save colonial times.
Yet Kunstler's voice is one that must be heard, even if he is mostly tuning in to the widespread radicalism on both ends of
the spectrum, albeit in relatively small numbers. Let's face it, people are in the streets marching, yelling, and hating and mass
murders keep happening, with the regularity of Old Faithful. And he makes a good point about academia loosing touch with reality
much of the time. He's spot on about the false expectations of what technology can do for the economy, which is inflated with
fiat currency and God knows how many charlatans and hucksters. And yes, the white working class is feeling increasingly like a
'victim group.'
While Kunstler may be more a poet than a lawyer, more songwriter than historian, my gut feeling is that America had better
take notice of him, as The American ship of state is being swept by a ferocious tide and the helmsman is high on Fentanyl (made
in China).
Re: The crisis actually had its roots in the Clinton Administration's use of the Community Reinvestment Act
Here we go again with this rotting zombie which rises from its grave no matter how many times it has been debunked by statisticians
and reputable economists (and no, not just those on the left– the ranks include Bruce Bartlett for example, a solid Reaganist).
To reiterate again : the CRA played no role in the mortgage boom and bust. Among other facts in the way of that hypothesis is
the fact that riskiest loans were being made by non-bank lenders (Countrywide) who were not covered by the CRA which only applied
to actual banks– and the banks did not really get into the game full tilt, lowering their lending standards, until late in the
game, c. 2005, in response to their loss of business to the non-bank lenders. Ditto for the GSEs, which did not lower their standards
until 2005 and even then relied on wall Street to vet the subprime loans they were buying.
To be sure, blaming Wall Street for everything is also wrong-headed, though wall Street certainly did some stupid, greedy and
shady things (No, I am not letting them off the hook!) But the cast of miscreants is numbered in the millions and it stretches
around the planet. Everyone (for example) who got into the get-rich-quick Ponzi scheme of house flipping, especially if they lied
about their income to do so. And everyone who took out a HELOC (Home Equity Line of Credit) and foolishly charged it up on a consumption
binge. And shall we talk about the mortgage brokers who coached people into lying, the loan officers who steered customers into
the riskiest (and highest earning) loans they could, the sellers who asked palace-prices for crackerbox hovels, the appraisers
who rubber-stamped such prices, the regulators who turned a blind eye to all the fraud and malfeasance, the ratings agencies who
handed out AAA ratings to securities full of junk, the politicians who rejoiced over the apparent "Bush Boom" well, I could continue,
but you get the picture.
"The Holy Bible teaches us that repentance is the first crucial step on the path towards salvation. Until the progressives, from
their alleged "elite" down the rank and file at Kos, HuffPo, whatever, take a good, long, hard look at the current national dumpster
fire and start claiming some responsibility, America has no chance of solving problems or fixing anything."
Pretty sure that calling other people to repent of their sin of disagreeing with you is not quite what the Holy Bible intended.
Nice illustration of ideologically based ostrakism as practiced in Academia: "Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could
be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People
- powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize
other insiders."
Notable quotes:
"... A more probable school of thought is that this game was created as a con and a cover for the status quo capitalist establishment to indulge themselves in their hard money and liquidity fetishes, consequences be damned. ..."
"... The arguments over internal and external consistency of models is just a convenient misdirection from what policy makers are willing to risk and whose interests they are willing to risk policy decisions for ..."
"... Mathematical masturbations are just a smoke screen used to conceal a simple fact that those "economists" are simply banking oligarchy stooges. Hired for the specific purpose to provide a theoretical foundation for revanschism of financial oligarchy after New Deal run into problems. Revanschism that occurred in a form of installing neoliberal ideology in the USA in exactly the same role which Marxism was installed in the USSR. With "iron hand in velvet gloves" type of repressive apparatus to enforce it on each and every university student and thus to ensure the continues, recurrent brainwashing much like with Marxism on the USSR universities. ..."
"... To ensure continuation of power of "nomenklatura" in the first case and banking oligarchy in the second. Connections with reality be damned. Money does not smell. ..."
"... Economic departments fifth column of neoliberal stooges is paid very good money for their service of promoting and sustaining this edifice of neoliberal propaganda. Just look at Greg Mankiw and Rubin's boys. ..."
"... "Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People - powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize other insiders." ..."
At the risk of oversimplifying might it not be as simple as stronger leanings towards IS-LM and kind are indicative of a bias
towards full employment and stronger leanings towards DSGE, microfoundations, and kind are indicative of a bias towards low inflation?
IN general I consider over-simplification a fault, if and only if, it is a rigidly adhered to final position. This is to say
that over-simplification is always a good starting point and never a good ending point. If in the end your problem was simple
to begin with, then the simplified answer would not be OVER-simplified anyway. It is just as bad to over-complicate a simple problem
as it is to over-simplify a complex problem. It is easier to build complexity on top of a simple foundation than it is to extract
simplicity from a complex foundation.
A lot of the Chicago School initiative into microfoundations and DSGE may have been motivated by a desire to bind Keynes in
a NAIRU straight-jacket. Even though economic policy making is largely done just one step at a time then that is still one step
too much if it might violate rentier interests.
Darryl FKA Ron -> Barry...
There are two possible (but unlikely) schools of (generously attributed to as) thought for which internal consistency might
take precedence over external consistency. One such school wants to consider what would be best in a perfect world full of perfect
people and then just assume that is best for the real world just to let the chips fall where they may according to the faults
and imperfections of the real world. The second such school is the one whose eyes just glaze over mesmerized by how over their
heads they are and remain affraid to ask any question lest they appear stupid.
A more probable school of thought is that this game was created as a con and a cover for the status quo capitalist establishment
to indulge themselves in their hard money and liquidity fetishes, consequences be damned.
Richard H. Serlin
Consistency sounds so good, Oh, of course we want consistency, who wouldn't?! But consistent in what way? What exactly do you
mean? Consistent with reality, or consistent with people all being superhumans? Which concept is usually more useful, or more
useful for the task at hand?
Essentially, they want models that are consistent with only certain things, and often because this
makes their preferred ideology look far better. They want models, typically, that are consistent with everyone in the world having
perfect expertise in every subject there is, from finance to medicine to engineering, perfect public information, and perfect
self-discipline, and usually on top, frictionless and perfectly complete markets, often perfectly competitive too.
But a big thing to note is that perfectly consistent people means a level of perfection in expertise, public information, self-discipline,
and "rationality", that's extremely at odds with how people actually are. And as a result, this can make the model extremely misleading
if it's interpreted very literally (as so often it is, especially by freshwater economists), or taken as The Truth, as Paul Krugman
puts it.
You get things like the equity premium "puzzle", which involves why people don't invest more in stocks when the risk-adjusted
return appears to usually be so abnormally good, and this "puzzle" can only be answered with "consistency", that people are all
perfectly expert in finance, with perfect information, so they must have some mysterious hidden good reason. It can't be at all
that it's because 65% of people answered incorrectly when asked how many reindeer would remain if Santa had to lay off 25% of
his eight reindeer ( http://richardhserlin.blogspot.com/2013/12/surveys-showing-massive-ignorance-and.html ).
Yes, these perfect optimizer consistency models can give useful insights, and help to see what is best, what we can do better,
and they can, in some cases, be good as approximations. But to say they should be used only, and interpreted literally, is, well,
inconsistent with optimal, rational behavior -- of the economist using them.
Richard H. Serlin -> Richard H. Serlin...
Of course, unless the economist using them is doing so to mislead people into supporting his libertarian/plutocratic ideology.
dilbert dogbert
As an old broken down mech engineer, I wonder why all the pissing and moaning about micro foundations vs aggregation. In strength
of materials equations that aggregate properties work quite well within the boundaries of the questions to be answered. We all
know that at the level of crystals, materials have much complexity. Even within crystals there is deeper complexities down to
the molecular levels. However, the addition of quantum mechanics adds no usable information about what materials to build a bridge
with.
But, when working at the scale of the most advanced computer chips quantum mechanics is required. WTF! I guess in economics
there is no quantum mechanics theories or even reliable aggregation theories.
Poor economists, doomed to argue, forever, over how many micro foundations can dance on the head of a pin.
RGC -> dilbert dogbert...
Endless discussions about how quantum effects aggregate to produce a material suitable for bridge building crowd out discussions
about where and when to build bridges. And if plutocrats fund the endless discussions, we get the prominent economists we have
today.
Darryl FKA Ron -> dilbert dogbert...
"...I guess in economics there is no quantum mechanics theories or even reliable aggregation theories..."
[I guess it depends upon what your acceptable confidence interval on reliability is. Most important difference that controls
all the domain differences between physical science and economics is that underlying physical sciences there is a deterministic
methodology for which probable error is merely a function of the inaccuracy in input metrics WHEREAS economics models are incomplete
probabilistic estimating models with no ability to provide a complete system model in a full range of circumstances.
YOu can design and build a bridge to your load and span requirements with alternative models for various designs with confidence
and highly effective accuracy repeatedly. No ecomomic theory, model, or combination of models and theories was ever intended to
be used as the blueprint for building an economy from the foundation up.
With all the formal trappings of economics the only effective usage is to decide what should be done in a given set of predetermined
circumstance to reach some modest desired effect. Even that modest goal is exposed to all kinds of risks inherent in assumptions,
incomplete information, externalities, and so on that can produce errors of uncertain potential bounds.
Nonetheless, well done economics can greatly reduce the risks encountered in the random walk of economics policy making. So
much so is this true, that the bigger questions in macro-economics policy making is what one is willing to risk and for whom.
The arguments over internal and external consistency of models is just a convenient misdirection from what policy makers
are willing to risk and whose interests they are willing to risk policy decisions for.]
Darryl FKA Ron -> Peter K....
unless you have a model which maps the real world fairly closely like quantum mechanics.
[You set a bar too high. Macro models at best will tell you what to do to move the economy in the direction that you seek to
go. They do not even ocme close to the notion of a theory of everything that you have in physics, even the theory of every little
thing that is provided by quantum mechanics. Physics is an empty metaphor for economics. Step one is to forgo physics envy in
pursuit of understanding suitable applications and domain constraints for economics models.
THe point is to reach a decision and to understand cause and effect directions. All precision is in the past and present. The
future is both imprecise and all that there is that is available to change.
For the most part an ounce of common sense and some simple narrative models are all that are essential for making those policy
decisions in and of themselves. HOWEVER, nation states are not ruled by economist philosopher kings and in the process of concensus
decision making by (little r)republican governments then human language is a very imprecise vehicle for communicating logic and
reason with respect to the management of complex systems. OTOH, mathematics has given us a universal language for communicating
logic and reason that is understood the same by everyone that really understands that language at all. Hence mathematical models
were born for the economists to write down their own thinking in clear precise terms and check their own work first and then share
it with others so equipped to understand the language of mathematics. Krugman has said as much many times and so has any and every
economist worth their salt.]
likbez -> Syaloch...
I agree with Pgl and PeterK. Certain commenters like Darryl seem convinced that the Chicago School (if not all of econ) is driven
by sinister, class-based motives to come up justifications for favoring the power elite over the masses. But based on what I've
read, it seems pretty obvious that the microfoundation guys just got caught up in their fancy math and their desire to produce
more elegant, internally consistent models and lost sight of the fact that their models didn't track reality.
That's completely wrong line of thinking, IMHO.
Mathematical masturbations are just a smoke screen used to conceal a simple fact that those "economists" are simply banking
oligarchy stooges. Hired for the specific purpose to provide a theoretical foundation for revanschism of financial oligarchy after
New Deal run into problems. Revanschism that occurred in a form of installing neoliberal ideology in the USA in exactly the same
role which Marxism was installed in the USSR.
With "iron hand in velvet gloves" type of repressive apparatus to enforce it on each and every university student and thus to
ensure the continues, recurrent brainwashing much like with Marxism on the USSR universities.
To ensure continuation of power of "nomenklatura" in the first case and banking oligarchy in the second. Connections with reality
be damned. Money does not smell.
Economic departments fifth column of neoliberal stooges is paid very good money for their service of promoting and sustaining
this edifice of neoliberal propaganda. Just look at Greg Mankiw and Rubin's boys.
But the key problem with neoliberalism is that the cure is worse then disease. And here mathematical masturbations are very
handy as a smoke screen to hide this simple fact.
likbez -> likbez...
Here is how Rubin's neoliberal boy Larry explained the situation to Elizabeth Warren:
"Larry [Summers] leaned back in his chair and offered me some advice. I had a choice. I could be an insider or I could
be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People
- powerful people - listen to what they have to say. But insiders also understand one unbreakable rule: they don't criticize
other insiders."
"... The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse. ..."
"... It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been quick to vote for far-right Republicans antagonistic to the social safety net. ..."
"... Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does. ..."
"... As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill." ..."
"... Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would also imperil Americans 65 and over by cutting $25 billion from Medicare . ..."
"... Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones. ..."
"... Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s for freelance work. ..."
"... The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington, D.C. Median rents for one-bedroom apartments are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha, according to ApartmentList.com. ..."
"... yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can. ..."
"... Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue. ..."
"... Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services, social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent counterpoint enemy. ..."
"... The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the idea that the physical possession of material things is all that matters. Sheeple, yes. ..."
"... Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies. 19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not can, but will) become wealthy. Most Americans can't find France on a map. ..."
"... I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see just how flawed America is from the inside but when you step outside and have some perspective, it's frightening. ..."
"... Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much of their investment included creating the right wing media apparatus. ..."
"... The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits the rich financially, and by extension enhances their power politically. ..."
"... "Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125 ..."
"... yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me. ..."
"... As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly suspect not. ..."
"... This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because, you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others about what opinion to have, is about the limit of what they are willing, or know how to do. ..."
Yves here. I imagine many readers are acutely aware of the problems outlined in this article, if not beset by them already. By
any rational standard, I should move now to a much cheaper country that will have me. I know individuals who live most of the year
in third-world and near-third world countries, but they have very cheap ways of still having a toehold in the US and not (yet or
maybe ever) getting a long-term residence visa. Ecuador is very accommodating regarding retirement visas, and a Social Security level
income goes far there, but yours truly isn't retiring any time soon. And another barrier to an international move (which recall I
did once, so I have some appreciation for what it takes), is that one ought to check out possible destinations but if you are already
time and money and energy stressed, how do you muster the resources to do that at all, let alone properly?
Aside from the potential to greatly reduce fixed costs, a second impetus for me is Medicare. I know for most people, getting on
Medicare is a big plus. I have a very rare good, very old insurance policy. When you include the cost of drug plans, Medicare is
no cheaper than what I have now, and considerably narrows my network. Moreover, I expect it to be thoroughly crapified by ten years
from now (when I am 70), which argues for getting out of Dodge sooner rather than later.
And that's before you get to another wee problem Lambert points out that I would probably not be happy in a third world or high
end second world country. But the only bargain "world city" I know of is Montreal. I'm not sure it would represent enough of an all-in
cost saving to justify the hassle of an international move and the attendant tax compliance burdens .and that charitably assumes
I could even find a way to get permanent residence. Ugh.
By Alex Henderson, who has written for the L.A. Weekly, Billboard, Spin, Creem, the Pasadena Weekly and many other publications.
Follow him on Twitter @alexvhenderson. Originally published at
Alternet
Millions can no longer afford to retire, and may never be able when the GOP passes its tax bill.
The news is not good for millions of aging Baby Boomers and Gen Xers in the United States who are moving closer to retirement
age. According to the Employee Benefit Research Institute's annual report on retirement preparedness for 2017, only 18 percent of
U.S.-based workers feel "very confident" about their
ability to retire comfortably ; Craig Copeland,
senior research associate for EBRI and the report's co-author, cited "debt, lack of a retirement plan at work, and low savings" as
"key factors" in workers' retirement-related anxiety. The Insured Retirement Institute finds a mere 23 percent of Baby Boomers and
24 percent of Gen Xers are confident that their savings will last in retirement. To make matters worse, more than 40 percent of Boomers
and over 30 percent of Gen Xers report having
no retirement savings whatsoever .
The U.S. has a
retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well
as dozens of state governments, things promise to grow immeasurably worse.
It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took
important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of
his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the
country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been
quick to vote for far-right Republicans antagonistic to the social safety net.
In the 2016 presidential election, 55 percent of voters 50 and older
cast their ballots for Donald Trump
against just 44 percent for Hillary Clinton. (This was especially true of older white voters; 90 percent of black voters 45 and older,
as well as 67 percent of Latino voters in the same age range voted Democratic.)
Sen. Bernie Sanders' (I-VT) economic proposals may have been wildly popular with millennials, but no demographic has a greater
incentive to vote progressive than Americans facing retirement. According to research conducted by the American Association of Retired
Persons, the three greatest concerns of Americans 50 and older are Social Security, health care costs and caregiving for loved ones
-- all areas that have been targeted by Republicans.
House of Representatives Speaker Paul Ryan, a
devotee of social Darwinist Ayn Rand , has made no secret of his desire to
privatize
Social Security and replace traditional Medicare with a voucher program. Had George W. Bush had his way and turned Social Security
over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless.
Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively
than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of
workers are confident the program will continue to provide the level of benefits it currently does.
The GOP's obsession with abolishing the Affordable Care Act is the most glaring example of its disdain for aging Americans. Yet
Obamacare has been a blessing for Boomers and Gen Xers who have preexisting conditions. The ACA's guaranteed issue plans make no
distinction between a 52-year-old American with diabetes, heart disease or asthma and a 52-year-old who has never had any of those
illnesses. And AARP notes that under the ACA, the uninsured rate for Americans 50 and older decreased from 15 percent in 2013 to
9 percent in 2016.
According to the Congressional Budget Office, the replacement bills Donald Trump hoped to ram through Congress this year would
have resulted in staggering
premium hikes for Americans over 50. The CBO's analysis of the American Health Care Act, one of the earlier versions of Trumpcare,
showed that a 64-year-old American making $26,500 per year could have gone from paying $1,700 annually in premiums to just over $16,000.
The CBO also estimated that the GOP's American Health Care Act would have deprived
23 million Americans of health insurance by 2026.
As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax
reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause
higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at
particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill."
The CBO estimates that the bill will cause premiums to spike an average of 10 percent overall, with average premiums increasing
$890 per year for a 50-year-old, $1,100 per year for a 55-year-old, $1,350 per year for a 60-year-old and $1,490 per year for a 64-year-old.
Premium increases, according to the CBO, would vary from state to state; in Maine, average premiums for a 64-year-old would rise
as much as $1,750 per year.
Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax
Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would
also imperil Americans 65 and over by
cutting $25 billion from
Medicare .
As morally reprehensible as the GOP's tax legislation may be, it is merely an acceleration of the redistribution of wealth from
the bottom to the top that America has undergone since the mid-1970s. (President Richard Nixon may have been a paranoid right-winger
with authoritarian tendencies, but he expanded Medicare and supported universal health care.) Between the decline of labor unions,
age discrimination, stagnant wages, an ever-rising cost of living, low interest rates, and a shortage of retirement accounts, millions
of Gen Xers and Baby Boomers may never be able to retire.
Traditional
defined-benefit
pensions were once a mainstay of American labor, especially among unionized workers. But according to Pew Charitable Trusts,
only
13 percent of Baby Boomers still have them (among millennials, the number falls to 6 percent). In recent decades, 401(k) plans
have become much more prominent, yet a majority of American workers don't have them either.
Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent
of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought
to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were
carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones.
Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s
for freelance work. Tax-deferred SEP-IRAs were once a great, low-risk way for freelancers to save for retirement without relying
exclusively on Social Security, but times have changed since the 1980s and '90s when interest rates were considerably higher for
certificates of deposit and savings accounts. According to Bankrate.com,
average rates for one-year
CDs dropped from 11.27 percent in 1984 to 8.1 percent in 1990 to 5.22 percent in 1995 to under 1 percent in 2010, where it currently
remains.
The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are
trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of
housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington,
D.C. Median rents for one-bedroom apartments
are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha,
according to ApartmentList.com.
That so many older Americans are renting at all is ominous in its own right. FDR made home ownership a primary goal of the New
Deal, considering it a key component of a thriving middle class. But last year, the Urban Institute found that 19 million Americans
who previously owned a home are now renting, 31 percent between the ages of 36 and 45. Laurie Goodman, one of the study's authors,
contends the Great Recession has "permanently raised the number of renters," and that the explosion of foreclosures has hit Gen Xers
especially hard.
The severity of the U.S. retirement crisis is further addressed in journalist
Jessica Bruder's new book
"Nomadland: Surviving America in the 21st Century," which follows Americans in their 50s, 60s and even 70s
living in RVs or vans , barely eking out a living doing
physically demanding, seasonal temp work from harvesting sugar beets to cleaning toilets at campgrounds. Several had high-paying
jobs before their lives were blown apart by the layoffs, foreclosures and corporate downsizing of the Great Recession. Bruder speaks
with former college professors and software professionals who now find themselves destitute, teetering on the brink of homelessness
and forced to do backbreaking work for next to nothing. Unlike the big banks, they never received a bailout.
These neo-nomads recall the transients of the 1930s, themselves victims of Wall Street's recklessness. But whereas FDR won in
a landslide in 1932 and aggressively pursued a program of progressive economic reforms, Republicans in Congress have set out to shred
what little remains of the social safety net, giving
huge tax breaks
to millionaires and billionaires . The older voters who swept Trump into office may have signed their own death warrants.
If aging Americans are going to be saved from this dystopian future, the U.S. will have to forge a new Great Society. Programs
like Social Security, Medicare and Medicaid will need to be strengthened, universal health care must become a reality and age discrimination
in the workplace will have to be punished as a civil rights violation like racial and gender-based discrimination. If not, millions
of Gen Xers and Boomers will spend their golden years scraping for pennies.
I certainly will never go back to the States for these and other reasons. I have a friend, also an American citizen, who travels
frequently back to California to visit his son. He is truly worried about getting sick or having an accident when he is there
since he knows it might bankrupt him. As he jokes, he would be happy to have another heart attack here in France since it's free!
For those of you who have traveled the world and talked to people, you probably know that most foreigners are perplexed by
America's attitude to health care and social services. The richest nation in the world thinks that health and social security
(in the larger sense of not being forced into the street) are not rights at all. Europeans scratch their heads at this.
The only solution is education and information, but they are appalling in America. America remains the most ignorant and worst
educated of the developed nations and is probably beaten by many developing nations. It is this ignorance and stupidity that gets
Americans to vote for the likes of Trump or any of the other rapacious millionaires they send to office every year.
A first step would be for Americans to insist that Congress eliminate its incredibly generous and life-long healthcare plans
for elected officials. They should have to do what the rest of Americans do. Of course, since about 95% of Congress are millionaires,
it might not be effective. But it's a start.
France has its share of problems, but boy do they pale next to the problems in America or even Canada. Life here is overall
quite pleasant and I have no desire to go back to N.A.
yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is
less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can.
The newest neoliberal effort in Canada was put forward by our
Minister of Finance (a millionaire) who is touting a bill that will get rid of defined benefit pension plans given to public
employees for so-called target benefit pension plans. The risk for target plans is taken by the recipient. Morneau's former firm
promotes target benefit pension plans and the change could benefit Morneau himself as he did not put his assets from his firm
in a blind trust. At the very least, he has a conflict of interest and should probably resign.
There is always an insidious group of wealthy people here who would like to re-make the world in their own image. I fear for
the future.
Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits
now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue.
We really should be able to turn this around, and have an obligation to ourselves and our 'nation state' , IF there were a
group of folks running on a fairness, one-for-all, all-for-one platform. That sure isn't the present two-sides-of-the-same-coin
Democraps and Republicrunts.
Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are
as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services,
social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent
counterpoint enemy.
Check it out, and be vigilant in dispelling his message and mission. Thanks for running this article.
Running away: the almost-haves run to another nation state, the uber-wealthy want to leave the earth, or live in their private
Idaho in the Rockies or on the Ocean. What's left for the least among us? Whatever we create? https://www.pgpf.org/
I think pathologically optimistic is a better term than complacent. Every time someone dumps on them, their response is usually
along the lines of "Don't worry, it'll get better," "Everything works itself out in the end," "maybe we'll win the lottery," my
personal favorite "things will get better, just give it time" (honestly it's been 40 years of this neoliberal bullcrap, how much
more time are we supposed to give it?), "this is just a phase" or "we can always bring it back later and better than ever." The
last one is most troubling because after 20 years of witnessing things in the public sphere disappearing, I've yet to see a single
thing return in any form at all.
I'm not sure where this annoying optimism came from but I sure wish it would go away.
The "optimism" comes from having a lack of historical memory. So many social protections that we have/had is seen as somehow
coming out of the ether benevolently given without any social struggles. The lack of historical education on this subject in particular
is appalling. Now, most would probably look for an "APP" on their "dumbphones" to solve the problem.
The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants
blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many
others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the
idea that the physical possession of material things is all that matters. Sheeple, yes.
WOW! You must have been outside the U.S. for a long time. Your comment seems to suggest we still have some kind of democracy
here. We don't get to pick which rapacious millionaires we get to vote for and it doesn't matter any way since whichever one we
pick from the sad offerings ends up with policies dictated from elsewhere.
Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies.
19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not
can, but will) become wealthy. Most Americans can't find France on a map.
So, yes, you DO get to pick your rapacious millionaire. You send the same scumbags back to Washington every year because it's
not him, it the other guys who are the problem. One third of Americans support Trump! Really, really support him. They think he
is Jesus, MacArthur and Adam Smith all rolled up into one.
I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see
just how flawed America is from the inside but when you step outside and have some perspective, it's frightening.
The Democrat party isn't a reform party. Thinking it is so, is because of the "No Other Choice" meme. Not saying that the Republican
party works in my favor. They don't. Political reform goes deeper than reforming either main party. It means going to a European
plurality system (with its own downside). That way growing Third parties will be viable, if they have popular, as opposed to millionaire,
support. I don't see this happening, because of Citizens United, but if all you have is hope, then you have to go with that.
Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might
have left millions of senior citizens homeless.
Substitute Bill Clinton for George Bush in that sentence and it works just as well. Neoliberalism is a bipartisan project.
And many of the potential and actual horrors described above arise from the price distortions of the US medical system with
Democratic acquiescence in said system making things worse. The above article reads like a DNC press release.
And finally while Washington politicians of both parties have been threatening Social Security for years that doesn't mean
its third rail status has been repealed. The populist tremors of the last election -- which have caused our elites to lose their
collective mind -- could be a mere prelude to what will happen in the event of a full scale assault on the safety net.
Substitute Obama's quest for a Grand Bargain as well.
Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that
their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much
of their investment included creating the right wing media apparatus.
The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives
welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that
benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits
the rich financially, and by extension enhances their power politically.
If retirees flee our country that will certainly please the Conservatives as that will be fewer critics (enemies). Also less
need or demand for social programs.
"Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished
period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing
[a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125
yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary
will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me.
"President Richard Nixon may have been a paranoid right-winger with authoritarian tendencies, but he expanded Medicare and
supported universal health care."
"Gimme that old time Republican!"
One of the reasons I love NC is that most political economic analysis is often more harsh on the Democrats than the Repubs
so I am a bit dismayed how this article is way too easy on Team D. How many little (and not so little) knives in the back from
Clinton and Obama? Is a knife in the chest that much worse?
This entire thread is simply heartbreaking, Americans have had their money, their freedom, their privacy, their health, and
sometimes their very lives taken away from them by the State. But the heartbreaking part is that they feel they are powerless
to do anything at all about it so are just trying to leave.
But "People should not fear the government; the government should fear the people"
As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more
than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social
media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly
suspect not.
This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and
then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because,
you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others
about what opinion to have, is about the limit of what they are willing, or know how to do.
"... And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder it becomes to get a job offer. ..."
I thought this was an interesting article. Apologies if this has been posted on NC
already.
A stunning 33% of job seekers ages 55 and older are long-term unemployed, according to
the AARP Public Policy Institute. The average length of unemployment for the roughly 1.2
million people 55+ who are out of work: seven to nine months. "It's emotionally devastating
for them," said Carl Van Horn, director of Rutgers University's John J. Heldrich Center for
Workforce Development, at a Town Hall his center and the nonprofit WorkingNation held
earlier this year in New Brunswick, N.J.
... ... ...
The fight faced by the long-term unemployed
And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder
it becomes to get a job offer.
The job-finding rate declines by roughly 50% within eight months of unemployment, according to a 2016 paper by economists
Gregor Jarosch of Stanford University and Laura Pilossoph of the Federal Reserve Bank of New York. "Unemployment duration
has a strongly negative effect on the likelihood of subsequent employment," wrote researchers from the University of
Maryland and the U.S. Census Bureau in another 2016 paper.
"Once upon a time, you could take that first job and it would lead to the next job and the job after that," said Town
Hall panelist John Colborn, chief operating officer at the nonprofit JEVS Human Services, of Philadelphia. "The notion of a
career ladder offered some hope of getting back into the labor market. The rungs of the ladder are getting harder and harder
to find and some of them are broken."
In inner cities, said Kimberly McClain, CEO of The Newark Alliance, "there's an extra layer beyond being older and out of
work. There are issues of race and poverty and being defined by your ZIP Code. There's an incredible sense of urgency."
... ... ...
Filling a work gap
If you are over 50, unemployed and have a work gap right now, the Town Hall speakers said, fill it by volunteering,
getting an internship, doing project work, job-shadowing someone in a field you want to be in or taking a class to re-skill.
These kind of things "make a candidate a lot more attractive," said Colborn. Be sure to note them in your cover letter and
résumé.
Town Hall panelist Amanda Mullan, senior vice president and chief human resources officer of the New Jersey Resources
Corp. (a utility company based in Wall, N.J.), said that when her company is interviewing someone who has been out of work
lately, "we will ask: 'What have you done during that time frame?' If we get 'Nuthin,' that shows something about the
individual, from a motivational perspective."
... ... ...
The relief of working again
Finally finding work when you're over 50 and unemployed for a stretch can be a relief for far more than financial
reasons.
"Once I landed my job, the thing I most looked forward to was the weekend," said Konopka. "Not to relax, but because I
didn't have to think about finding a job anymore. That's 24/7 in your head. You're always thinking on a Saturday: 'If I'm
not doing something to find a job, will there be a posting out there?'"
At 5:30 every morning, Tony Gwiazdowski rolls out of bed, brews a pot of coffee and carefully arranges his laptop, cell phone
and notepad like silverware across the kitchen table.
And then he waits.
Gwiazdowski, 57, has been waiting for 16 months. Since losing his job as a transportation sales manager in February 2009, he wakes
each morning to the sobering reminder that, yes, he is still unemployed. So he pushes aside the fatigue, throws on some clothes and
sends out another flurry of resumes and cheery cover letters.
But most days go by without a single phone call. And around sundown, when he hears his neighbors returning home from work, Gwiazdowski
-- the former mayor of Hillsborough -- can't help but allow himself one tiny sigh of resignation.
"You sit there and you wonder, 'What am I doing wrong?'" said Gwiazdowski, who finds companionship in his 2-year-old golden retriever,
Charlie, until his wife returns from work.
"The worst moment is at the end of the day when it's 4:30 and you did everything you could, and the phone hasn't rung, the e-mails
haven't come through."
Gwiazdowski is one of a growing number of chronically unemployed workers in New Jersey and across the country who are struggling
to get through what is becoming one long, jobless nightmare -- even as the rest of the economy has begun to show signs of recovery.
Nationwide, 46 percent of the unemployed -- 6.7 million Americans -- have been without work for at least half a year, by far the
highest percentage recorded since the U.S. Labor Department began tracking the data in 1948.
In New Jersey, nearly 40 percent of the 416,000 unemployed workers last year fit that profile, up from about 20 percent in previous
years, according to the department, which provides only annual breakdowns for individual states. Most of them were unemployed for
more than a year.
But the repercussions of chronic unemployment go beyond the loss of a paycheck or the realization that one might never find the
same kind of job again. For many, the sinking feeling of joblessness -- with no end in sight -- can take a psychological toll, experts
say.
Across the state, mental health crisis units saw a 20 percent increase in demand last year as more residents reported suffering
from unemployment-related stress, according to the New Jersey Association of Mental Health Agencies.
"The longer the unemployment continues, the more impact it will have on their personal lives and mental health," said Shauna Moses,
the association's associate executive director. "There's stress in the marriage, with the kids, other family members, with friends."
And while a few continue to cling to optimism, even the toughest admit there are moments of despair: Fear of never finding work,
envy of employed friends and embarassment at having to tell acquaintances that, nope, still no luck.
"When they say, 'Hi Mayor,' I don't tell a lot of people I'm out of work -- I say I'm semi-retired," said Gwiazdowski, who maxed
out on unemployment benefits several months ago.
"They might think, 'Gee, what's wrong with him? Why can't he get a job?' It's a long story and maybe people really don't care
and now they want to get away from you."
SECOND TIME AROUND
Lynn Kafalas has been there before, too. After losing her computer training job in 2000, the East Hanover resident took four agonizing
years to find new work -- by then, she had refashioned herself into a web designer.
That not-too-distant experience is why Kafalas, 52, who was laid off again eight months ago, grows uneasier with each passing
day. Already, some of her old demons have returned, like loneliness, self-doubt and, worst of all, insomnia. At night, her mind races
to dissect the latest interview: What went wrong? What else should she be doing? And why won't even Barnes & Noble hire her?
"It's like putting a stopper on my life -- I can't move on," said Kafalas, who has given up karate lessons, vacations and regular
outings with friends. "Everything is about the interviews."
And while most of her friends have been supportive, a few have hinted to her that she is doing something wrong, or not doing enough.
The remarks always hit Kafalas with a pang.
In a recent study, researchers at Rutgers University found that the chronically unemployed are prone to high levels of stress,
anxiety, depression, loneliness and even substance abuse, which take a toll on their self-esteem and personal relationships.
"They're the forgotten group," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers,
and a co-author of the report. "And the longer you are unemployed, the less likely you are to get a job."
Of the 900 unemployed workers first interviewed last August for the study, only one in 10 landed full-time work by March of this
year, and only half of those lucky few expressed satisfaction with their new jobs. Another one in 10 simply gave up searching.
Among those who were still unemployed, many struggled to make ends meet by borrowing from friends or family, turning to government
food stamps and forgoing health care, according to the study.
More than half said they avoided all social contact, while slightly less than half said they had lost touch with close friends.
Six in 10 said they had problems sleeping.
Kafalas says she deals with her chronic insomnia by hitting the gym for two hours almost every evening, lifting weights and pounding
the treadmill until she feels tired enough to fall asleep.
"Sometimes I forget what day it is. Is it Tuesday? And then I'll think of what TV show ran the night before," she said. "Waiting
is the toughest part."
AGE A FACTOR
Generally, the likelihood of long-term unemployment increases with age, experts say. A report by the National Employment Law Project
this month found that nearly half of those who were unemployed for six months or longer were at least 45 years old. Those between
16 and 24 made up just 14 percent.
Tell that to Adam Blank, 24, who has been living with his girlfriend and her parents at their Martinsville home since losing his
sales job at Best Buy a year and half ago.
Blank, who graduated from Rutgers with a major in communications, says he feels like a burden sometimes, especially since his
girlfriend, Tracy Rosen, 24, works full-time at a local nonprofit. He shows her family gratitude with small chores, like taking out
the garbage, washing dishes, sweeping floors and doing laundry.
Still, he often feels inadequate.
"All I'm doing on an almost daily basis is sitting around the house trying to keep myself from going stir-crazy," said Blank,
who dreams of starting a social media company.
When he is feeling particularly low, Blank said he turns to a tactic employed by prisoners of war in Vietnam: "They used to build
dream houses in their head to help keep their sanity. It's really just imagining a place I can call my own."
LESSONS LEARNED
Meanwhile, Gwiazdowski, ever the optimist, says unemployment has taught him a few things.
He has learned, for example, how to quickly assess an interviewer's age and play up or down his work experience accordingly --
he doesn't want to appear "threatening" to a potential employer who is younger. He has learned that by occasionally deleting and
reuploading his resume to job sites, his entry appears fresh.
"It's almost like a game," he said, laughing. "You are desperate, but you can't show it."
But there are days when he just can't find any humor in his predicament -- like when he finishes a great interview but receives
no offer, or when he hears a fellow job seeker finally found work and feels a slight twinge of jealousy.
"That's what I'm missing -- putting on that shirt and tie in the morning and going to work," he said.
The memory of getting dressed for work is still so vivid, Gwiazdowski says, that he has to believe another job is just around
the corner.
"You always have to hope that that morning when you get up, it's going to be the day," he said.
"Today is going to be the day that something is going to happen."
I collect from the state of iowa, was on tier I and when the gov't recessed without passing extension, iowa stopped paying
tier I claims that were already open, i was scheduled to be on tier I until july 15th, and its gone now, as a surprise, when i
tried to claim my week this week i was notified. SURPRISE, talk about stress.
This is terrible....just wait until RIF'd teachers hit the unemployment offices....but then, this is what NJ wanted...fired
teachers who are to blame for the worst recession our country has seen in 150 years...thanks GWB.....thanks Donald Rumsfeld......thanks
Dick Cheney....thanks Karl "Miss Piggy" Rove...and thank you Mr. Big Boy himself...Gov Krispy Kreame!
For readers who care about this nation's unemployed- Call your Senators to pass HR 4213, the "Extenders" bill. Unfortunately,
it does not add UI benefits weeks, however it DOES continue the emergency federal tiers of UI. If it does not pass this week many
of us are cut off at 26 wks. No tier 1, 2 -nothing.
The longer you are unemployed, the more you are effected by those factors.
Notable quotes:
"... The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they suffer few, and minor, ill effects. ..."
"... Worries about income, domestic problems, whatever, the list is as long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation over time. The chemistry of stress is complex, but it can be rough on the hormonal system. ..."
"... Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress. Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those affected, these are by now, at this stage, real crises. ..."
"... Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these conditions. Even that comes at a cost, and although under control, the stress remains a problem. ..."
"... One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress over the last decade. This is a common situation, and help is available. ..."
"... Depression is universally hated by anyone who's ever had it. ..."
"... Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either. ..."
"... You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic exercises, you're talking about 30-45 minutes a day. It's not hard. ..."
It's almost impossible to describe the various psychological impacts, because there are so many. There are sometimes serious consequences,
including suicide, and, some would say worse, chronic depression.
There's not really a single cause and effect. It's a compound effect, and unemployment, by adding stress, affects people, often
badly.
The world doesn't need any more untrained psychologists, and we're not pretending to give medical advice. That's for professionals.
Everybody is different, and their problems are different. What we can do is give you an outline of the common problems, and what
you can do about them.
The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent
they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they
suffer few, and minor, ill effects.
For others, there are a series of issues, and the big three are:
Stress
Anger, and other negative emotions
Depression
Stress
Stress is Stage One. It's a natural result of the situation. Worries about income, domestic problems, whatever, the list is as
long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation
over time. The chemistry of stress is complex, but it can be rough on the hormonal system.
Over an extended period, the body's natural hormonal balances are affected, and this can lead to problems. These are actually
physical issues, but the effects are mental, and the first obvious effects are, naturally, emotional.
Anger, and other negative emotions
Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite
intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress.
Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those
affected, these are by now, at this stage, real crises.
If the actual situation was already bad, this mental state makes it a lot worse. Constant aggravation doesn't help people to keep
a sense of perspective. Clear thinking isn't easy when under constant stress.
Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these
conditions. Even that comes at a cost, and although under control, the stress remains a problem.
One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress
over the last decade. This is a common situation, and help is available.
If you have reservations about seeking help, bear in mind it can't possibly be any worse than the problem.
Depression
Depression is universally hated by anyone who's ever had it. This is the next stage, and it's caused by hormonal imbalances which
affect serotonin. It's actually a physical problem, but it has mental effects which are sometimes devastating, and potentially life
threatening.
The common symptoms are:
Difficulty in focusing mentally, thoughts all over the place in no logical order
Fits of crying for no known reason
Illogical, or irrational patterns of thought and behavior
Sadness
Suicidal thinking
It's a disgusting experience. No level of obscenity could possibly describe it. Depression is misery on a level people wouldn't
conceive in a nightmare. At this stage the patient needs help, and getting it is actually relatively easy. It's convincing the person they need to do something about it that's difficult. Again, the mental state is working against the person. Even admitting there's a problem is hard for many people in this condition.
Generally speaking, a person who is trusted is the best person to tell anyone experiencing the onset of depression to seek help. Important: If you're experiencing any of those symptoms:
Get on the phone and make an appointment to see your doctor. It takes half an hour for a diagnosis, and you can be on your
way home with a cure in an hour. You don't have to suffer. The sooner you start to get yourself out of depression, the better.
Avoid any antidepressants with the so-called withdrawal side effects. They're not too popular with patients, and are under
some scrutiny. The normal antidepressants work well enough for most people.
Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly
the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either.
Alcohol, in particular, makes depression much worse. Alcohol is a depressant, itself, and it's also a nasty chemical mix with
all those stress hormones.
If you've ever had alcohol problems, or seen someone with alcohol wrecking their lives, depression makes things about a million
times worse.
Just don't do it. Steer clear of any so-called stimulants, because they don't mix with antidepressants, either.
Unemployment and staying healthy
The above is what you need to know about the risks of unemployment to your health and mental well being.
These situations are avoidable.
Your best defense against the mental stresses and strains of unemployment, and their related problems is staying healthy.
We can promise you that is nothing less than the truth. The healthier you are, the better your defenses against stress, and the
more strength you have to cope with situations.
Basic health is actually pretty easy to achieve:
Diet
Eat real food, not junk, and make sure you're getting enough food. Your body can't work with resources it doesn't have. Good food
is a real asset, and you'll find you don't get tired as easily. You need the energy reserves.
Give yourself a good selection of food that you like, that's also worth eating.
The good news is that plain food is also reasonably cheap, and you can eat as much as you need. Basic meals are easy enough to
prepare, and as long as you're getting all the protein veg and minerals you need, you're pretty much covered.
You can also use a multivitamin cap, or broad spectrum supplements, to make sure you're getting all your trace elements. Also
make sure you're getting the benefits of your food by taking acidophilus or eating yogurt regularly.
Exercise
You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic
exercises, you're talking about 30-45 minutes a day. It's not hard.
Don't just sit and suffer
If anything's wrong, check it out when it starts, not six months later. Most medical conditions become serious when they're allowed
to get worse.
For unemployed people the added risk is also that they may prevent you getting that job, or going for interviews. If something's
causing you problems, get rid of it.
Nobody who's been through the blender of unemployment thinks it's fun.
Anyone who's really done it tough will tell you one thing:
Don't be a victim. Beat the problem, and you'll really appreciate the feeling.
"... According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine, and my pace would accelerate throughout the course of a shift. What they didn't know was that I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion ..."
"... toiling in some remote corner of the warehouse, alone for 10 hours, with my every move being monitored by management on a computer screen. ..."
"... ISS could simply deactivate a worker's badge and they would suddenly be out of work. They treated us like beggars because we needed their jobs. Even worse, more than two years later, all I see is: Jeff Bezos is hiring. ..."
"... I have never felt more alone than when I was working there. I worked in isolation and lived under constant surveillance ..."
"... That was 2012 and Amazon's labor and business practices were only beginning to fall under scrutiny. ..."
"... I received $200 a week for the following six months and I haven't had any source of regular income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for food stamps. ..."
Nichole Gracely has a master's degree and was one of Amazon's best order pickers. Now, after
protesting the company, she's homeless.
I am homeless. My worst days now are better than my best days working at Amazon.
According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine,
and my pace would accelerate throughout the course of a shift. What they didn't know was that
I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion.
During peak season, I trained incoming temps regularly. When that was over, I'd be an ordinary
order picker once again, toiling in some remote corner of the warehouse, alone for 10 hours,
with my every move being monitored by management on a computer screen.
Superb performance did not guarantee job security. ISS is the temp agency that provides warehouse
labor for Amazon and they are at the center of the SCOTUS case Integrity Staffing Solutions
vs. Busk. ISS could simply deactivate a worker's badge and they would suddenly be out of work.
They treated us like beggars because we needed their jobs. Even worse, more than two years later,
all I see is: Jeff Bezos is hiring.
I have never felt more alone than when I was working there. I worked in isolation and lived
under constant surveillance. Amazon could mandate overtime and I would have to comply with any
schedule change they deemed necessary, and if there was not any work, they would send us home
early without pay. I started to fall behind on my bills.
At some point, I lost all fear. I had already been through hell. I protested Amazon. The
gag order was lifted and I was free to speak. I spent my last days in a lovely apartment constructing
arguments on discussion boards, writing articles and talking to reporters. That was 2012 and
Amazon's labor and business practices were only beginning to fall under scrutiny. I walked away
from Amazon's warehouse and didn't have any other source of income lined up.
I cashed in on my excellent credit, took out cards, and used them to pay rent and buy food
because it would be six months before I could receive my first unemployment compensation check.
I received $200 a week for the following six months and I haven't had any source of regular
income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania
as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for
food stamps.
I furthered my Amazon protest while homeless in Seattle. When the Hachette dispute flared
up I "flew a sign," street parlance for panhandling with a piece of cardboard: "I was an order
picker at amazon.com. Earned degrees. Been published. Now,
I'm homeless, writing and doing this. Anything helps."
I have made more money per word with my signs than I will probably ever earn writing, and
I make more money per hour than I will probably ever be paid for my work. People give me money
and offer well wishes and I walk away with a restored faith in humanity.
I flew my protest sign outside Whole Foods while Amazon corporate employees were on lunch
break, and they gawked. I went to my usual flying spots around Seattle and made more money per
hour protesting Amazon with my sign than I did while I worked with them. And that was in Seattle.
One woman asked, "What are you writing?" I told her about the descent from working poor to homeless,
income inequality, my personal experience. She mentioned Thomas Piketty's book, we chatted a
little, she handed me $10 and wished me luck. Another guy said, "Damn, that's a great story!
I'd read it," and handed me a few bucks.
"... Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. ..."
"... Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins. ..."
"... In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week. ..."
"... An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8] ..."
"... Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017. ..."
"... Socialize the losses, privatize the gains, VC-ize the subsidies. ..."
"... The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. ..."
"... "Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs ..."
Uber lost $2.5 billion in 2015, probably lost $4 billion in 2016, and is on track to lose $5
billion in 2017.
The top line on the table below shows is total passenger payments, which must be split
between Uber corporate and its drivers. Driver gross earnings are substantially higher than
actual take home pay, as gross earning must cover all the expenses drivers bear, including
fuel, vehicle ownership, insurance and maintenance.
Most of the "profit" data released by Uber over time and discussed in the press is not true
GAAP (generally accepted accounting principles) profit comparable to the net income numbers
public companies publish but is EBIDTAR contribution. Companies have significant leeway as to
how they calculate EBIDTAR (although it would exclude interest, taxes, depreciation,
amortization) and the percentage of total costs excluded from EBIDTAR can vary significantly
from quarter to quarter, given the impact of one-time expenses such as legal settlements and
stock compensation. We only have true GAAP net profit results for 2014, 2015 and the 2nd/3rd
quarters of 2017, but have EBIDTAR contribution numbers for all other periods.
[5]
Uber had GAAP net income of negative $2.6 billion in 2015, and a negative profit margin of
132%. This is consistent with the negative $2.0 billion loss and (143%) margin for the year
ending September 2015 presented in part one of the NC Uber series over a year ago.
No GAAP profit results for 2016 have been disclosed, but actual losses likely exceed $4
billion given the EBIDTAR contribution of negative $3.2 billion. Uber's GAAP losses for the 2nd
and 3rd quarters of 2017 were over $2.5 billion, suggesting annual losses of roughly $5
billion.
While many Silicon Valley funded startups suffered large initial losses, none of them lost
anything remotely close to $2.6 billion in their sixth year of operation and then doubled their
losses to $5 billion in year eight. Reversing losses of this magnitude would require the
greatest corporate financial turnaround in history.
No evidence of significant efficiency/scale gains; 2015 and 2016 margin improvements
entirely explained by unilateral cuts in driver compensation, but losses soared when Uber had
to reverse these cuts in 2017.
Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate
revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%.
This was an effective $500 million wealth transfer from drivers to Uber's investors. These
driver compensation cuts improved Uber's EBIDTAR margin, but Uber's P&L gains were
wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in
any improvement in Uber profit margins.
In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing
drivers an additional $3 billion.
[6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was
in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a
week.
An independent study of the net earnings of Uber drivers (after accounting for the costs
of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to
Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range.
[7] Multiple recent news reports have documented how Uber drivers are increasing unable to
support themselves from their reduced share of passenger payments.
[8]
A business model where profit improvement is hugely dependent on wage cuts is unsustainable,
especially when take home wages fall to (or below) minimum wage levels. Uber's primary focus
has always been the rate of growth in gross passenger revenue, as this has been a major
justification for its $68 billion valuation. This growth rate came under enormous pressure in
2017 given Uber efforts to raise fares, major increases in driver turnover as wages fell,
[9] and the avalanche of adverse publicity it was facing.
Since mass driver defections would cause passenger volume growth to collapse completely,
Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%.
This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in
2016 will probably only grow by about 15% in 2017.
"Uber's business model can never produce sustainable profits"
Two words not in my vocabulary are "Never" and "Always", that is a pretty absolute
statement in an non-absolute environment. The same environment that has produced the "Silicon
Valley Growth Model", with 15x earnings companies like NVIDA, FB and Tesla (Average
earnings/stock price ratio in dot com bubble was 10x) will people pay ridiculous amounts of
money for a company with no underlying fundamentals you damn right they will! Please stop
with the I know all no body knows anything, especially the psychology and irrationality of
markets which are made up of irrational people/investors/traders.
My thoughts exactly. Seems the only possible recovery for the investors is a perfectly
engineered legendary pump and dump IPO scheme. Risky, but there's a lot of fools out there
and many who would also like to get on board early in the ride in fear of missing out on all
the money to be hoovered up from the greater fools. Count me out.
The author clearly distinguishes between GAAP profitability and valuations, which is after
all rather the point of the series. And he makes a more nuanced point than the half sentence
you have quoted without context or with an indication that you omitted a portion. Did you
miss the part about how Uber would have a strong incentive to share the evidence of a network
effect or other financial story that pointed the way to eventual profit? Otherwise (my words)
it is the classic sell at a loss, make it up with volume path to liquidation.
apples and oranges comparison, nvidia has lots and lots of patented tech that produces
revenue, facebook has a kajillion admittedly irrational users, but those users drive massive
ad sales (as just one example of how that company capitalizes itself) and tesla makes an
actual car, using technology that inspires it's buyers (the put your money where your mouth
is crowd and it can't be denied that tesla, whatever it's faults are, battery tech is not one
of them and that intellectual property is worth a lot, and tesla's investors are in on that
real business, profitable or otherwise)
Uber is an iphone app. They lose money and have no
path to profitability (unless it's the theory you espouse that people are unintelligent so
even unintelligent ideas work to fleece them). This article touches on one of the great
things about the time we now inhabit, uber drivers could bail en masse, there are two sides
to the low attachment employees who you can get rid of easily. The drivers can delete the
uber app as soon as another iphone app comes along that gets them a better return
For many air travelers, getting to and from the airport has long been part of the whole
miserable experience. Do they drive and park in some distant lot? Take mass transit or a
taxi? Deal with a rental car?
Ride-hailing services like Uber and Lyft are quickly changing those calculations. That
has meant a bit less angst for travelers.
But that's not the case for airports. Travelers' changing habits, in fact, have begun to
shake the airports' financial underpinnings. The money they currently collect from
ride-hailing services do not compensate for the lower revenues from the other sources.
At the same time, some airports have had to add staff to oversee the operations of the
ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads
outside terminals,
there's more congestion.
Socialize the losses, privatize the gains, VC-ize the subsidies.
The cold hard truth is that Uber is backed into a corner with severely limited abilities
to tweak the numbers on either the supply or the demand side: cut driver compensation and
they trigger driver churn (as has already been demonstrated), increase fare prices for riders
and riders defect to cheaper alternatives. The only question is how long can they keep the
show going before the lights go out, slick marketing and propaganda can only take you so far,
and one assumes the dumb money has a finite supply of patience and will at some point begin
asking the tough questions.
The irony is that Uber would have been a perfectly fine, very profitable mid-sized company
if Uber stuck with its initial model -- sticking to dense cities with limited parking,
limiting driver supply, and charging a premium price for door-to-door delivery, whether by
livery or a regular sedan. And then perhaps branching into robo-cars.
But somehow Uber/board/Travis got suckered into the siren call of self-driving cars,
triple-digit user growth, and being in the top 100 US cities and on every continent.
I've shared a similar sentiment in one of the previous posts about Uber. But operating
profitably in decent sized niche doesn't fit well with ambitions of global domination. For
Uber to be "right-sized", an admission of folly would have to be made, its managers and
investors would have to transcend the sunk cost fallacy in their strategic decision making,
and said investors would have to accept massive hits on their invested capital. The cold,
hard reality of being blindsided and kicked to the curb in the smartphone business forced
RIM/Blackberry to right-size, and they may yet have a profitable future as an enterprise
facing software and services company. Uber would benefit from that form of sober mindedness,
but I wouldn't hold my breath.
I know nothing about Softbank or its management, but I do know that the Japanese were the
dumb money rubes in the late '80's, overpaying for trophy real estate they lost billions
on.
Until informed otherwise, that's my default assumption
Softbank possibly looking to buy more Uber shares at a 30% discount is very odd. Uber had
a Series G funding round in June 2016 where a $3.5
billion investment from Saudi Arabia's Public Investment Fund resulted in its current $68
billion valuation. Now apparently Softbank wants to lead a new $6 billion funding round to
buy the shares of Uber employees and early investors at a 30% discount from this last
"valuation". It's odd because Saudi Arabia's Public Investment Fund has pledged
$45 billion to SoftBank's Vision Fund , an amount which was supposed to come from the
proceeds of its pending Aramco IPO. If the Uber bid is linked to SoftBank's Vision Fund, or
KSA money, then its not clear why this investor might be looking to literally 'double down'
from $3.5 billion o $6 billion on a declining investment.
"Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype
brilliance" was to con the market with "revenue growth" and signs of efficiency, and
hopes of greater efficiency, and make most people just overlook the essential fact
that Uber is the most unprofitable company of all time!
What comprises "Uber Expenses"? 2014 – $1.06 billion; 2015 $3.33 billion; 2016 $9.65
billion; forecast 2017 $11.418 billion!!!!!! To me this is the big question – what are
they spending $10 billion per year on?
ALso – why did driver share go from 68% in 2016 to 80% in 2017? If you use 68% as in
2016, 2017 Uber revenue is $11.808 billion, which means a bit better than break-even EBITDA,
assuming Uber expenses are as stated $11.428 billion.
Perhaps not so bleak as the article presents, although I would not invest in this
thing.
I have the same question: What comprises over 11 billion dollars in expenses in 2017?
Could it be they are paying out dividends to the early investors? Which would mean they are
cannibalizing their own company for the sake of the VC! How long can this go on before
they'll need a new infusion of cash?
Oh article does answer your 2nd question. Read this paragraph:-
Since mass driver defections would cause passenger volume growth to collapse completely
, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to
80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over
200% in 2016 will probably only grow by about 15% in 2017.
As for the 1st, read this line in the article:-
There are undoubtedly a number of things Uber could do to reduce losses at the margin,
but it is difficult to imagine it could suddenly find the $4-5 billion in profit
improvement needed merely to reach breakeven.
in addition to all the points listed in the article/comments, the absolute biggest flaw
with Uber is that Uber HQ conditioned its customers on (a) cheap fares and (b) that a car is
available within minutes (1-5 if in a big city).
Those two are not mutually compatible in the long-term.
Thus (a) "We cost less" and (b) "We're more convenient" -- aren't those also the
advantages that Walmart claims and feeds as a steady diet to its ever hungry consumers? Often
if not always, disruption may repose upon delusion.
When this Uber madness blows up, I wonder if people will finally begin to discuss the
brutal reality of Silicon Valley's so called "disruption".
It is heavily built in around the idea of economic exploitation. Uber drivers are often,
especially when the true costs to operate an Uber including the vehicle depreciation are
factored in, making not very much per hour driven, especially if they don't get the surge
money.
Instacart is another example. They are paying the deliver operators very little.
At a fundamental level, I think that the Silicon Valley "disruption" model only works for
markets (like software) where the marginal cost for production is de minimus and the
products can be protected by IP laws. Volume and market power really work in those cases. But
out here in meat-space, where actual material and labor are big inputs to each item sold, you
can never just sit back on your laurels and rake in the money. Somebody else will always be
able to come and and make an equivalent product. If they can do it more cheaply, you are in
trouble.
There aren't that many areas in goods and services where the marginal costs are very
low.
Software is actually quite unique in that regard, costing merely the bandwidth and
permanent storage space to store.
Let's see:
1. From the article, they cannot go public and have limited ways to raise more money. An
IPO with its more stringent disclosure requirements would expose them.
2. They tried lowering driver compensation and found that model unsustainable.
3. There are no benefits to expanding in terms of economies of scale.
From where I am standing, it looks like a lot of industries gave similar barriers. Silicon
Valley is not going to be able to disrupt those.
Tesla, another Silicon Valley company seems to be struggling to mass produce its Model 3
and deliver an electric car that breaks even, is reliable, while disrupting the industry in
the ways that Elon Musk attempted to hype up.
So that basically leaves services and manufacturing out for Silicon Valley disruption.
UBER has become a "too big to fail" startup because of all the different tentacles of
capital from various Tier 1 VCs and investment bankers.
VCs have admitted openly that UBER is a subsidized business, meaning it's product is sold
below market value, and the losses reflect that subsidization. The whole "2 sided platform"
argument is just marketecture to hustle more investors. It's a form of service "dumping" that
puts legacy businesses into bankruptcy. Back during the dotcom bubble one popular investment
banker (Paul Deninger) characterized this model as "Terrorist Competition", i.e. coffers full
of invested cash to commoditize the market and drive out competition.
UBER is an absolute disaster that has forked the startup model in Silicon Valley in order
to drive total dependence on venture capital by founders. And its current diversification
into "autonomous vehicles", food delivery, et al are simply more evidence that the company
will never be profitable due to its whacky "blitzscaling" approach of layering on new
"businesses" prior to achieving "fit" in its current one.
It's economic model has also metastasized into a form of startup cancer that is killing
Silicon Valley as a "technology" innovator. Now it's all cargo cult marketing BS tied to
"strategic capital".
UBER is the victory of venture capital and user subsidized startups over creativity by
real entrepreneurs.
It's shadow is long and that's why this company should be ..wait for it UNBUNDLED (the new
silicon valley word attached to that other BS religion called "disruption"). Call it a great
unbundling and you can break up this monster corp any way you want.
2. The elevator pitch for Uber: subsidize rides to attract customers, put the competition
out of business, and then enjoy an unregulated monopoly, all while exploiting economically
ignorant drivers–ahem–"partners."
3. But more than one can play that game, and
4. Cab and livery companies are finding ways to survive!
If subsidizing rides is counted as an expense, (not being an accountant, I would guess it
so), then whether the subsidy goes to the driver or the passenger, that would account for the
ballooning expenses, to answer my own question. Otherwise, the overhead for operating what
Uber describes as a tech company should be minimal: A billion should fund a decent
headquarters with staff, plus field offices in, say, 100 U.S. cities. However, their global
pretensions are probably burning cash like crazy. On top of that, I wonder what the exec
compensation is like?
After reading HH's initial series, I made a crude, back-of-the-envelope calculation that
Uber would run out of money sometime in the third fiscal quarter of 2018, but that was based
on assuming losses were stabilizing in the range of 3 billion a year. Not so, according to
the article. I think crunch time is rapidly approaching. If so, then SoftBank's tender offer
may look quite appetizing to VC firms and to any Uber employee able to cash in their options.
I think there is a way to make a re-envisioned Uber profitable, and with a more independent
board, they may be able to restructure the company to show a pathway to profitability before
the IPO. But time is running out.
A not insignificant question is the recruitment and retention of the front line
"partners." It would seem to me that at some point, Uber will run out of economically
ignorant drivers with good manners and nice cars. I would be very interested to know how many
drivers give up Uber and other ride-sharing gigs once the 1099's start flying at the
beginning of the year. One of the harsh realities of owning a business or being an contractor
is the humble fact that you get paid LAST!
We became instant Uber riders while spending holidays with relatives in San Diego. While
their model is indeed unique from a rider perspective, it was the driver pool that fascinates
me. These are not professional livery drivers, but rather freebooters of all stripes driving
for various reasons. The remuneration they receive cannot possibly generate much income after
expenses, never mind the problems associated with IRS filing as independent contractors.
One guy was just cruising listening to music; cooler to get paid for it than just sitting
home! A young lady was babbling and gesticulating non stop about nothing coherent and
appeared to be on some sort of stimulant. A foreign gentleman, very professional, drove for
extra money when not at his regular job. He was the only one who had actually bought a new
Prius for this gig, hoping to pay it off in two years.
This is indeed a brave new world. There was a period in Nicaragua just after the Contra
war ended when citizens emerged from their homes and hit the streets in large numbers,
desperately looking for income. Every car was a taxi and there was a bipedal mini Walmart at
every city intersection as individuals sold everything and anything in a sort of euphoric
optimism towards the future. Reality just hadn't caught up with them yet .
U6 underemployment rate rose +0.1% from 7.9% to 8.0%
Here are the headlines on wages and the chronic heightened underemployment: Wages and
participation rates
Not in Labor Force, but Want a Job Now: rose +53,000 from 5.175 million to 5.238
million
Part time for economic reasons: rose +48,000 from 4.753 million to 4.801 million
Employment/population ratio ages 25-54: rose +0.2% from 78.8% to 79.0%
Average Weekly Earnings for Production and Nonsupervisory Personnel: rose +$.0.5 from a
downwardly revised $22.19 to $22.24, up +2.4% YoY. (Note: you may be reading different
information about wages elsewhere. They are citing average wages for all private workers. I
use wages for nonsupervisory personnel, to come closer to the situation for ordinary
workers.)
Holding Trump accountable on manufacturing and mining jobs
Trump specifically campaigned on bringing back manufacturing and mining jobs. Is he keeping
this promise?
Manufacturing jobs rose by +31,000 for an average of +15,000 a month vs. the last seven
years of Obama's presidency in which an average of 10,300 manufacturing jobs were added
each month.
Coal mining jobs fell -400 for an average of -15 a month vs. the last seven years of
Obama's presidency in which an average of -300 jobs were lost each month
September was revised upward by +20,000. October was revised downward by -17,000, for a
net change of +3,000.
likbez December 9, 2017 7:52 pm
There are now large categories of jobs, both part-time and full time, that can't provide
for living and are paying below or close to minimum wage (plantation economy jobs). it
looks like under neoliberalism this is the fastest growing category of jobs.
Examples are Uber and Lift jobs (which are as close to predatory scam as one can get) .
Many jobs in service industry, especially retail. See for example
On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice
it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked
for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to.
My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few
factors regardless of outsourcing or not.
Notable quotes:
"... On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not. ..."
On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice
it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've
worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced
to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely
on a few factors regardless of outsourcing or not.
The first is a golden rule of sorts on doing anything:
Cheap
Quality
Fast
You can only pick two; NO exceptions. I've encountered so many upper management types that foolishly think they can get away
with having all three. In my experience 9/10 of the time it turns out a lack of quality bites them in the butt sometime down the
road when they assumed they somehow managed to achieve all three.
The second is communication. Mostly everyone in at least the US has experienced the pain of being subjected to some company's
outsourced customer service and/or tech support that can't effectively communicate with both parties on the same page of understanding
one another. I really shouldn't need to explain why communication, understanding one another is so important. Sadly this is something
I have to constantly explain to my current boss with events like today where my non-outsourced colleague rebooted a number of
production critical servers when he was asked to reboot just one secondary server.
Third is the employee's skill in doing the job. Again, another obvious one, but I've observed that it isn't always on the hiring
menu. Additionally I've seen some people that interview well, but couldn't create a "Hello World" HTML page for a web developer
position as an example. There's no point in hiring or keeping a hired individual to do a job that they lack the skill to do; even
if it's an entry-level position with training, that person should be willing to put for the effort to learn and take notes. I
accept that everyone has their own unique skills that can aide or hinder their ability to learn and be proficient with a particular
task. However, I firmly believe anyone can learn to do anything as long as they put their mind to it. I barely have any artistic
ability and my drawing skills are stick figures at best (XKCD is miles ahead of me); if I were to put forth the effort to learn
how to draw and paint, I could become a good artist. I taught an A+ technician certification class at a tech school a while back
and I had a retired Marine that served in the Vietnam War as one of my students. One could argue his best skill was killing and
blowing stuff up. He worked hard and learned to be a technician and passed CompTIA's certification test without a problem. That
leads me to the next point.
Lastly is attitude of the end employee doing the actual work. It boggles my mind how so many managers loose the plot when it
comes to employee morale and motivation. Productivity generally is improved when those two are improved and it usually doesn't
have to involve spending a bunch of money. The employee's attitude should be getting the work done correctly in a reasonable amount
of time. Demanding it is a poor approach. Poisoning an employee will result in poisoning the company in a small manner all the
way up to the failure of the company. Employees should be encouraged through actual morale improvements, positive motivation,
and incentives for doing more work at the same and/or better quality level.
Outsourcing or keeping things in house can be successful and possibly economical if approached correctly with the appropriate
support of upper management.
How dramatic? Isn't outsourcing done (like it or not) to reduce costs?
Outsourcing is done to reduce the projected costs that PHBs see. In reality, outsourcing can lead to increased costs and delays
due to time zone differences and language/cultural barriers.
I have seen it work reasonably well, but only when the extra effort and delays caused by the increased need for rework that
comes from complex software projects. If you are working with others on software, it is so much quicker to produce quality software
if the person who knows the business requirements is sitting right next to the person doing design and the person cutting code
and the person doing the testing, etc, etc.
If these people or groups are scattered around the world with different cultures and native languages, communication can suffer,
increasing misunderstanding and reducing the quality. I have personally seen this lead to massive increase in code defects in
a project that went from in house development to outsourced.
Also, time zone differences cause problems. I have noticed that the further west people live, the less likely they are to take
into account how far behind they are. Working with people who fail to realise that their Monday morning is the next day for someone
else, or that by the time they are halfway through Friday, others are already on their weekend is not only frustrating, it leads
to slow turn around of bug fixes, etc.
Yeah, I'm told outsourcing keeps costs down, but I am yet to see conclusive evidence of that in the real world. At least in
complex development. YMMV for support/call centre stuff.
"... What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. ..."
"... Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye. ..."
"... Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is. ..."
"... The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue. ..."
What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams,
server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything
worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these
people could save a business in times of disaster.
Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT
groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does
work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and
know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free
ticket for people to turn a blind eye.
Specialization
You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with
a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in
learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is
run by people who specialize in those elements. Everything is taken care of.
Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows
administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to
do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about
new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.
If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get.
Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they
indicate specialization or compensation for lack of experience.
Resource Competition
Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no."
As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups.
Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team
is.
The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's
worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may
get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management
or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate
the efforts of another group and just implement something themselves. On and on, the arguments continue.
Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what
happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting
in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT
groups.
With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most
groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers
to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to
various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their
own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction.
Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing
groups, a viable option.
Blamestorming
The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality.
Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time,
so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone
else to blame when things get delayed makes it all too easy to simply stop working for a while.
More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system
outage.
Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and
they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which
means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran
through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose
the problem. The server team doesn't even know how the application runs.
See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate
themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care
of all the other pieces.
I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge
and also get to know other people, which should lessen the propensity to view them as outsiders
Stagnation that is gripping several of the world's largest economies should be viewed as a secular, long term phenomenon, not
something transient. It is connected with the neoliberalism entering a new phase of its development, when New Deal was already
devoured, 90% or so of population standard of living slides and thus there are no direct mechanisms to increase consumer demand.
Notable quotes:
"... Stagnation is gripping several of the world's largest economies and many view this as secular, not transient. ..."
"... Above all, ideology must conceal, denigrate, diminish, slander and distract from the ONE effective strategy that workers collectively have. This is the spectre that haunts all economics. ..."
"... For many of those who consume the bottom layers of it, what they are ingesting is a barbarous Pink Slime cultural sludge that makes them stupid, frivolous, dependent, impulsive and emotionally erratic – something like perpetual 15 year olds. ..."
"... In the center, we have the neoliberals, who are convinced that our world will spontaneously and beneficially organize itself if only we turn the macroeconomic tumblers and stumble on the right interest rate, or inflation rate, or some other version of the One Parameter to Rule Them All mindset. They are also too devoted to the religion of demand-goosing: the idea that everything will be all right as long as we generate enough "demand" – as though it makes no difference whether people are demanding high fructose cotton candy or the collected works of Shakespeare. ..."
"... Profits and income share at the top soared; wages and income share at the bottom fell, and employment was maintained by speculative bubbles and increasing debt until the last bubble burst, and the system collapsed. ..."
"... How is an increasing deficit and QE supposed to solve our problems in this situation other than by propping up a failed system that makes the rich richer and the poor poorer by increasing government debt? ..."
"... It seems quite clear to me that it is going to take a very long time for the system to adjust to this situation in the absence of a fall in the value of the dollar and the concentration of income. That kind of adjustment means reallocating resources in a very dramatic way so as to accommodate an economy in which resources are allocated to serve the demands of the wealthy few in the absence of the ability of those at the bottom to expand their debt relative to income. ..."
"... It was the fall in the concentration of income that led to mass markets (large numbers of people with purchasing power out of income) that made investment profitable after WW II in the absence of speculative bubbles, and it was the increase in the concentration of income that led to the bubble economy we have today that has led us into the Great Recession. ..."
"... I think neoliberalism naturally leads to secular stagnation. This is the way any economic system that is based on increasing of inequality should behave: after inequality reached certain critical threshold, the economy faces extended period of low growth reflecting persistently weak private demand. ..."
"... The focus on monetary policy and the failure to enact fiscal policy options is structural defect of neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hit the USA. 2008 crisis, while discrediting neoliberalism, was clearly not enough for the abandonment of this ideology. Like in most cults adherents became more fanatical believers after the prophecy did not materialized. ..."
"... In a way behaviour of the USA elite in this respect is as irrational as behavior of the USSR elite. My impression is that they will stick to neoliberal ideology to the bitter end. But at the same time they are much more reckless. Recent attempt to solve economic problems by unleashing a new wars and relying of war time mobilization so far did not work. Including the last move is this game: Russia did not bite the offer for military confrontation that the USA clearly made by instilling coup d'état in Ukraine. ..."
This column argues that many economies need both demand-side stimulus and supply-side reform to close the output gap and restore
potential-output growth. A combined monetary-fiscal stimulus – i.e. helicopter money – is needed to close the output gap, and
this should be accompanied with extensive debt restructuring, policies to halt rising inequality, and additional public infrastructure
investment.
Selected Skeptical Comments
Sandwichman -> anne:
Workers, collectively, have a single, incontrovertible lever for effecting change -- withholding their labor power. Nothing
-- not even imprisonment or death -- can prevent workers from withholding their labor power! Kill me and see how much work you
can get out of me.
This is the elementary fact that the elites don't want workers to know. "It is futile!" "It is a fallacy!" "You will only hurt
yourselves!"
Once one comprehends the strategic importance of making the withholding of labor power taboo, everything else falls into place.
Economics actually makes sense as a persuasive discourse to dissuade from the withholding of labor power.
Above all, ideology must conceal, denigrate, diminish, slander and distract from the ONE effective strategy that workers
collectively have. This is the spectre that haunts all economics.
Dan Kervick:
Good stuff by Buiter et al, but here are some suggested additions to the litany of supply side woes:
1. Ineffective economic organization, both inside corporate firms and outside of them.
a. Many corporations are now quite dysfunctional as engines of long-term value creation – but not dysfunctional as vehicles
of short-term value extraction for their absurdly over-incentivized key stakeholders.
b. The developed world societies are facing an extreme failure of strategic economic leadership, at both the national and global
level, and at both the formal level of government and the informal level of visionary public intellectuals and industrial "captains".
There is no coherent consensus on which way lies the direction of progress. Since nobody is setting the agenda for what the future
looks like, risk trumps confidence everywhere and nobody knows what to invest in.
2. Dyspeptic dystopianism. The intellectual culture of our times is polluted by obsessive, nail-biting negativity and
demoralizing storylines preaching hopelessness: the robots are going to destroy all the jobs; the Big One is going to bury everything,
the real "neutral" interest rate is preposterously negative, etc. etc. etc. With so much doom and gloom in the air, there is no
reason to invest wealth, rather than consume it. Robert Schiller touched on this at a recent talk at LSE.
3. The popular culture of 2015 America is – as in so many other areas - a tale of two cultural cities.For many
of those who consume the bottom layers of it, what they are ingesting is a barbarous Pink Slime cultural sludge that makes them
stupid, frivolous, dependent, impulsive and emotionally erratic – something like perpetual 15 year olds. People like this
can be duped by the most shallow demagoguery and consumerist manipulation, and can't organize themselves to pursue their enlightened
self-interest. Enlightened artists and cultural custodians need to step up, organize and find a way to seize the American mind
back from the clutches of consumer capitalist garbage-mongers and philistine society-wreckers.
4. Laissez faire backwardness. We are struggling under left-right-center conspiracy of Pollyanna freedom fools, who
despite their constant kvetching at one another all share in common the view that progress is self-organizing.
On the left we have the Chomsky and Graeber-style "libertarian socialists" who are convinced we could have a functioning and
prosperous society in which seemingly every action is voluntary and spontaneous, nobody is ever compelled to do anything that
their delicate little hearts don't throb to do, and who seemingly have no idea of what it takes even to run a carrot farm.
On the right, we have the clueless paranoid libertarians who think the whole world should revolve around their adolescent desire
not to be "tread on", and seem to have no idea of what it takes – and what it took historically - to build a livable civilization.
In the center, we have the neoliberals, who are convinced that our world will spontaneously and beneficially organize itself
if only we turn the macroeconomic tumblers and stumble on the right interest rate, or inflation rate, or some other version of
the One Parameter to Rule Them All mindset. They are also too devoted to the religion of demand-goosing: the idea that everything
will be all right as long as we generate enough "demand" – as though it makes no difference whether people are demanding high
fructose cotton candy or the collected works of Shakespeare.
5. I'm an optimist! This is all going to change. We have nearly reached Peak Idiocracy. We're on the verge of a new age of
social organization and planning and a return to mixed economy common sense and public-spirited mobilization and adulthood. This
will happen because ultimately all of those teenagers will stop denying reality, and stop struggling to escape the realization
that a more organized and thoughtfully planned way of life is the only thing that will work in our small, resource strapped, crowded
21st century planet.
George H. Blackford:
Since the 80s, US companies have been buying abroad to sell at home as foreign countries used our trade deficits to depress
their exchange rates. Profits and income share at the top soared; wages and income share at the bottom fell, and employment
was maintained by speculative bubbles and increasing debt until the last bubble burst, and the system collapsed.
There seem to be no more bubbles in the offing. The dollar is overvalued. Debt relative to income is unprecedented, and the
concentration of income has created stagnation for lack of investment opportunities.
How is an increasing deficit and QE supposed to solve our problems in this situation other than by propping up a failed
system that makes the rich richer and the poor poorer by increasing government debt? Does anyone really believe this sort
of thing can go on forever in the absence of a fall in the value of the dollar and in the concentration of income? Who's going
to be left holding the bag when this system collapses again?
It seems quite clear to me that it is going to take a very long time for the system to adjust to this situation in the
absence of a fall in the value of the dollar and the concentration of income. That kind of adjustment means reallocating resources
in a very dramatic way so as to accommodate an economy in which resources are allocated to serve the demands of the wealthy few
in the absence of the ability of those at the bottom to expand their debt relative to income.
We didn't smoothly transition from an agricultural economy to one based on manufacturing. That transition was plagued with
a great deal of civil unrest, speculative bubbles, booms and busts that eventually led to a collapse of the system and the Great
Depression.
And we didn't smoothly transition out of the Great Depression. That was ended by WW II and dramatic changes in our economic
system, the most dramatic changes being the role and size of government and the fall in the concentration of income for thirty-five
years after 1940.
It was the fall in the concentration of income that led to mass markets (large numbers of people with purchasing power
out of income) that made investment profitable after WW II in the absence of speculative bubbles, and it was the increase in the
concentration of income that led to the bubble economy we have today that has led us into the Great Recession.
What this means to me is that we are not going to get out of the mess we are in today in the absence of some kind of catastrophe
comparable to WW II if we, and the rest of the world, do not come to grips with the fundamental problem we face in this modern
age, namely, the trade deficit and the concentration of income.
I think neoliberalism naturally leads to secular stagnation. This is the way any economic system that is based on increasing
of inequality should behave: after inequality reached certain critical threshold, the economy faces extended period of low growth
reflecting persistently weak private demand.
An economic cycle enters recession when total spending falls below expected by producers and they realize that production level
is too high relative to demand. What we have under neoliberalism is kind of Marx constant crisis of overproduction.
The focus on monetary policy and the failure to enact fiscal policy options is structural defect of neoliberalism ideology
and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hit the
USA. 2008 crisis, while discrediting neoliberalism, was clearly not enough for the abandonment of this ideology. Like in most
cults adherents became more fanatical believers after the prophecy did not materialized.
The USA elite tried partially alleviate this problem by resorting to military Keynesianism as a supplementary strategy. But
while military budget was raised to unprecedented levels, it can't reverse the tendency. Persistent high output gap is now a feature
of the US economy, not a transitory state.
"Top everything" does not help iether (top cheap oil is especially nasty factor). Recent pretty clever chess gambit to artificially
drop oil price playing Russian card, and sacrificing US shall industry like a pawn (remember that Saudi Arabia is the USA client
state) was a very interesting move, but still expectation are now so low that cheap gas stimulus did not work as expected in the
USA. It would be interesting to see how quickly oil will return to early 2014 price level because of that. That will be the sign
that gambit is abandoned.
In a way behaviour of the USA elite in this respect is as irrational as behavior of the USSR elite. My impression is that
they will stick to neoliberal ideology to the bitter end. But at the same time they are much more reckless. Recent attempt to
solve economic problems by unleashing a new wars and relying of war time mobilization so far did not work. Including the last
move is this game: Russia did not bite the offer for military confrontation that the USA clearly made by instilling coup d'état
in Ukraine.
Now it look like there is a second attempt to play "madman" card after Nixon's administration Vietnam attempt to obtain concession
from the USSR by threatening to unleash the nuclear war.
It was Open Access week last week, but I was too busy trying to meet the deadline today for submitting my book manuscript to
Open Book Publishers . That sounds like a good excuse if one cares
about open access, right? I slept too little for too many days, so don't expect any creative thoughts or subtle analyses from me
tonight. But here's two interesting things I discovered while having a look on the web figuring out whether anything interesting
happend during Open Access week.
First, Cambridge University digitalised the PhD dissertation
of Stephen Hawking and put it online. Apparently the website crashed when that got announced. Any Cambridge University alumni
who want to make their PhD dissertation Open Access
are invited doing so (no more need to go to the reading room and sign a fat notebook that one has accessed a particular PhD dissertation,
as I once did. Although, I should confess, it felt like an adventure. But it's highly inefficient obviously).
Second, for some weeks now, Open Book Publishers has been offering the PDFs of all of their books open access, to celebrate the
100th book they published (their regular regime is to have the books as html open access and selling the PDFs for a few pounds, or
else the author can pay a fee for making the PDF open access).
Importantly, this may only last for another a day or two (I am drawing from my memory when I saw a tweet on that about two months
ago), so while it lasts it may be worth checking out their collection of books in the humanities and the social sciences, such as
Naom Chomsky's Delhi Lectures , Ruth Finnegan's book
on Oral literature in Africa or
textbooks on maths for university .
All for nothing. Because, as their slogan goes, knowledge is for sharing .
Worth mentioning in this context: the CORE project released the final version of their impressive economics textbook "The Economy",
freely (as in CC by-nc-dd licensed) available at http://www.core-econ.org/the-economy/
I think that having open access publishers is great, and I would love to have books published this way. Here's the concern: I
suspect that my University's promotions committee, etc, will view this kind of publication as "inferior" to one with some snazzy
University Press.
I was wondering whether anyone has any advice about how to handle the fact that there are perverse incentives to publish your
work in a format which will cost someone £70, rather than for free?
I don't see a way of changing the situation Steve mentions except by having well established scholars who don't need to worry
about those kinds of thing take the lead. Eg, Ingrid. and David Velleman (who has two books with Open Book, which I greedily downloaded).
And Sam Bowles! -- thanks for the tip ccc, I knew about this from Bowles and had seen parts of it, but not the whole thing which
looks great!
Steve, I fully understand the worry – and even for me (tenured full professor) there is a "status cost" to be paid by not publishing
with an established University Press. But it's a vicious circle that has to be broken – and I agree with Harry, that those of
us who can "afford" to publish Open Access, should do so, in order to try to contribute to the status of the Open Access Press.
I should say that in terms of refereeing – I've published two co-edited books, one with OUP, one with CUP – and the refereeing
process at Open Books was the same, if not better. And a very important advantage of publishing with a publisher such as Open
Books is the much shorter time between delivering the final manuscript and publication – if you do all your work properly, it's
a matter of weeks or a few months, not, as with the established University Presses, (almost) a year (I've always wondered what
the hell happens in that year, especially if they turn back the proofs which are full with typo's!)
I've been thinking someone should write a paper with the title: "If you have tenure, why don't you publish Open Access?"
@3,4: Possibly the switch to open access needs to be done at an institutional level, rather than by individuals.
e.g. A declaration by government evaluations such as the REF that publications won't be counted unless they are open access,
followed by a declaration by your department that publications from now onwards won't be counted for promotions unless they are
open access, might create the right incentives.
[There are potential issues regarding fairness towards academics who are moving between universities . how do you fairly compare
job candidates when one is from a university that demanded open access publication, and another is from a university that didn't?]
Not to make too much of the obvious, given that I'm writing a blog comment, but blogs offer some great opportunities here.
CT readers got to see nearly all of Zombie Economics before the book appeared, and if I ever finish Economics in
Two Lessons it will be long after much of it was posted here.
"This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"
. In the IT job markets such postings are often called purple squirrels
Notable quotes:
"... In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero ..."
"... That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population. ..."
"... The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is. ..."
Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism,
with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it,
the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and
sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There
is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."
The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better)
politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the
population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world
phenomenon" here in the US runs deep.
perfect stranger:
"Religion is just as vulnerable to corporate capture as is the government or the academy."
This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a
tool.
Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in
the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.
DownSouth:
perfect stranger,
Religion, just like human nature, is not that easy to put in a box.
For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative
enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary
spirit.
Examples:
•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King
Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist,
which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?
perfect stranger:
Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from
Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.
You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights.
In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of
enslavement.
In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral
people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral"
and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent
of dividing by zero
DownSouth:
Rex,
I agree.
Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes,
beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."
That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I
suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany
in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.
The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access
to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast,
primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media,
the mass minority is made to appear to be much larger than it really is.
The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say:
"See what a huge upwelling of popular support I am responding to."
JTFaraday:
Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they
are literally and inherently unemployable so that they underestimate and under-sell themselves.
This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment
problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted
to think we should address it politically.
That's where I see this blame the unemployed finger pointing really getting traction these days.
attempter:
I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.
I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse
to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and
we should refuse to let argument range beyond them.
The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full
opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without
it.
psychohistorian:
I am one of those long term unemployed.
I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component
design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom
going back to WEYCOS.
I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance
with the "there is no problem here, move on now" approach.
Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state
of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties
in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to
hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as
defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could
be a current component in a rational labor policy but I digress.
I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.
So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have
more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from
other who may need it more .why set up a society where we have to compete as such for mere existence???????
One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused,
not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required
public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education.
I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided
folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able
to evolve as needed within public focus .IMO.
Ishmael:
Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies
I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting
edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several
years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight
here.
First, most good positions have gate keepers who are professional recruiters. It is near impossible to get
by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing
for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked
at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest
consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior
positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE
firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very
successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters
are incompetent.
Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked
me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went
nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above
the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but
I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed
very assured of myself."
Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember
a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible.
My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use
to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand
for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of
consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that
said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that
no one wants to talk about." CEO do not want any challenges in their organization.
Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These
people are insecure and do not want more senior and experienced people above them and than has resulted in people older than
45 not finding positions.
Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of
the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick
with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time
commented to me, "Your average consulting gig runs longer than our average placement."
With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites
have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism
to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the
client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically
intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment
but I tell people what and where to do it so does that make me a parasite.
Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually
starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their
staff can do and I am not a threat.
I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never
get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where
I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.
Lidia:
Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed
he was lying about his skills and work history.
Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is
not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple
squirrel).
Hosswire
Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves.
I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more
proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach"
people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed,
or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.
I did it because the client, as Yves said, wanted people who were literally in the same job description already.
My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they
looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious.
Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact
that you get to write that piece of paper yourself.
Ishmael:
Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault.
Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to
look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.
I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive
as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on
a winner.
Mannwich:
As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you
nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived
safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars.
What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job
stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view
of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly
doesn't?
Ishmael:
Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the
absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years.
In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired
from outside the orgnanization. Companies want loyalty from an employee but offer none in return.
The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once)
where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that
person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).
Ishmael:
Birch:
The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of
our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers
secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to
them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then
this charade continues inslaving everyone.
This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments
will not let collapse while the blood sucking vampires suck the life out of the assets.
On the other hand, govt is not the answer. Govt is too large and accomplishes too little.
kevin de bruxelles:
The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived
slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be
some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a
similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact
that someone survived the layoffs provides a form social proof for their workplace abilities.
On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise
that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass
immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel
and these two policies will be overturned. We still have a few years to go before this happens.
davver:
Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce
some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require
less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really
contributing to that increase in productivity or is it the machines and methods I created?
Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the
business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel
like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because
they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?
Escariot:
I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting
designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three
years. Now I say out of work, I mean out of our trained and experienced fields.
We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company
and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line
going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck,
which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment,
housing, etc.
Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health
insurance? Retirement accounts? not so much.
Mickey Marzick:
Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you
drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing
in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and
production were concentrated there and workers could STOP production.
Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands
surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception
not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified
this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican.
And I suspect this pattern existed elsewhere. But it is changing too
In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has
always existed in this country. It's a constant reminder for those still working that you could be next – cast out into
the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology
in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against
those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The
"oppressed" very often internalize the value system of the oppressor.
As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that
the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the
prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with
nowhere to else to go.
It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the
Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against
the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this
strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation
of class consciousness among white ethnic industrial workers.
Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere
[SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide
phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.
White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization
of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this
ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate
America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.
Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in
action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended
to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way
before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission
without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence
of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!
FULL and GAINFUL EMPLOYMENT are the ultimate labor power.
Eric:
It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have
a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health
care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody
gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!
James:
Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people
with the right skills"
In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert
in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.
Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it
seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that
currently exists in the USA.
This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing
fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy
the national demand.
The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited
access to labor.
The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers
looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)
I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment.
It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member
or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions?
Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like
Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point,
I certainly hope it does
damien:
It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know
that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and
the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every
bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.
You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired,"
fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced
from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security,
and security of any sort undermines social control.
youniquelikeme:
You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position
and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.
This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming.
The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much
longer.
Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and
out eventually find the courage to fight back and by then, it is usually not with words.
down and out in Slicon Valley:
This is the response I got from a recruiter:
"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12
months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship
you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "
I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued
a patent. Where do I sign up to gain skills required to find a job now?
Litton Graft :
"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism
money can by.
Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the
Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.
I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and
get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work"
or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from
the poor to build fighter jets, write code or network an agency.
Hosswire:
I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to
get you hired, because I was lazy and didn't want to have to talk to someone else next.
So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an
email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.
Francois T :
The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly
that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"
Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here;
some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser
beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies
can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as
simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers.
Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to
execute well to begin with.
And guess what: qualified workers cost money, qualified workers urgently needed cost much more.
This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is
on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe
and India/China.
Kit:
If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt
but thats the way it is in the US today. Let me repeat that : Dead Meat.
I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company
had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my
wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living
hell.
At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash,
moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.
Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but
the experience (to get to this point) almost killed us.
I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't.
We were very lucky to survive intact.
Ming:
Thank you Yves for your excellent post, and for bringing to light this crucial issue.
Thank you to all the bloggers, who add to the richness of the this discussion.
I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the
massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and
trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.
Thank you. No rush of course.
Nexus:
There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed
in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here
are my experiences. Or alternatively the world can be viewed from a broader societal perspective.
In the context of labour there has always been an unequal confrontation between those that control capital and those that offer
their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political
economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics
branched off from political economy and has little value in explaining the real world as the complexity of the world has been
reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and
demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a
simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology.
This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation
of the modern state and the exercise of power and influence within society.
It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly
the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic
of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital
making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via
services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets,
etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders
(including management as shareholders).
The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments
it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of
the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised
in the US – it is not through the will of the people.
For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the
exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as
they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a
pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the
elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection
(health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated)
and out-sourcing/in-sourcing labour is also a representations of this.
The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to
extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has
become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the
goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer
underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since
the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and
pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as
there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to
meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of
in-source may take place as US labour costs will be on par with overseas labour pools.
It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and
the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that
was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital
investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to
the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital
changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex
and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.
S P:
Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was
too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep
up with demand.
It also treats the printing press as a necessary means to fight "deflation."
So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.
The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil
and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.
There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills
programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around
this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution
measures.
The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money,
and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for
everybody, making it fair in a universal sense.
Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of
D.C.
So this whole experiment called America will fail.
"... By David Masciotra, the author of Mellencamp: American Troubadour (University Press of Kentucky). He has also written for Salon, the Atlantic and the Los Angeles Review of Books. For more information visit www.davidmasciotra.com. Originally published at Alternet ..."
"... Robert Reich, in his book Supercapitalism, explains that in the past 30 years the two industries with the most excessive increases in prices are health care and higher education. ..."
"... Using student loan loot and tax subsidies backed by its $3.5 billion endowment, New York University has created a new administrative class of aristocratic compensation. The school not only continues to hire more administrators – many of whom the professors indict as having no visible value in improving the education for students bankrupting themselves to register for classes – but shamelessly increases the salaries of the academic administrative class. The top 21 administrators earn a combined total of $23,590,794 per year. The NYU portfolio includes many multi-million-dollar mansions and luxury condos, where deans and vice presidents live rent-free. ..."
"... As the managerial class grows, in size and salary, so does the full time faculty registry shrink. Use of part time instructors has soared to stratospheric heights at NYU. Adjunct instructors, despite having a minimum of a master's degree and often having a Ph.D., receive only miserly pay-per-course compensation for their work, and do not receive benefits. Many part-time college instructors must transform their lives into daily marathons, running from one school to the next, barely able to breathe between commutes and courses. Adjunct pay varies from school to school, but the average rate is $2,900 per course. ..."
"... New York Times ..."
"... to the people making decisions ..."
"... it's the executives and management generally. Just like Wall Street, many of these top administrators have perfected the art of failing upwards. ..."
"... What is the benefit? What are the risks? ..."
"... Sophomore Noell Conley lives there, too. She shows off the hotel-like room she shares with a roommate . ..."
"... "As you walk in, to the right you see our granite countertops with two sinks, one for each of the residents," she says. A partial wall separates the beds. Rather than trek down the hall to shower, they share a bathroom with the room next door. "That's really nice compared to community bathrooms that I lived in last year," Conley says. To be fair, granite countertops last longer. Tempur-Pedic is a local company - and gave a big discount. The amenities include classrooms and study space that are part of the dorm. Many of the residents are in the university's Honors program. But do student really need Apple TV in the lounges, or a smartphone app that lets them check their laundry status from afar? "Demand has been very high," says the university's Penny Cox, who is overseeing the construction of several new residence halls on campus. Before Central Hall's debut in August, the average dorm was almost half a century old, she says. That made it harder to recruit. " If you visit places like Ohio State, Michigan, Alabama," Cox says, "and you compare what we had with what they have available to offer, we were very far behind." Today colleges are competing for a more discerning consumer. Students grew up with fewer siblings, in larger homes, Cox says. They expect more privacy than previous generations - and more comforts. "These days we seem to be bringing kids up to expect a lot of material plenty," says Jean Twenge, a psychology professor at San Diego State University and author of the book "Generation Me." Those students could be in for some disappointment when they graduate , she says. "When some of these students have all these luxuries and then they get an entry-level job and they can't afford the enormous flat screen and the granite countertops," Twenge says, "then that's going to be a rude awakening." Some on campus also worry about the divide between students who can afford such luxuries and those who can't. The so-called premium dorms cost about $1,000 more per semester. Freshman Josh Johnson, who grew up in a low-income family and lives in one of the university's 1960s-era buildings, says the traditional dorm is good enough for him. ..."
"... "I wouldn't pay more just to live in a luxury dorm," he says. "It seems like I could just pay the flat rate and get the dorm I'm in. It's perfectly fine." In the near future students who want to live on campus won't have a choice. Eventually the university plans to upgrade all of its residence halls. ..."
"... Competition for students who have more sophisticated tastes than in past years is creating the perfect environment for schools to try to outdo each other with ever-more posh on-campus housing. Keeping up in the luxury dorm race is increasingly critical to a school's bottom line: A 2006 study published by the Association of Higher Education Facilities Officers found that "poorly maintained or inadequate residential facilities" was the number-one reason students rejected enrolling at institutions. PHOTO GALLERY: Click Here to See the 10 Schools with Luxury Dorms ..."
"... Private universities get most of the mentions on lists of schools with great dorms, as recent ratings by the Princeton Review, College Prowler, and Campus Splash make clear. But a few state schools that have invested in brand-new facilities are starting to show up on those reviews, too. ..."
"... While many schools offer first dibs on the nicest digs to upperclassmen on campus, as the war for student dollars ratchets up even first-year students at public colleges are living in style. Here are 10 on-campus dormitories at state schools that offer students resort-like amenities. ..."
"... Perhaps some students are afraid to protest for fear of being photographed or videographed and having their face and identity given to every prospective employer throughout America. Perhaps those students are afraid of being blackballed throughout the Great American Workplace if they are caught protesting anything on camera. ..."
"... Mao was perfectly content to promote technical education in the new China. What he deprecated (and fought to suppress) was the typical liberal arts notion of critical thinking. We're witnessing something comparable in the U.S. We're witnessing something comparable in the U.S. ..."
"... Many of the best students feel enormous pressure to succeed and have some inkling that their job prospects are growing narrower, but they almost universally accept this as the natural order of things. Their outlook: if there are 10 or 100 applicants for every available job, well, by golly, I just have to work that much harder and be the exceptional one who gets the job. ..."
"... I read things like this and think about Louis Althusser and his ideas about "Ideological State Apparatuses." While in liberal ideology the education is usually considered to be the space where opportunity to improve one's situation is founded, Althusser reached the complete opposite conclusion. For him, universities are the definitive bourgeois institution, the ideological state apparatus of the modern capitalist state par excellance . The real purpose of the university was not to level the playing field of opportunity but to preserve the advantages of the bourgeoisie and their children, allowing the class system to perpetuate/reproduce itself. ..."
"... My nephew asked me to help him with his college introductory courses in macroeconomics and accounting. I was disappointed to find out what was going on: no lectures by professors, no discussion sessions with teaching assistants; no team projects–just two automated correspondence courses, with automated computer graded problem sets objective tests – either multiple choice, fill in the blank with a number, or fill in the blank with a form answer. This from a public university that is charging tuition for attendance just as though it were really teaching something. All they're really certifying is that the student can perform exercises is correctly reporting what a couple of textbooks said about subjects of marginal relevance to his degree. My nephew understands exactly that this is going on, but still . ..."
"... The reason students accept this has to be the absolutely demobilized political culture of the United States combined with what college represents structurally to students from the middle classes: the only possibility – however remote – of achieving any kind of middle class income. ..."
"... Straight bullshit, but remember our school was just following the national (Neoliberal) model. ..."
Yves here. In May, we wrote up and embedded the report on how NYU exploits students and adjuncts in
"The Art of the Gouge": NYU as a Model for Predatory Higher Education. This article below uses that study as a point of departure
for for its discussion of how higher education has become extractive.
By David Masciotra, the author of Mellencamp: American Troubadour (University Press of Kentucky). He has also written
for Salon, the Atlantic and the Los Angeles Review of Books. For more information visit www.davidmasciotra.com. Originally published
at Alternet
Higher education wears the cloak of liberalism, but in policy and practice, it can be a corrupt and cutthroat system of power
and exploitation. It benefits immensely from right-wing McCarthy wannabes, who in an effort to restrict academic freedom and silence
political dissent, depict universities as left-wing indoctrination centers.
But the reality is that while college administrators might affix "down with the man" stickers on their office doors, many prop
up a system that is severely unfair to American students and professors, a shocking number of whom struggle to make ends meet. Even
the most elementary level of political science instructs that politics is about power. Power, in America, is about money: who has
it? Who does not have it? Who is accumulating it? Who is losing it? Where is it going?
Four hundred faculty members at New York University, one of the nation's most expensive schools, recently released a report on
how their own place of employment, legally a nonprofit institution, has become a predatory business, hardly any different in ethical
practice or economic procedure than a sleazy storefront payday loan operator. Its title succinctly summarizes the new intellectual
discipline deans and regents have learned to master: "The
Art of The Gouge."
The result of their investigation reads as if Charles Dickens and Franz Kafka collaborated on notes for a novel. Administrators
not only continue to raise tuition at staggering rates, but they burden their students with inexplicable fees, high cost burdens
and expensive requirements like mandatory study abroad programs. When students question the basis of their charges, much of them
hidden during the enrollment and registration phases, they find themselves lost in a tornadic swirl of forms, automated answering
services and other bureaucratic debris.
Often the additional fees add up to thousands of dollars, and that comes on top of the already hefty tuition, currently $46,000
per academic year, which is more than double its rate of 2001. Tuition at NYU is higher than most colleges, but a bachelor's degree,
nearly anywhere else, still comes with a punitive price tag. According to the College Board, the average cost of tuition and fees
for the 2014–2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges, and $22,958 for out-of-state
residents attending public universities.
Robert Reich, in his book Supercapitalism, explains that in the past 30 years the two industries with the most excessive increases
in prices are health care and higher education. Lack of affordable health care is a crime, Reich argues, but at least new medicines,
medical technologies, surgeries, surgery techs, and specialists can partially account for inflation. Higher education can claim no
costly infrastructural or operational developments to defend its sophisticated swindle of American families. It is a high-tech, multifaceted,
but old fashioned transfer of wealth from the poor, working- and middle-classes to the rich.
Using student loan loot and tax subsidies backed by its $3.5 billion endowment, New York University has created a new administrative
class of aristocratic compensation. The school not only continues to hire more administrators – many of whom the professors indict
as having no visible value in improving the education for students bankrupting themselves to register for classes – but shamelessly
increases the salaries of the academic administrative class. The top 21 administrators earn a combined total of $23,590,794 per year.
The NYU portfolio includes many multi-million-dollar mansions and luxury condos, where deans and vice presidents live rent-free.
Meanwhile, NYU has spent billions, over the past 20 years, on largely unnecessary real estate projects, buying property and renovating
buildings throughout New York. The professors' analysis, NYU's US News and World Report Ranking, and student reviews demonstrate
that few of these extravagant projects, aimed mostly at pleasing wealthy donors, attracting media attention, and giving administrators
opulent quarters, had any impact on overall educational quality.
As the managerial class grows, in size and salary, so does the full time faculty registry shrink. Use of part time instructors
has soared to stratospheric heights at NYU. Adjunct instructors, despite having a minimum of a master's degree and often having a
Ph.D., receive only miserly pay-per-course compensation for their work, and do not receive benefits. Many part-time college instructors
must transform their lives into daily marathons, running from one school to the next, barely able to breathe between commutes and
courses. Adjunct pay varies from school to school, but the average rate is $2,900 per course.
Many schools offer rates far below the average, most especially community colleges paying only $1,000 to $1,500. Even at the best
paying schools, adjuncts, as part time employees, are rarely eligible for health insurance and other benefits. Many universities
place strict limits on how many courses an instructor can teach. According to a recent study, 25 percent of adjuncts
receive government assistance.
The actual scandal of "The Art of the Gouge" is that even if NYU is a particularly egregious offender of basic decency and honesty,
most of the report's indictments could apply equally to nearly any American university. From 2003-2013, college tuition increased
by a crushing
80 percent. That far outpaces all other inflation. The closest competitor was the cost of medical care, which in the same time
period, increased by a rate of 49 percent. On average, tuition in America rises eight percent on an annual basis, placing it far
outside the moral universe. Most European universities
charge only marginal fees for attendance, and many of them are free. Senator Bernie Sanders recently introduced a bill proposing
all public universities offer free education. It received little political support, and almost no media coverage.
In order to obtain an education, students accept the paralytic weight of student debt, the only form of debt not dischargeable
in bankruptcy. Before a young person can even think about buying a car, house or starting a family, she leaves college with thousands
of dollars in debt: an average of $29,400 in 2012. As colleges continue to suck their students dry of every dime, the US government
profits at $41.3 billion per year by
collecting interest
on that debt. Congress recently cut funding for Pell Grants, yet increased the budget for hiring debt collectors to target delinquent
student borrowers.
The university, once an incubator of ideas and entrance into opportunity, has mutated into a tabletop model of America's economic
architecture, where the top one percent of income earners now owns 40 percent of the wealth.
"The One Percent at State U," an Institute for Policy Studies report, found that at the 25 public universities with the highest
paid presidents, student debt and adjunct faculty increased at dramatically higher rates than at the average state university. Marjorie
Wood, the study's co-author, explained told the New York Times that extravagant executive pay is the "tip of a very large
iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative
spending.
Unfortunately, students seem like passive participants in their own liquidation. An American student protest timeline for 2014-'15,
compiled by historian Angus Johnston, reveals that most demonstrations and rallies focused on police violence, and sexism. Those
issues should inspire vigilance and activism, but only 10 out of 160 protests targeted tuition hikes for attack, and only two of
those 10 events took place
outside the state
of California.
Class consciousness and solidarity actually exist in Chile, where in 2011 a student movement began to organize, making demands
for free college. More than mere theater, high school and college students, along with many of their parental allies, engaged the
political system and made specific demands for inexpensive education. The Chilean government announced that in March 2016, it will
eliminate all tuition from public universities. Chile's victory for participatory democracy, equality of opportunity and social justice
should instruct and inspire Americans. Triumph over extortion and embezzlement is possible.
This seems unlikely to happen in a culture, however, where even most poor Americans view themselves, in the words of John Steinbeck,
as "temporarily embarrassed millionaires." The political, educational and economic ruling class of America is comfortable selling
out its progeny. In the words of one student quoted in "The Art of the Gouge," "they see me as nothing more than $200,000."
At a basic level, I think the answer is yes, because on balance, college still provides a lot of privatized value to the individual.
Being an exploited student with the College Credential Seal of Approval remains relatively much better than being an exploited
non student lacking that all important seal. A college degree, for example, is practically a guarantee of avoiding the
more unseemly parts of the US "justice" system.
But I think this is changing. The pressure is building from the bottom as academia loses credibility as an institution capable
of, never mind interested in, serving the public good rather than simply being another profit center for connected workers. It's
actually a pretty exciting time. The kiddos are getting pretty fed up, and the authoritarians at the top of the hierarchy are
running out of money with which to buy off younger technocratic enablers and thought leaders and other Serious People.
P.S., the author in this post demonstrates the very answer to the question. He assumes as true, without any need for support,
that the very act of possessing a college degree makes one worthy of a better place in society. That mindset is why colleges can
prey upon students. They hold a monopoly on access to resources in American society. My bold:
Adjunct instructors, despite having a minimum of a master's degree and often having a Ph.D., receive only
miserly pay-per-course compensation for their work, and do not receive benefits.
What does having a masters degree or PhD have to do with the moral claim of all human beings to a life of dignity and purpose?
There are so many more job seekers per job opening now than, say, 20 or thirty years ago that a degree is used to sort out
applications. Now a job that formerly listed a high school degree as a requirement may now list a college degree as a requirement,
just to cut down on the number of applications.
So, no, a B.A. or B.S. doesn't confer moral worth, but it does open more job doors than a high school diploma, even if the
actual work only requires high school level math, reading, science or technology.
I agree a phd often makes someone no more useful in society. However the behaviour of the kids is rational *because* employers
demand a masters / phd.
Students are then caught in a trap. Employers demand the paper, often from an expensive institution. The credit is abundant
thanks to govt backed loans. They are caught in a situation where as a collective it makes no sense to join in, but as an individual
if they opt out they get hurt also.
Same deal for housing. It's a mad world my masters.
What can we do about this? The weak link in the chain seems to me to be employers. Why are they hurting themselves by selecting
people who want higher pay but may offer little to no extra value? I work as a programmer and I often think " if we could just
'see' the non-graduate diamonds in the rough".
If employers had perfect knowledge of prospective employees *and* if they saw that a degree would make no difference to their
performance universities would crumble overnight.
The state will never stop printing money via student loans. If we can fix recruitment then universities are dead.
Why are they hurting themselves by selecting people who want higher pay but may offer little to no extra value?
Yeah, I have thought a lot about that particular question of organizational behavior. It does make sense, conceptually, that
somebody would disrupt the system and take people based on ability rather than credentials. Yet we are moving in the opposite
direction, toward more rigidity in educational requirements for employment.
For my two cents, I think the bulk of the answer lies in how hiring specifically, and management philosophy more generally,
works in practice. The people who make decisions are themselves also subject to someone else's decisions. This is true all up
and down the hierarchical ladder, from board members and senior executives to the most junior managers and professionals.
It's true that someone without a degree may offer the same (or better) performance to the company. But they do not offer the
same performance to the people making decisions, because those individual people also depend upon their own college degrees
to sell their own labor services. To hire significant numbers of employees without degrees into important roles is to sabotage
their own personal value.
Very few people are willing to be that kind of martyr. And generally speaking, they tend to self-select away from occupations
where they can meaningfully influence decision-making processes in large organizations.
Absolutely, individual business owners can call BS on the whole scam. It is a way that individual people can take action against
systemic oppression. Hire workers based upon their fit for the job, not their educational credentials or criminal background or
skin color or sexual orientation or all of the other tests we have used. But that's not a systemic solution because the incentives
created by public policy are overwhelming at large organizations to restrict who is 'qualified' to fill the good jobs (and increasingly,
even the crappy jobs).
I am not so sure that this is so. So many jobs are now crapified. When I was made redundant in 2009, I could not find many
jobs that fit my level of experience (just experience! I have no college degree), so I applied for anything that fit my skill
set, pretty much regardless of level. I was called Overqualified. I have heard that in the past as well, but never more so during
that stretch of job hunting. Remember that's with no degree. Maybe younger people don't hear it as much. But I also think life
experience has something to do with it, you need to have something to compare it to. How many times did our parents tell us how
different things were when they were kids, how much easier? I didn't take that on board, did y'all?
For various reasons, people seeking work these days, especially younger job applicants, might not possess the habits of mind
and behavior that would make them good employees – i.e., punctuality, the willingness to come to work every day (even when something
more fun or interesting comes up, or when one has partied hard the night before), the ability to meet deadlines rather than make
excuses for not meeting them, the ability to write competently at a basic level, the ability to read instructions, diagrams, charts,
or any other sort of necessary background material, the ability to handle basic computation, the ability to FOLLOW instructions
rather than deciding that one will pick and choose which rules and instructions to follow and which to ignore, trainability, etc.
Even if a job applicant's degree is in a totally unrelated field, the fact that he or she has managed to complete an undergraduate
degree–or, if relevant, a master's or a doctorate – is often accepted by employers as a sign that the applicant has a sense of
personal responsibility, a certain amount of diligence and educability, and a certain level of basic competence in reading, writing,
and math.
By the same token, employers often assume that an applicant who didn't bother going to college or who couldn't complete a college
degree program is probably not someone to be counted on to be a responsible, trainable, competent employee.
Obviously those who don't go to college, or who go but drop out or flunk out, end up disadvantaged when competing for jobs,
which might not be fair at all in individual cases, especially now that college has been priced so far out of the range of so
many bright, diligent students from among the poor and and working classes, and now even those from the middle class.
Nevertheless, in general an individual's ability to complete a college degree is not an unreasonable stand-in as evidence of
that person's suitability for employment.
Students are first caught in a trap of "credentials inflation" needed to obtain jobs, then caught by inflation in education
costs, then stuck with undischargeable debt. And the more of them who get the credentials, the worse the credentials inflation–a
spiral.
It's all fuelled by loose credit. The only beneficiaries are a managerial elite who enjoy palatial facilities.
As for the employers, they're not so bad off. Wages are coming down for credentialled employees due to all the competition.
There is such a huge stock of degreed applicants that they can afford to ignore anyone who isn't. The credentials don't cost the
employer–they're not spending the money, nor are they lending the money.
Modern money makes it possible for the central authorities to keep this racket going all the way up to the point of general
systemic collapse. Why should they stop? Who's going to make them stop?
The only reason the universities can get away with it is easy money. When the time comes that students actually need to pay
tuition with real money, money they or their parents have actually saved, then college tuition rates will crash back down to earth.
Don't blame the universities. This is the natural and inevitable outcome of easy money.
Yes, college education in the US is a classic example of the effects of subsidies. Eliminate the subsidies and the whole education
bubble would rapidly implode.
I'm very curious if anyone will disagree with that assessment.
An obvious commonality across higher education, healthcare, housing, criminal justice, and national security is that we spend
huge quantities of public money yet hold the workers receiving that money to extremely low standards of accountability for what
they do with it.
Correct, it's not the universities, it's the culture that contains the universities, but the universities are training grounds
for the culture so it is the universities just not only the universities Been remembering the song from my college days "my futures
so bright i gotta wear shades". getting rich was the end in itself, and people who didn't make it didn't deserve anything but
a whole lot of student debt,creating perverse incentives. And now we all know what the A in type a stands for at least among those
who self identify as such, so yes it is the universities
I don't understand why the ability to accept guaranteed loan money doesn't come with an obligation by the school to cap tuition
at a certain percentage over maximum loan amount? Would that be so hard to institute?
Student loans are debt issuance. Western states are desperate to issue debt as it's fungible with money and marked down as
growth.
Borrow 120K over 3 years and it all gets paid into university coffers and reappears as "profit" now. Let some other president
deal with low disposable income due to loan repayments. It's in a different electoral cycle – perfect.
You can try to argue, but it will be hard to refute. If you give mortgages at teaser rates to anybody who can fog a mirror,
you get a housing bubble. If you give student loans to any student without regard to the prospects of that student paying back
the loan, you get a higher education bubble. Which will include private equity trying to catch as much of this money as they possibly
can by investing in for profit educational institutions just barely adequate to benefit from federal student loan funds.
A lot of background conditions help. It helps to pump a housing bubble if there's nothing else worth investing in (including
saving money at zero interest rates). It helps pump an education bubble if most of the jobs have been outsourced so people are
competing more and more for fewer and fewer.
I don't disagree with the statement that easy money has played the biggest role in jacking up tuition. I do strongly disagree
that we shouldn't "blame" the universities. The universities are exactly where we should place the blame. The universities have
become job training grounds, and yet continue to droll on and on about the importance of noble things like liberal education,
the pursuit of knowledge, the importance of ideas, etc. They cannot have it both ways. Years ago, when tuition rates started escalating
faster than inflation, the universities should have been the loudest critics – pointing out the cultural problems that would accompany
sending the next generation into the future deeply indebted – namely that all the noble ideas learned at the university would
get thrown out the window when financial reality forced recent graduates to chose between noble ideas and survival. If universities
truly believed that a liberal education was important; that the pursuit of knowledge benefitted humanity – they should have led
the charge to hold down tuition.
I took it to mean blame as in what allows the system to function. I heartily agree that highly paid workers at universities
bear blame for what they do (and don't do) at a granular level.
It's just that they couldn't do those things without the system handing them gobs of resources, from tax deductability of charitable
contributions to ignoring anti-competitive behavior in local real estate ownership to research grants and other direct funding
to student loans and other indirect funding.
Regarding blaming "highly paid workers at universities" – If a society creates incentives for dysfunctional behavior such a
society will have a lot of dysfunction. Eliminate the subsidies and see how quicly the educational bubble pops.
You are ignoring the way that the rich bid up the cost of everything. 2% of the population will pay whatever the top dozen
or so schools will charge so that little Billy or Sue can go to Harvard or Stanford. This leads to cost creep as the next tier
ratchet up their prices in lock step with those above them, etc. The same dynamic happens with housing, at least around wealthy
metropolitan areas.
A European perspective on this: yep, that's true on an international perspective. I belong to the ugly list of those readers
of this blog who do not fully share the liberal values of most of you hear. However, may I say that I can agree on a lot of stuff.
US education and health-care are outrageously costly. Every European citizen moving to the states has a question: will he or
she be sick whilst there. Every European parent with kids in higher education is aware that having their kids for one closing
year in the US is the more they can afford (except if are a banquier d'affaires ). Is the value of the US education good? No doubt!
Is is good value for money, of course not. Is the return on the money ok? It will prove disastrous, except if the USD crashed.
The main reason? Easy money. As for any kind of investment. Remember that this is indeed a investment plan
Check the level of revenues of "public sector" teaching staff on both sides of the ponds. The figure for US professionals in
these area are available on the Web. They are indeed much more costly than, say, North-of-Europe counterparts, "public sector"
professionals in those area. Is higher education in the Netherlands sub-par when compared to the US? Of course not.
Yep financing education via the Fed (directly or not) is not only insanely costly. Just insane. The only decent solution: set
up public institutions staffed with service-minded professionals that did not have to pay an insane sum to build up the curriculum
themselves.
Are "public services" less efficient than private ones here in those area, health-care and higher education. Yep, most certainly.
But, sure, having the fed indirectly finance the educational system just destroy any competitive savings made in building a competitive
market-orientated educational system and is one of the worst way to handle your educational system.
Yep, you can do a worst use of the money, subprime or China buildings But that's all about it.
US should forget about exceptionnalism and pay attention to what North of Europe is doing in this area. Mind you, I am Southerner
(of Europe). But of course I understand that trying to run these services on a federal basis is indeed "mission impossible".
Way to big! Hence the indirect Washington-decided Wall-Street-intermediated Fed-and-deficit-driven financing of higher education.
Mind you: we have more and more of this bankers meddling in education in Europe and I do not like what I see.
@washunate – 6/26/15, 11:03 am. I know I'm late to the party, but I disagree. It's not the workers, it's the executives
and management generally. Just like Wall Street, many of these top administrators have perfected the art of failing upwards.
IMNSHO everyone needs to stop blaming labor and/or the labor unions. It's not the front line workers, teachers, retail clerks,
adjunct instructors, all those people who do the actual work rather than managing other people. Those workers have no bargaining
power, and the unions have lost most of theirs, in part due to the horrible labor market, as well as other important reasons.
We have demonized virtually all of the government workers who actually do the work that enables us to even have a government
(all levels) and to provide the services we demand, such as public safety, education, and infrastructure. These people are our
neighbors, relatives and friends; we owe them better than this.
Unionized support staff at Canadian universities have had sub-inflation wage increases for nearly 20 years, while tuition has
been rising at triple the rate of inflation.
So obviously one can't blame the unions for rising education costs.
Omitted from this account: Federal funding for education has declined 55% since 1972. Part of the Powell memo's agenda.
It's understandable too; one can hardly blame legislators for punishing the educational establishment given the protests of
the '60s and early '70s After all, they were one reason Nixon and Reagan rose to power. How dare they propose real democracy!
Harumph!
To add to students' burden, there's the recent revision of bankruptcy law: student loans can no longer be retired by bankruptcy
(Thanks Hillary!) It'll be interesting to see whether Hillary's vote on that bankruptcy revision becomes a campaign issue.
I also wonder whether employers will start to look for people without degrees as an indication they were intelligent enough
to sidestep this extractive scam.
I'd be curious what you count as federal funding. Pell grants, for example, have expanded both in terms of the number of recipients
and the amount of spending over the past 3 – 4 decades.
More generally, federal support for higher ed comes in a variety of forms. The bankruptcy law you mention is itself a form
of federal funding. Tax exemption is another. Tax deductabiliity of contributions is another. So are research grants and exemptions
from anti-competitive laws and so forth. There are a range of individual tax credits and deductions. The federal government also
does not intervene in a lot of state supports, such as licensing practices in law and medicine that make higher ed gatekeepers
to various fiefdoms and allowing universities to take fees for administering (sponsoring) charter schools. The Federal Work-Study
program is probably one of the clearest specific examples of a program that offers both largely meaningless busy work and terrible
wages.
As far as large employers seeking intelligence, I'm not sure that's an issue in the US? Generally speaking, the point of putting
a college credential in a job requirement is precisely to find people participating in the 'scam'. If an employer is genuinely
looking for intelligence, they don't have minimum educational requirements.
Why would tuition rates come down when students need to pay with "real money, money they or their parents have actually saved.
. . " ? Didn't tuition at state universities begin climbing when state governments began boycotting state universities in terms
of embargoing former rates of taxpayer support to them? Leaving the state universities to try making up the difference by raising
tuition? If people want to limit or reduce the tuition charged to in-state students of state universities, people will have to
resume paying former rates of taxes and elect people to state government to re-target those taxes back to state universities the
way they used to do before the reductions in state support to state universities.
Protest against exploitation and risk being black-listed by exploitative employers -> Only employers left are the ones who
actually do want (not pretend to want) ethical people willing to stand up for what they believe in. Not many of those kind of
employers around . What is the benefit? What are the risks?
The author misrepresents the nature and demands of Chile's student movement.
Over the past few decades, university enrollment rates for Chileans expanded dramatically in part due to the creation of many
private universities. In Chile, public universities lead the pack in terms of academic reputation and entrance is determined via
competitive exams. As a result, students from poorer households who attended low-quality secondary schools generally need to look
at private universities to get a degree. And these are the students to which the newly created colleges catered to.
According to Chilean legislation, universities can only function as non-profit entities. However, many of these new institutions
were only nominally non-profit entities (for example, the owners of the university would also set up a real estate company that
would rent the facilities to the college at above market prices) and they were very much lacking in quality. After a series of
high-profile cases of universities that were open and shut within a few years leaving its students in limbo and debt, anger mounted
over for-profit education.
The widespread support of the student movement was due to generalized anger about and education system that is dearly lacking
in quality and to the violation of the spirit of the law regulating education. Once the student movement's demands became more
specific and morphed from opposing for profit institutions to demanding free tuition for everyone, the widespread support waned
quickly.
And while the government announced free tuition in public universities, there is a widespread consensus that this is a pretty
terrible idea as it is regressive and involves large fiscal costs. In particular because most of the students that attend public
universities come from relatively wealthy households that can afford tuition. The students that need the tuition assistance will
not benefit under the new rules.
I personally benefited from the fantastically generous financial aid systems that some private American universities have set
up which award grants and scholarships based on financial need only. And I believe that it is desirable for the State to guarantee
that any qualified student has access to college regardless of his or her wealth I think that by romanticizing the Chilean student
movement the author reveals himself to be either is dishonest or, at best, ignorant.
Students aren't protesting because they don't feel the consequences until they graduate.
One thing that struck me when I applied for a student loan a few years back to help me get through my last year of graduate
school – the living expense allocation was surprisingly high. Not "student sharing an apartment with five random dudes while eating
ramen and riding the bus", but more "living alone in a nice one-bedroom apartment while eating takeout and driving a car". Apocryphal
stories of students using their student loans to buy new cars or take extravagant vacations were not impossible to believe.
The living expense portion of student loans is often so generous that students can live relatively well while going to school,
which makes it that much easier for them to push to the backs of their minds the consequences that will come from so much debt
when they graduate. Consequently, it isn't the students who are complaining – it's the former students. But by the time
they are out of school and the university has their money in its pocket, it's too late for them to try and change the system.
Sophomore Noell Conley lives there, too. She shows off the hotel-like room she shares with a roommate.
"As you walk in, to the right you see our granite countertops with two sinks, one for each of the residents," she says.
A partial wall separates the beds. Rather than trek down the hall to shower, they share a bathroom with the room next door.
"That's really nice compared to community bathrooms that I lived in last year," Conley says.
To be fair, granite countertops last longer. Tempur-Pedic is a local company - and gave a big discount. The amenities include
classrooms and study space that are part of the dorm. Many of the residents are in the university's Honors program. But do student
really need Apple TV in the lounges, or a smartphone app that lets them check their laundry status from afar?
"Demand has been very high," says the university's Penny Cox, who is overseeing the construction of several new residence halls
on campus. Before Central Hall's debut in August, the average dorm was almost half a century old, she says. That made it harder
to recruit.
"If you visit places like Ohio State, Michigan, Alabama," Cox says, "and you compare what we had with what they have
available to offer, we were very far behind."
Today colleges are competing for a more discerning consumer. Students grew up with fewer siblings, in larger homes, Cox says.
They expect more privacy than previous generations - and more comforts.
"These days we seem to be bringing kids up to expect a lot of material plenty," says Jean Twenge, a psychology professor at
San Diego State University and author of the book "Generation Me."
Those students could be in for some disappointment when they graduate, she says.
"When some of these students have all these luxuries and then they get an entry-level job and they can't afford the enormous
flat screen and the granite countertops," Twenge says, "then that's going to be a rude awakening."
Some on campus also worry about the divide between students who can afford such luxuries and those who can't. The so-called
premium dorms cost about $1,000 more per semester. Freshman Josh Johnson, who grew up in a low-income family and lives
in one of the university's 1960s-era buildings, says the traditional dorm is good enough for him.
"I wouldn't pay more just to live in a luxury dorm," he says. "It seems like I could just pay the flat rate and
get the dorm I'm in. It's perfectly fine."
In the near future students who want to live on campus won't have a choice. Eventually the university plans to upgrade all of
its residence halls.
So I wonder who on average will fair better navigating the post-college lifestyle/job market reality check, Noell or Josh?
Personally, I would bet on the Joshes living in the 60's vintage enamel painted ciderblock dorm rooms.
Competition for students who have more sophisticated tastes than in past years is creating the perfect environment for
schools to try to outdo each other with ever-more posh on-campus housing. Keeping up in the luxury dorm race is increasingly critical
to a school's bottom line: A 2006 study published by the Association of Higher Education Facilities Officers found that
"poorly maintained or inadequate residential facilities" was the number-one reason students rejected enrolling at institutions.
PHOTO GALLERY: Click Here to See the 10 Schools with Luxury Dorms
Private universities get most of the mentions on lists of schools with great dorms, as recent ratings by the Princeton Review,
College Prowler, and Campus Splash make clear. But a few state schools that have invested in brand-new facilities are starting
to show up on those reviews, too.
While many schools offer first dibs on the nicest digs to upperclassmen on campus, as the war for student dollars ratchets
up even first-year students at public colleges are living in style. Here are 10 on-campus dormitories at state schools that offer
students resort-like amenities.
Bingo! They don't get really mad until they're in their early thirties and they are still stuck doing some menial job with
no vacation time, no health insurance and a monstrous mountain of debt. Up until that point they're still working hard waiting
for their ship to come in and blaming themselves for any lack of success like Steinbeck's 'embarrassed millionaires.' Then one
day maybe a decade after they graduate they realize they've been conned but they've got bills to pay and other problems to worry
about so they solider on. 18 year-olds are told by their high school guidance councilors, their parents and all of the adults
they trust that college while expensive is a good investment and the only way to succeed. Why should they argue? They don't know
any better yet.
Perhaps some students are afraid to protest for fear of being photographed or videographed and having their face and identity
given to every prospective employer throughout America. Perhaps those students are afraid of being blackballed throughout the
Great American Workplace if they are caught protesting anything on camera.
Today isn't like the sixties when you could drop out in the confidence that you could always drop back in again. Nowadays there
are ten limpets for every scar on the rock.
the average is such a worthless number. The Data we need, and which all these parasitic professional managerial types won't
provide –
x axis would be family income, by $5000 increments.
y axis would be the median debt level
we could get fancy, and also throw in how many kids are in school in each of those income increments.
BTW – this 55 yr. old troglodyte believes that 1 of the roles (note – I did NOT say "The Role") of education is preparing people
to useful to society. 300++ million Americans, 7 billion humans – we ALL need shelter, reliable and safe food, reliable and safe
water, sewage disposal, clothing, transportation, education, sick care, power, leisure, we should ALL have access to family wage
jobs and time for BBQs with our various communities several times a year. I know plenty of techno-dweebs here in Seattle who need
to learn some of the lessons of 1984, The Prince, and Shakespeare. I know plenty of fuzzies who could be a bit more useful with
some rudimentary skills in engineering, or accounting, or finance, or stats, or bio, or chem
I don't know what the current education system is providing, other than some accidental good things for society at large, and
mainly mechanisms for the para$ite cla$$e$ to stay parasites.
Mao was perfectly content to promote technical education in the new China. What he deprecated (and fought to suppress) was
the typical liberal arts notion of critical thinking. We're witnessing something comparable in the U.S.
This suppression in China led to an increase in Mao's authority (obviously), but kept him delusional. For example, because
China relied on Mao's agricultural advice, an estimated 70 million Chinese died during peacetime. But who else was to be relied
upon as an authority?
Back the the U.S.S.A. (the United StateS of America): One Australian says of the American system: "You Yanks don't consult
the wisdom of democracy; you enable mobs."
Mao was perfectly content to promote technical education in the new China. What he deprecated (and fought to suppress)
was the typical liberal arts notion of critical thinking. We're witnessing something comparable in the U.S. We're witnessing
something comparable in the U.S.
Mao liked chaos because he believed in continuous revolution. I would argue what we're experiencing is nothing comparable to
what China experienced. (I hope I've understood you correctly.)
I am pretty sure a tradition of protest to affect political change in the US is a rather rare bird. Most people "protest" by
changing their behavior. As an example, by questioning the value of the 46,000 local private college tuition as opposed the the
15k and 9k tiered state college options. My daughter is entering the freshman class next year, we opted for the cheaper state
option because, in the end, a private school degree adds nothing, unless it is to a high name recognition institution.
I think, like housing, a downstream consequence of "the gouge" is not to question - much less understand - class relations,
but to assess the value of the lifetyle choice once you are stuck with the price of paying for that lifestyle in the form of inflated
debt repayments. Eventually "the folk" figure it out and encourage cheaper alternatives toward the same goal.
There's probably little point in engaging in political protest. Most people maximise their chances of success by focusing on
variables over which they have some degree of control. The ability of most people to have much effect on the overall political-economic
system is slight and any returns from political activity are highly uncertain.
How does anyone even expect to maintain cheap available state options without political activity? By wishful thinking I suppose?
The value of a private school might be graduating sooner, state schools are pretty overcrowded, but that may not at all be
worth the debt (I doubt it almost ever is on a purely economic basis).
Maybe if we just elect the right people with cool posters and a hopey changey slogan, they'll take care of everything for us
and we won't have to be politically active.
Of course refusal to engage politically because the returns to oneself by doing so are small really IS the tragedy of the commons.
Thus one might say it's ethical to engage politically in order to avoid it. Some ethical action focuses on overcoming tragedy
of the commons dilemmas. Of course the U.S. system being what it is I have a hard time blaming anyone for giving up.
The middle class, working class and poor have no voice in politics or policy at all, and they don't know what's going on until
it's too late. They've been pushed by all their high school staff that college is the only acceptable option - and often it is.
What else are they going to do out of high school, work a 30 hour a week minimum wage retail job? The upper middle class and rich,
who entirely monopolize the media, don't have any reason to care about skyrocketing college tuition - their parents are paying
for it anyway. They'd rather write about the hip and trendy issues of the day, like trigger warnings.
Speaking as one of these college students, I think that a large part of the reason that the vast majority of students are just
accepting the tuition rates is because it has become the societal norm. Growing up I can remember people saying "You need to go
to college to find a good job." Because a higher education is seen as a necessity for most people, students think of tuition as
just another form of taxes, acceptable and inevitable, which we will expect to get a refund on later in life.
I teach at a "good" private university. Most of my students don't have a clue as to how they're being exploited. Many of
the best students feel enormous pressure to succeed and have some inkling that their job prospects are growing narrower, but they
almost universally accept this as the natural order of things. Their outlook: if there are 10 or 100 applicants for every available
job, well, by golly, I just have to work that much harder and be the exceptional one who gets the job.
Incoming freshmen were born in the late 90s - they've never known anything but widespread corruption, financial and corporate
oligarchy, i-Pads and the Long Recession.
But as other posters note, the moment of realization usually comes after four years of prolonged adolescence, luxury dorm living
and excessive debt accumulation.
Most Ph.D.'s don't either. I'd argue there have been times they have attempted to debate that exploitation is a good–for their
employer and himself/herself–with linguistic games. Mind numbing . To be fair, they have a job.
I have watched the tuition double–double!–at my alma mater in the last eleven years. During this period, administrators have
set a goal of increasing enrollment by a third, and from what I hear, they've done so. My question is always this: where is the
additional tuition money going? Because as I walk through the campus, I don't really see that many improvements–yes, a new building,
but that was supposedly paid for by donations and endowments. I don't see new offices for these high-priced admin people that
colleges are hiring, and in fact, what I do see is an increase in the number of part-time faculty and adjuncts. The tenured faculty
is not prospering from all this increased revenue, either.
I suspect the tuition is increasing so rapidly simply because the college can get away with it. And that means they are exploiting
the students.
While still a student, I once calculated that it cost me $27.00/hour to be in class. (15 weeks x 20 "contact hours" per week
=
300 hours/semester, $8000/semester divided by 300 hours = $27.00/hour). A crude calculation, certainly, but a starting point.
I did this because I had an instructor who was consistently late to class, and often cancelled class, so much that he wiped out
at least $300.00 worth of instruction. I had the gall to ask for a refund of that amount. I'm full of gall. Of course, I was laughed
at, not just by the administrators, but also by some students.
Just like medical care, education pricing is "soft," that is, the price is what you are willing to pay. Desirable students
get scholarships and stipends, which other students subsidize; similarly, some pre-ACA patients in hospitals were often treated
gratis.
Students AND hospital patients alike seem powerless to affect the contract with the provider. Reform will not likely be forthcoming,
as students, like patients, are "just passing through."
The tuition at most public universities has quadrupled or more over the last 15 to 20 years precisely BECAUSE state government
subsidies have been
slashed in the meantime. I was told around 2005 that quadrupled tuition at the University of Minnesota made up for about half
of the state money that the legislature had slashed from the university budget over the previous 15 years.
It is on top of that situation that university administrators are building themselves little aristocratic empires, very much
modeled on the kingdoms of corporate CEOs
where reducing expenses (cutting faculty) and services to customers (fewer classes, more adjuncts) is seen as the height of responsibility
and accountability, perhaps
even the definition of propriety.
Everyone should read the introductory chapter to David Graeber's " The Utopia of Rules: On Technology, Stupidity and the Secret
Joys of Bureaucracy."
In Chapter One of this book entitled "The Iron law of Liberalism and the Era of Total Bureaucratization" Graeber notes that
the US has become the most rigidly credentialised society in the world where
" in field after field from nurses to art teachers, physical therapists, to foreign policy consultants, careers which used
to be considered an art (best learned through doing) now require formal professional training and a certificate of completion."
Graeber, in that same chapter, makes another extremely important point. when he notes that career advancement in may large
bureaucratic organizations demands a willingness to play along with the fiction that advancement is based on merit, even though
most everyone know that this isn't true.
The structure of modern power in the U.S., in both the merging public and private sectors, is built around the false ideology
of a giant credentialized meritorcracy rather than the reality of arbitrary extraction by predatory bureaucratic networks.
Anecdote: I was speaking to someone who recently started working at as a law school administrator at my alma mater. Enrollment
is actually down at law schools (I believe), because word has spread about the lame legal job market. So, the school administration
is watching its pennies, and the new administrator says the administrators aren't getting to go on so many of the all expense
paid conferences and junkets that they used to back in the heyday. As I hear this, I am thinking about how many of these awesome
conferences in San Diego, New Orleans and New York that I'm paying back. Whatever happened to the metaphorical phrase: "when a
pig becomes a hog, it goes to slaughter"?
Another anecdote: I see my undergrad alma mater has demolished the Cold War era dorms on one part of campus and replaced it
with tons of slick new student housing.
No doubt those Cold War era dorms had outlived their planned life. Time for replacement. Hell, they had probably become inhabitable
and unsafe.
Meanwhile, has your undergraduate school replaced any of its lecture courses with courses presented same model as on-line traffic
school? I have a pending comment below about how my nephew's public university "taught" him introductory courses in accounting
and macroeconomics that way. Please be assured that the content of those courses was on a par with best practices in the on-line
traffic school industry. It would be hilarious if it weren't so desperately sad.
I read things like this and think about Louis Althusser and his ideas about "Ideological State Apparatuses." While in liberal
ideology the education is usually considered to be the space where opportunity to improve one's situation is founded, Althusser
reached the complete opposite conclusion. For him, universities are the definitive bourgeois institution, the ideological state
apparatus of the modern capitalist state par excellance. The real purpose of the university was not to level the playing
field of opportunity but to preserve the advantages of the bourgeoisie and their children, allowing the class system to perpetuate/reproduce
itself.
It certainly would explain a lot. It would explain why trying to send everyone to college won't solve this, because not everyone
can have a bourgeois job. Some people actually have to do the work. The whole point of the university as an institution was to
act as a sorting/distribution hub for human beings, placing them at certain points within the division of labor. A college degree
used to mean more because getting it was like a golden ticket, guaranteeing someone who got it at least a petit-bourgeois lifestyle.
The thing is, there are only so many slots in corporate America for this kind of employment. That number is getting smaller too.
You could hand every man, woman, and child in America a BS and it wouldn't change this in the slightest.
What has happened instead, for college to preserve its role as the sorting mechanism/preservation of class advantage is what
I like to call degree inflation and/or an elite formed within degrees themselves. Now a BS or BA isn't enough, one needs an Master's
or PhD to really be distinguished. Now a degree from just any institution won't do, it has to be an Ivy or a Tier 1 school. Until
we learn to think realistically about what higher education is as an institution little or nothing will change.
Any credential is worthless if everybody has it. All information depends on contrast. It's impossible for everybody to "stand
out" from the masses. The more people have college degrees the less value a college degree has.
When I was half-grown, I heard it said that religion is no longer the opiate of the masses, in that no one believes in God
anymore, at least not enough for it to change actual behavior.
Instead, buying on credit is the opiate of the masses.
My nephew asked me to help him with his college introductory courses in macroeconomics and accounting. I was disappointed
to find out what was going on: no lectures by professors, no discussion sessions with teaching assistants; no team projects–just
two automated correspondence courses, with automated computer graded problem sets objective tests – either multiple choice, fill
in the blank with a number, or fill in the blank with a form answer. This from a public university that is charging tuition for
attendance just as though it were really teaching something. All they're really certifying is that the student can perform exercises
is correctly reporting what a couple of textbooks said about subjects of marginal relevance to his degree. My nephew understands
exactly that this is going on, but still .
This is how 21st century America treats its young people: it takes people who are poor, in the sense that they have no assets,
and makes them poorer, loading them up with student debt, which they incur in order to finance a falsely-so-called course of university
study that can't be a good deal, even for the best students among them.
I am not suggesting the correspondence courses have no worth at all. But they do not have the worth that is being charged for
them in this bait-and-switch exercise by Ed Business.
After further thought, I'd compare my nephew's two courses to on-line traffic school: Mechanized "learning" – forget it all
as soon as the test is over – Critical thinking not required. Except for the kind of "test preparation" critical thinking that
teaches one to spot and eliminate the obviously wrong choices in objective answers–that kind of thinking saves time and so is
very helpful.
Not only is he paying full tuition to receive this treatment, but his family and mine are paying taxes to support it, too.
Very useful preparation for later life, where we can all expect to attend traffic school a few times. But no preparation for
any activity of conceivable use or benefit to any other person.
I read recently that the business establishment viewed the most important contribution of colleges was that they warehoused
young people for four years to allow maturing.
Where are the young people in all this? Is anyone going to start organizing to change things? Any ideas? Any interest? Are
we going to have some frustrated, emotional person attempt to kill a university president once every ten years? Then education
can appeal for support from the government to beef up security. Meanwhile the same old practices will prevail and the rich get
richer and the rest of us get screwed.
The reason students accept this has to be the absolutely demobilized political culture of the United States combined with
what college represents structurally to students from the middle classes: the only possibility – however remote – of achieving
any kind of middle class income.
Really your choices in the United States are, in terms of jobs, to go into the military (and this is really for working class
kids, Southern families with a military history and college-educated officer-class material) or to go to college.
The rest, who have no interest in the military, attend college, much like those who wanted to achieve despite of their class
background went into the priesthood in the medieval period. There hasn't been a revolt due to the lack of any idea it could function
differently and that American families are still somehow willing to pay the exorbitant rates to give their children a piece of
paper that still enables them to claim middle class status though fewer and fewer find jobs. $100k in debt seems preferable to
no job prospects at all.
Colleges have become a way for the ruling class to launder money into supposed non-profits and use endowments to purchase stocks,
bonds, and real estate. College administrators and their lackeys (the extended school bureaucracy) are propping up another part
of the financial sector – just take a look at Harvard's $30+ billion endowment, or Yale's $17 billion – these are just the top
of a very large heap. They're all deep into the financial sector. Professors and students are simply there as an excuse for the
alumni money machine and real estate scams to keep running, but there's less and less of a reason for them to employ professors,
and I say this as a PhD with ten years of teaching experience who has seen the market dry up even more than it was when I entered
grad school in the early 2000s.
"Colleges have become a way for the ruling class to launder money into supposed non-profits and use endowments to purchase
stocks, bonds, and real estate. "
Unorthodoxmarxist, I thought I was the only person who was coming to that conclusion. I think there's data out there that could
support our thesis that college tuition inflation may be affecting real estate prices. After all, justification a college grad
gave to someone who was questioning the value of a college degree was that by obtaining a "a degree" and a professional job, an
adult could afford to buy a home in major metropolitan hubs. I'm not sure if he was that ignorant, (business majors, despite the
math requirement are highly ideological people. They're no where near as objective as they like to portray themselves as) or if
he hasn't been in contact with anyone with a degree trying to buy a home in a metropolitan area.
Anyways, if our thesis is true, then if home prices declined in 2009, then college tuition should have declined as well, but
it didn't at most trustworthy schools. Prospective students kept lining up to pay more for education that many insiders believe
is "getting worse" because of widespread propaganda and a lack of alternatives, especially for "middle class" women.
It's hard to say, but there ought to be a power keg of students here primed to blow. And Bernie Sanders' proposal for free
college could be the fuse.
But first he'd have the light the fuse, and maybe he can. He's getting huge audiences and a lot of interest these days. And
here's a timely issue. What would happen if Sanders toured colleges and called for an angry, mass and extended student strike
across the country to launch on a certain date this fall or next spring to protest these obscene tuitions and maybe call for something
else concrete, like a maximum ratio of administrators to faculty for colleges to receive accreditation?
It could ignite not only a long-overdue movement on campuses but also give a big boost to his campaign. He'd have millions
of motivated and even furious students on his side as well as a lot of motivated and furious parents of students (my wife and
I would be among them) - and these are just the types of people likely to get out and vote in the primaries and general election.
Sanders' consistent message about the middle class is a strong one. But here's a solid, specific but very wide-ranging issue
that could bring that message into very sharp relief and really get a broad class of politically engaged people fired up.
I'm not one of those who think Sanders can't win but applaud his candidacy because it will nudge Hillary Clinton. I don't give
a fig about Clinton. I think there's a real chance Sanders can win not just the nomination but also the presidency. This country
is primed for a sharp political turn. Sanders could well be the right man in the right place and time. And this glaring and ongoing
tuition ripoff that EVERYONE agrees on could be the single issue that puts him front-and-center rather than on the sidelines.
I finished graduate school about three years ago. During the pre-graduate terms that I paid out of pocket (2005-2009) I saw
a near 70 percent increase in tuition (look up KY college tuition 1987-2009 for proof).
Straight bullshit, but remember our school was just following the national (Neoliberal) model.
Though, realize that I was 19-23 years old. Very immature (still immature) and feeling forces beyond my control. I did not
protest out of a) fear [?] (I don't know, maybe, just threw that in there) b) the sheepskin be the path to salvation (include
social/cultural pressures from parent, etc.).
I was more affected by b). This is the incredible power of our current Capitalist culture. It trains us well. We are always
speaking its language, as if a Classic. Appraising its world through its values.
I wished to protest (i.e. Occupy, etc.) but to which master? All of its targets are post modern, all of it, to me, nonsense,
and, because of this undead (unable to be destroyed). This coming from a young man, as I said, still immature, though I fear this
misdirection, and alienation is affecting us all.
This is about neoliberalism, not about the structure of the university education and the amount of social courses required
to get an STEM degree. The article is a baloney in this sense. And because neoliberalism defy regulation Google and
Facebook were able to built " amazingly sophisticated, computer-driven engines for extracting users' personal information
and data trails, refining them for sale to advertisers in high-speed data-trading auctions that are entirely unregulated and
opaque to everyone except the companies themselves."
Notable quotes:
"... Put simply, what Google and Facebook have built is a pair of amazingly sophisticated, computer-driven engines for extracting users' personal information and data trails, refining them for sale to advertisers in high-speed data-trading auctions that are entirely unregulated and opaque to everyone except the companies themselves. ..."
"... Democracy in America ..."
"... All of which brings to mind CP Snow's famous Two Cultures lecture, delivered in Cambridge in 1959, in which he lamented the fact that the intellectual life of the whole of western society was scarred by the gap between the opposing cultures of science and engineering on the one hand, and the humanities on the other – with the latter holding the upper hand among contemporary ruling elites. Snow thought that this perverse dominance would deprive Britain of the intellectual capacity to thrive in the postwar world and he clearly longed to reverse it. ..."
"... Lack of education in the humanities is not the reason for misuse of the tech giant's products, as the author so emphatically states. It simply comes down to greed. That human drive to make more, more and more leads them to overlook things for the sake of making more. A class in political science or sociology is not going to change that. ..."
"... Zuckerberg and similar folks are guilty of the same thing that most people are - greed. Monetary greed is just one part. ..."
"... As for education, it's not easy to get an engineering or comp sci degree. But while you are getting hammered in classes that are far more complex than most other things taught on the campus, you do indeed have to take a variety of other non-technical electives outside of your technical major to complete the overall curriculum. ..."
"... This likely has been pointed out already, but the American University system requires all students to take a core of humanities classes regardless of major. SO they actually have been exposed to, most likely, a fair number of Western Civ, History, and Literature courses. Their deficiency I think lays more in the utopian roots of the internet and technology development of the 1990s. They have been strangely naive and ruthless at the same time, and its changing human interactions and society sometimes for the better and sometimes for the worse. ..."
"... Wow, if there ever was an example of why Trump won, the utter and complete self righteousness of the American liberal, this post is it. Congratulations. ..."
"... If you've every hung out in Silicon Valley with techies you'd know that mild sociopathy is indeed likely part of the problem. ..."
"... Capitalists will do what capitalists do. So ignoring social consequences in the pursuit of money is baked-in. Doesn't matter what your education is. In fact, class has more to do with their blindness than the lack of a liberal arts education. ..."
"... It ties in with what many of the fake-news-complainers are reluctant to discuss: there is an ocean of sociological/economic 'facts' that exist somewhere between 'easily-provable lie' and 'this may be a lie to the elite, but it is a true fact for the unwashed masses'. and in tandem with that: the uneasy questions about censorship that come with *any* attempt at regulating the press. ..."
"... This is too simple. The development of critical thought is the key thing and it isn't monopolized by any discipline. People without any qualifications and without much education can - and do - exercise critical ability. The problem is a cultural one. Consumerism and the pretend world in which people 'think' they can be what they want and live in make believe soaps is the problem. ..."
"... "If you have an issue with tech giants messing around with your personal data, don't give them your personal data." They'll take your personal data, regardless. Because they make money from selling it. ..."
One of the biggest puzzles about our current predicament with fake news and the weaponisation of social media is why the folks
who built this technology are so taken aback by what has happened. Exhibit A is the founder of Facebook,
Mark Zuckerberg
, whose political education
I recently chronicled . But he's not alone. In fact I'd say he is quite representative of many of the biggest movers and shakers
in the tech world. We have a burgeoning genre of "
OMG, what
have we done? " angst coming from former Facebook and Google employees who have begun to realize that the cool stuff they worked
on might have had, well, antisocial consequences.
Put simply, what Google and Facebook have built is a pair of amazingly sophisticated, computer-driven engines for extracting
users' personal information and data trails, refining them for sale to advertisers in high-speed data-trading auctions that are entirely
unregulated and opaque to everyone except the
companies themselves.
The purpose of this infrastructure was to enable companies to target people with carefully customised commercial messages and,
as far as we know, they are pretty good at that. (Though
some advertisers
are beginning to wonder if these systems are quite as good as Google and Facebook claim.) And in doing this, Zuckerberg, Google co-founders
Larry Page and Sergey Brin
and
co wrote themselves licenses to print money and build insanely profitable companies.
It never seems to have occurred to them that their engines could be used to deliver ideological and political messages
It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological
and political messages to voters. Hence the obvious question: how could such smart people be so stupid? The cynical answer is they
knew about the potential dark side all along and didn't care, because to acknowledge it might have undermined the aforementioned
licenses to print money. Which is another way of saying that most tech leaders are sociopaths. Personally I think that's unlikely,
although among their number are some very peculiar characters: one thinks, for example, of Paypal co-founder
Peter Thiel – Trump's favourite techie; and Travis Kalanick, the founder of Uber.
So what else could explain the astonishing naivety of the tech crowd? My hunch is it has something to do with their educational
backgrounds. Take the Google co-founders. Sergey Brin
studied mathematics and computer science. His partner, Larry Page, studied engineering and computer science. Zuckerberg dropped out
of Harvard, where he was studying psychology and computer science, but seems to have been more interested in the latter.
sWhy Facebook is in a hole over data mining | John Naughton
Now mathematics, engineering and computer science are wonderful disciplines – intellectually demanding and fulfilling. And they
are economically vital for any advanced society. But mastering them teaches students very little about society or history – or indeed
about human nature. As a consequence, the new masters of our universe are people who are essentially only half-educated. They have
had no exposure to the humanities or the social sciences, the academic disciplines that aim to provide some understanding of how
society works, of history and of the roles that beliefs, philosophies, laws, norms, religion and customs play in the evolution of
human culture.
We are now beginning to see the consequences of the dominance of this half-educated elite. As one perceptive observer
Bob O'Donnell puts it, "a liberal arts major familiar
with works like Alexis de Tocqueville's Democracy in America , John Stuart Mill's
On Liberty , or even the work of ancient
Greek historians, might have been able to recognise much sooner the potential for the 'tyranny of the majority' or other disconcerting
sociological phenomena that are embedded into the very nature of today's social media platforms. While seemingly democratic at a
superficial level, a system in which the lack of structure means that all voices carry equal weight, and yet popularity, not experience
or intelligence, actually drives influence, is clearly in need of more refinement and thought than it was first given."
All of which brings to mind CP Snow's famous
Two Cultures lecture, delivered in Cambridge in 1959, in which he lamented the fact that the intellectual life of the whole of
western society was scarred by the gap between the opposing cultures of science and engineering on the one hand, and the humanities
on the other – with the latter holding the upper hand among contemporary ruling elites. Snow thought that this perverse dominance
would deprive Britain of the intellectual capacity to thrive in the postwar world and he clearly longed to reverse it.
Snow passed away in 1980, but one wonders what he would have made of the new masters of our universe. One hopes that he might
see it as a reminder of the old adage: be careful what you wish for – you might just get it.
Lack of education in the humanities is not the reason for misuse of the tech giant's products, as the author so emphatically
states. It simply comes down to greed. That human drive to make more, more and more leads them to overlook things for the sake
of making more. A class in political science or sociology is not going to change that.
Middle and high school in the US need to tackle more philosophy, history and other humanities instead of force feeding kids test
material for them to simply memorize. Then, lo and behold, by the time kids get into university, they may already have grasped
the basics of human analytical skills. Why wait till further education?
Wtf? All this hue and cry that Facebook has "ruined" democracy ... and I see you've actually bought into it. Holy cow, who knew
a few hundred thousand $$ gets Brexit and Trump done while $1 billion in actual adverts cannot elect Clinton?
Goodness, that's some powerful analytica, no? You guys should really hear yourselves ... you sound utterly deranged by this
Trump thing!
If we are all concerned, we can remedy 'the problem'. Chuck Cable, ( I did 7 years ago), get off facebook, twitter and the like.
We are all subject to the marketing, the allure of 'like' thinking, etc. Yet we need to 'grow up' mature, and be concerned about
this path. Our youth is our hope, but if they are indoctrinated and sucked into the social network mess, I do not see a future
or much hope. Yes, it is all about marketing, greed, and ego. Pretty difficult to overcome. Soul searching, integrity, and sincere
concern for democracy is crucial.
It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted
ideological and political messages to voters. Hence the obvious question: how could such smart people be so stupid?
So stupid? Is the author claiming to have known this in advance of it happening?
A yes...science. "Once they go up, who cares where they come down, that's not my department, says Werner Von Braun" (Tom Leher)
Man kind has always been willing to subjugate it's essential humanity for the elusive goal of "progress". The computer age is
no different.
Well, actually , they did. Slaves were not allowed to vote in the UK either. And, one must remember, it was the UK that introduced
slavery to North America which was, after all, a British colony ruled by British courts and British jurisprudence at that juncture.
Anyone who finishes engineering cannot be classified as a dim bulb. It's only understood by those that go through it how difficult
it is in comparison to other things. The complexity is hard to explain to anyone outside of it. Most people fail out or quit,
literally, and those are the ones that at least gave it a try. I watched many such people go on to the business or other schools
and rush a frat and barely study and ace their courses. They said straight up that it wasn't even close.
Zuckerberg and similar folks are guilty of the same thing that most people are - greed. Monetary greed is just one part.
Additionally, there's a ton of ego there to want to do things others haven't done or can't do or aren't doing, but ego is not
exclusive to the tech industry. They were negligent in looking the other way while their products were exploited and they hid
under freedom of speech, providing a functionality that isn't necessarily tied with or promotes nefarious conduct so they aren't
responsible when it does. There's no shortage of this through years - radio, TV, nuclear power, guns, drug paraphernalia, chemicals,
photo copiers, MP3 players and file copying services like Napster, on and on. It's not just technical items.
It's all about making money. Twitter is sitting back absolutely loving every Trump tweet, while individually at least some
or many of the people there hate the actual tweets themselves or at least think the POTUS should be communicating in a better
manner and put this ad hoc approach aside. I don't know of too many that think he's doing good things for the country or world
or even his self image and reputation with it and should continue. But for Twitter it promotes their product and service and stock
and pay check and bonus and livelihood. So the greed wins out.
As for education, it's not easy to get an engineering or comp sci degree. But while you are getting hammered in classes
that are far more complex than most other things taught on the campus, you do indeed have to take a variety of other non-technical
electives outside of your technical major to complete the overall curriculum. But there's only so much you can do, only so
much time and interest. You can't necessarily expect each and everyone to be incredibly well rounded without at least sacrificing
their ability to focus and specialize in their strength and interest. Pretty much every doctor I've met is aloof to some degree.
Accountants have trouble thinking outside the strict confines of the accounting box. I know plenty of lawyers who aren't great
with technology or computers. And few people in those professions that are also incredibly versed in the things the author mentions.
Few have time to be once life and family kicks in.
This likely has been pointed out already, but the American University system requires all students to take a core of humanities
classes regardless of major. SO they actually have been exposed to, most likely, a fair number of Western Civ, History, and Literature
courses. Their deficiency I think lays more in the utopian roots of the internet and technology development of the 1990s. They
have been strangely naive and ruthless at the same time, and its changing human interactions and society sometimes for the better
and sometimes for the worse.
He said he was "half educated" not because he finished only half of his comp sci degree (or even psychology) but because he wasn't
educated in other subjects that may have given him insight into human behavior and sociology. There may be some truth to that
but it seems kind of a stretch since pretty much most people are as he describes; he just seems to be picking on Zuckerberg since
he developed something with such huge influence and is now on the hot seat for being at least naive if not deliberately looking
the other way while his platform was used in ways he probably didn't envision or want but made them a ton of money. Most people
aren't really that educated or versed in the things the author mentions, and that includes many people outside of the tech industry
who could never accomplish what Zuckerberg or others have accomplished.
A 4-year engineering degree already takes 5 years to complete (at least for a dim bulb like myself). We already have to take a
bunch of non-technical social science, history, and English "core" classes.
Way to miss the point. Zuckerberg is poorly educated in understanding human behavior. I could've told these tech yokels exactly
what was becoming of their practices.
It's no coincidence that the people I know who eschew things like Twitter and Facebook are the techy people who can remember
the internet in the good ol' days when the maxim was "don't tell anyone anything about anything".
God, I remember that feeling. Still on a modem and proudly watching people excitedly get into the Internet. And then I watched
on in utter horror as they give away their real names. I didn't understand why people didn't understand. You can discard a mask
- you can't discard your face!
And you fail to realize that your existence is not, never has and never will be an island that removes you from the rest of humanity.
It is irrelevant to the rest of us if you volunteer to be ignorant of the rest of us, and yet you think that only if everyone
else was like you the problem would be solved.
Sorry but, our existence is inherently governed by the fact that we are social animals and part of an Earth based biosphere
and politically that requires we show more than smug diffidence. I realise that religions have spent the last 2000 years or so
trying to separate us from each other and nature, by pretending we have individual souls far more important than our collective
being, but that's not an excuse either.
"While seemingly democratic at a superficial level, a system in which the lack of structure means that all voices carry
equal weight, and yet popularity, not experience or intelligence, actually drives influence, is clearly in need of more refinement
and thought than it was first given"
Erm. The inevitable effect of connection-seeking in a low friction environment is called The Singularity and people have
been warning about it for at least the last couple of decades now.
Congratulations. You've recognized the Problem. Now, if you really want to look smart, explain why nobody involved wants to
implement the Solution...
I have a feeling your poor friends get the Big picture while you dont. Trumps get elected while you are offline. Brexit happens
while you are offline cause Cambridge Analytica and Farage .. well they work hard at protecting certain interests. And so on..
is about information wars and power. And their consequences on democracy. And you might not be immediately affected If you are
white male and from an OK bakground. If you are privileged and well off maybe even your children will make it in the offline bubble.
But what about the rest?
The UK history on democracy isn't exactly a roll call of enlightened thinking either. The only gains were made by often violent
demonstrations by The Chartists and Suffragettes. But at least the UK never banned black people from voting.
You are not a nice person. Thinking that people you imagine aren't as intelligent or don't see the world the way you see it deserve
dieing from poverty or opioid overdoses is quite unpleasant.
Sure, pick on the engineers. They make more money than you do. But if your half-courage took a leap forward, you'd target the
quarter-educated people who are driving this because they control the spending. But then, they're also the people you're asking
for a job aren't they?
Wow, if there ever was an example of why Trump won, the utter and complete self righteousness of the American liberal, this
post is it. Congratulations.
You never had a "democracy" ... or if you had one, it was in the very dim past and limited to propertied men ... in recent
times, you've had a two-party oligarchy managed by military-tech corporations. Oh, those good old days of limited choice and Vietnam,
how can we ever go back to those, amirite?
Gosh, I guess they were not joking when they talked about the "global village" ... and anyone knows a village is full of gossip
and half-truths.
I feel like almost every other day i need to point out to my hyperventilating Russia-fearing friends that you all do realize
that all of this online-ness is voluntary, right? That a person can have a complete and real existence with no Facebook profile,
not Tweet, none of that? I'm one such person, and I work in tech.
Are media companies prevented by regulation from reporting "fake news". In any supermarket you'll spot newspapers with headlines
to the effect that "My Mother-in-Law is a Space Alien". Now, while I'd guess that is true some of the time, I have a hard time
believing that there are really that many space aliens around harassing their earthling inlaws. I'm not aware that that reporting
is regulated. Are you saying it is?
The vow claimed by Brin and other Google founders, "Do No Evil," should have been a warning. In a New Yorker piece on tech's influence
on the election last summer, a Facebook employee was quoted as saying, "We joke about who we should give the election to." It
has recently come out that as Apple, the most traitorous of all the giant tech corporations that are a product of the American
educational system (before it was strangled by Republicans like Trump and Betsy DeVos), traitorous because they pay no corporate
taxes in the U.S., had an opportunity to choose between making phones and PDAs addictive pleasure machines or responsible news
devices. They chose addictive pleasures, because it's obviously more profitable, like McDonald's supersizing its French fries
and sugary drinks.
They've created a generation of Americans who will swallow anything that's fed to them ("It must be true. I read it on the
Internet."). These are the people who love Trump, who don't understand or care about the Constitution or the Bill of Rights and
would probably vote against them in a referendum (which some Republicans have promoted as a new Constitutional Convention). Their
minds have become morbidly obese, filled with Angry Birds and empty Twitter posts that leave them unable to comprehend ideas that
take more than 140 characters to express.
Such people deserve their fate (poverty, death by opioids), but it's tragic and evil that they are wrecking the planet with
climate change denial (which, of course, justifies unregulated pollution), science denial (in which Evangelical Christians commit
the child abuse of denying evolution and trying to prohibit its teaching.Such Fake Christians also reject most of Jesus' liberal
teachings.)
Here in the SF Bay Area it's hard to avoid knowing some of these techies. They aren't all clueless about social interaction,
arrogant, selfish, and contemptuous of other people--only 90% of them. The remainder scratch their heads, smile, cash their paychecks
and stock options, and retire to multimillion dollar ranches to write cookbooks and make wine.
So now we have a population of tech geeks who don't know much but think they know everything, who spout "Do No Evil," while
doing the ultimate evil--making a world unsafe for democracy but a pleasure palace for the rich, using a technology that is a
uniquely American product of an educational system that was once a shining example and is now in shambles to destroy the dream
of democracy that America used to champion, but does no longer.
It makes the coming Chinese domination of the world seem like cosmic justice, doesn't it?
More degrees in the humanities is no antidote to or remedy for amoral/harmful tech and those who create and market it. Nor is
this a problem of white privilege and lack of inclusiveness -- minorities run after tech goodies with the same glee as everyone
else.
Schools and just about everyone are promoting STEM degrees as the way to a good job and prosperity, and I don't foresee
anybody creating jobs for philosophers to warn us against new tech developments.
This is one of those dangers that people don't foresee. They only see it when it's happened. Now it has; depending on how bad
the fallout, the pushback and regulation will follow. Not sure if it will be sufficient, though. Especially under an Administration
with little respect for facts or truth while it pursues the maximum dollar gain from the government before skedaddling.
If you've every hung out in Silicon Valley with techies you'd know that mild sociopathy is indeed likely part of the problem.
But the argument that it's because their education lacked learning about history or society is a bit silly when you consider
the bulk of the population has probably not studied such disciplines beyond high school and some of the greatest engineers who
invented or built some of the most important creations in history lacked a degree in the humanities.
What differentiates past engineering eras from present is political and societal will to ensure inventions are used for the
good of humanity. In short, a lack of regulation in the face of rampant neo-liberal capitalism that has enthralled the politicians
who should be looking out for the public, not themselves and their cronies.
Facebook et al should long ago have been classified as media companies and regulated as such. Start hitting Zuckerburg with
billions in fines and/or the threat of regulating him out of business and you'd very quickly see those much vaunted algorithms
and engineering prowess spring into action to tackle the fake news and propaganda epidemic.
Ahh, yeah Aruler...thanks for that....I think....!
If you read this article and his former article on the subject(a big if), then you would be able to enlighten us on exactly
what Laughton means by such comments as below. I actually completed my degree and so am 'fully educated but still struggle with
the logic:-
"the hero's education rendered him incapable of understanding the world into which he was born. For although he was supposed
to be majoring in psychology at Harvard, the young Zuckerberg mostly took computer science classes until he started Facebook
and dropped out
Your post referenced economics, not social issues.
It seems that once the State expands to the size it is now (~43% of GDP is directly spent by government) then virtually everything
becomes political: economics, politics, social.
(ps if i've got this horribly wrong and libertarianism as a word has just been coopted to mean 'minarchist' i apologise)
I suppose it depends on how you define "libertarian". I, and most of the theorists I read, see it as a quite broad label which
stretches from anarchism at one (extreme) end, to small-state minarchism at the other.
And yes, I am "right-wing" in terms of economics (though fascism, typically described as a "far-right" movement, is actually
quite far-left in terms of economics, which is why I try to avoid debating these matters in terms of left/right. But when people
self-describe that way, one doesn't have much choice).
So, yes, I prefer no (or minimal) State involvement in areas of the economy that it is possible to have private suppliers compete
against each other. So that includes healthcare (but not all healthcare; the time-critical nature of A&E services means
they are not amenable to real competition), education, and various other things most people are used to having provided by their
governments.
But the "natural monopolies" (things like roads/railways/pipelines/sewers) can't really be provided by competing suppliers,
so it's reasonable that they are owned (but not necessarily run) by the State. So taxes need to be raised to pay for those things.
Unlike most minarchists, though, I see outright, allodial land ownership as unjustifiable (it's a capital good that no one
created, and thus no-one can claim rightful ownership). So in that regard also I'm quite left-wing.
Capitalists will do what capitalists do. So ignoring social consequences in the pursuit of money is baked-in. Doesn't matter
what your education is. In fact, class has more to do with their blindness than the lack of a liberal arts education.
yeah, but if you read this article (big if) he's calling him 'half-educated' because he has a shoddy background in social systems
that has left him ignorant of a vast body of historical knowledge and political theory, not because he didn't finish his degree.
maybe you should try reading the article and/or writing comments relevant to it...
If it were the Iate 15th century there would be a similar article decrying the printing press and if the 19th, the postage stamp.
Newspapers have been targeting a partisan readership long before social media came along and all controlled & managed by humanities
graduates. Conrad Black & Boris Johnson hardly exemplars of a solid grounding in humanities leading to informed decision making
overcoming self interest.
this half-baked education has left him bewildered and rudderless
He is now claiming that Zuckerberg is 'half-educated'. Just because he did not complete his degree?! This surely does not make
him half-educated? Does that mean that those who do not have a degree are not educated? This smells a little of scholastic snobbery
from our former Cambridge University graduate and Vice President !
What's so appalling is that I don't even think they have the slightest inkling that what you've just posted is the absolute reality
of these types.
They are so convinced they're right, and that everything they think must prevail, that they simply ignore democracy and anything
else that shows that they're actually completely wrong.
You mean you're not economically right wing? Minimal taxes, less state intervention in the economy (including health), etc? Your
post referenced economics, not social issues. Socially we agree on a lot, probably nearly everything to be honest - I'm all for
legalising based on harm caused by drugs, less military, anti snooper's charter/surveillance, etc, but I like taxes and I like
the NHS, and that is where I think you're right wing and I am left! (ps if i've got this horribly wrong and libertarianism as
a word has just been coopted to mean 'minarchist' i apologise)
....Yes, to a certain extent that can happen via reading, but the biggest check on privilege and self-satisfaction is actually
engaging with actual other people who don't share that privilege. And that just isn't happening at Stanford and Harvard....
As someone who grew up both first-world-poor and a nerd i cannot expres in words how much i hate that 'the elite' keeps insisting
that *the truth* about life and love and everything can only be found in a mixture of greec classics and trips to india. You are
only 'enlightened' if you have the time and money to read those books and make those trips and most importantly: if you come home
from all that with the right opinions about detesting money, detesting xenophobia, etc.
they pat themselves on the back any time they listen to what they insist is 'an outsider' but is just someone of a different gender/color
parroting back their own believes.
It ties in with what many of the fake-news-complainers are reluctant to discuss: there is an ocean of sociological/economic
'facts' that exist somewhere between 'easily-provable lie' and 'this may be a lie to the elite, but it is a true fact for the
unwashed masses'. and in tandem with that: the uneasy questions about censorship that come with *any* attempt at regulating the
press.
This is too simple. The development of critical thought is the key thing and it isn't monopolized by any discipline. People
without any qualifications and without much education can - and do - exercise critical ability. The problem is a cultural one.
Consumerism and the pretend world in which people 'think' they can be what they want and live in make believe soaps is the problem.
"If you have an issue with tech giants messing around with your personal data, don't give them your personal data."
They'll take your personal data, regardless. Because they make money from selling it.
"A "liberal arts" education is now a selling point in some schools." Presumably schools from families so wealthy, the children
will never have to worry about competing with 6 billion other people for a job someday.
The author concerns are naive and misplaced (although he probably advocated the interests of the group to which he belongs).
MBA, Master of Business Administration gradates are indoctrinated neoliberals. This is about neoliberalism, not about the structure
of the university education and the amount of social coursers required to get an STEM degree.
Notable quotes:
"... First off, full disclosure: I'm in tech, so I'm an insider. I also absolutely agree that tech has a huge, huge problem with understanding the consequences of our actions. But it's a little bit naïve to act as though taking another year or two of humanities classes would magically prevent tech leaders from making antisocial products. ..."
"... Trump is the quintessential Exceptional American, weaponized. The Trump Organization constructed more than 180 skyscrapers and major properties worldwide within every cesspool of political, military, religious, organized crime, and civil corruption. Trump is the toughest SOB on the planet - and the most experienced. And he's ours. I stand with Trump. ..."
"... "It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological and political messages to voters." That was supposed to be reserved for exclusive use of the Democratic Party. ..."
"... The writer clearly does not know much about the US higher education system where engineers and scientists cannot get away without taking humanities courses, unlike the UK. ..."
Power and influence are not just a battle between STEM and Humanities, though. You've missed the MBA, Master of Business Admistration.
They are the ones who control everything now.
It may have been the case some decades ago, but now it is Managerialism, in the guise of a whole ideology that has sprung from
MBA's, that rules over both the STEM and Humanities workers.
From mid- and large- private companies, to the public sector, they all speak the same language and it is the language of the
MBA. Corporate visions of embracing customer focused cost control while empowering our core mission values.
Time for an article on Managerialism, as it is the air we breathe these days.
Your username rather contradicts the assertions you make about your political orientation..
Well let's have a look at some typical libertarian policies. Recreational drugs decriminalised. The dismantling of the surveillance
State. Stop covering for Israel's crimes in the UN. A much-reduced military that was for purely defensive purposes. How're they
"right-wing", exactly?
My recent example is saying "It's like Quixote tiltiing at windmills" only to find the others, 6 or 7 people all with Firsts in
STEM had no idea what I was on about. Also saying "It's far too Heath-Robinson" had the same effect.
It does dismay me how clever many of my colleagues are, but how painfully narrow their knowledge is. They study their subject
(and I suspect most of that is just for career development i.e. love of money rather than knowledge) but little else.
Our culture has a bad attitude to wisdom in general. Each generation is taught to disregard the old timers, what can they possibly
know about anything?
I guess it's all how the plutocracy like it. Their media can tell us that the Crusades were a defensive war and nobody knows
enough to disagree. They can continually role out nonsense about the "good guys and the evil guys" to explain world problems and
again, nobody knows anything other than that.
Democracy is a political philosophy. Socialism is an economic theory.
Socialism is not an "economic" theory. Socialism (and I use the term in its original, Marxist sense: State ownership & control
of the means of production, distribution, and exchange) has absolutely no economic theory behind it. Nowhere did Marx tell his
followers how to run their economies; after they'd won, the Bolsheviks and Maoists were on their own. No wonder millions starved.
It's impossible to make rational economic calculations in a socialist commonwealth because there is no price signal mechanism.
Hence communist countries' famous gluts and shortages.
At its height, despite the fact its economy was much simpler than any here in the West's, economists of the USSR were setting
the prices of more than 5 million items, and even they admitted it would have been impossible without knowing (and copying) the
prices that arose in our (relatively) free-market economies.
In fact, they joked that once "the revolution" was complete and communism had taken over the world, they'd be required to have
some small country remain free-market capitalist so they could have some clue about what prices should be.
And I have no idea of who concocted the "famous quote".
Lulz. You walked into that one: Alexis de Tocqueville
I can't up-vote this enough. MIT, for example, requires eight semesters of humanities for all undergraduates, regardless of major.
If you talk to the faculty in the humanities dept, they'll tell you how much they enjoy teaching there, because they get really
intelligent students who can think rigorously. (And also because they're almost all tenured professors -- not underpaid "adjuncts".)
Yes, there are a certain percentage of students who meet the stereotype of being socially awkward and not very interested in
thinking about things outside of their science and technology focus, but they're not the majority and are more than balanced by
the bulk of the student body who could hold their own in any liberal arts program in the world.
We live in a plutocracy and we get the tech that the plutocrats want us to have. Drives on diversity aren't working because
those non-white-upper-middle-class-males who get the roles, are those who behave exactly the same as the white-upper-middle-class
elite. So the changes are literally skin deep.
Sadly, most of the women I've encountered at the top of the corporate tree have either been there through nepotism (e.g. MD's
daughter or mistress) or been promoted way beyond their level of competence and have compensated for that with drink, drugs or
appalling bullying.
The educated, savvy women all seem to baled out long before they reach that level!
Harvard required class of 1964 freshmen to read the published version "The Two Cultures" the summer before they matriculated.
The general knowledge of college friends who were scientists and mathematicians (and went on to become university professors)
was at least equal to other friends specializing in social sciences and humanities, because suburban American high schools in
wealthy communities provide a good general education up to age 18, not 16 as in British public, comprehensive and grammar schools,
and because American university courses require a large fraction of a student's course work lie outside their department of specialization.
Snow wrote about the British system. He deplored the willful scientific ignorance of many members of the British Civil Service
of this acquaintance. His comments were not intended for or relevant to the American experience. A bright American student, as
these computer tech executives' work histories show they must have been, will have gained familiarity with both "cultures" by
the time they started their college courses. Their college experiences will have built upon this familiarity.
In my opinion It is inappropriate to blame the failure to regulate internet speech properly upon the education of American
tech leaders. Corbyn and whoever replaces Trump will remedy theunderlying issues because they know unregulated capitalism cannot
be trusted to act responsibly.
But often the customers don't know exactly what they want and constantly want to make changes.
True. "It's just what we asked for, but it's not what we want!", viz. Nimrod. And sometimes a supplier provides a system that
they say is perfect for the task required, yet once it's installed it clearly is nothing of the sort. The customer's ex-MD retires
to the sun, counting his backhander and giggling hysterically. I've encountered that more than once during my career, too.
So what about those teaching and learning 'digital humanities', is this subject then a contradiction in terms? Surly these divides
are redundant as subjects become multi disciplinary in our digital age, each will influence the other in new and interesting ways.
There is no uninventing available to us here only the effort in rebalancing in how we value what it is to be human.
First off, full disclosure: I'm in tech, so I'm an insider. I also absolutely agree that tech has a huge, huge problem
with understanding the consequences of our actions. But it's a little bit naïve to act as though taking another year or two of
humanities classes would magically prevent tech leaders from making antisocial products.
For one thing, more people in tech have humanities backgrounds than you might think (I do--I'm a software developer and educator
with a BA from Stanford and am finishing an MSEE, and I have a fair number of colleagues with similarly mixed educational backgrounds).
For another, Mark Zuckerberg founded Facebook when he was was what, 20? It's foolish to act like you can turn a 20-year-old, *any*
20-year-old, into a wise and thoughtful human who can understand all the consequences of their actions by sticking them in a classroom
for another year or two. I certainly was a moron when I was 20. Shockingly, I was also a moron when I was 22. College kids just
still have a lot of growing up to do.
Don't get me wrong, I work a lot with high schoolers and university students, and I'm a very big proponent of education. But
the thing that makes the biggest difference in knocking adolescent heads is exposing kids to people that aren't like them. Yes,
to a certain extent that can happen via reading, but the biggest check on privilege and self-satisfaction is actually engaging
with actual other people who don't share that privilege. And that just isn't happening at Stanford and Harvard.
I'm white and the child of college-educated parents; at Stanford I still felt out of place, weird, and poor. I was surrounded
by people who went to skiing in Switzerland at Christmas and had boats; it wasn't a world I was familiar with or understood. That
effect is only magnified for kids of color or from more marginalized backgrounds, sprinkled lightly across classrooms that are
overwhelmingly white and privileged. The idea that a white, middle-class kid -- even a gay female kid like me -- would be right
near the bottom of the privilege scale I think tells you just about everything about that university culture that you need to
know.
What's happening in tech is part of the sickness of our entire social and economic system; it's a toxic mixture of privilege
perpetuating privilege, in terms of race and class and gender and money and access. Tech doesn't create antisocial products by
itself. Having a lot of rich white kids sitting around discussing Plato in a classroom might make them more well-rounded on paper,
but if you then still funnel them then into a money sea dominated by bro culture and VCs, with no necessity or encouragement to
engage with people who live outside that bubble, you're still going to get people who are shocked, shocked!! to learn that their
products have negative consequences for the lives of the people on the other side of the screen. Lots of *workers* in tech do
partially bridge that gap, in one way or another. But the people at the top, making the decisions, are selected overwhelmingly
by being white dudes who fit the "poorly socialized iconoclast" mold that VCs understand and then massively isolated by the enormous
*heaps of cash* that investors have thrown at them to make something the investors think will get them the best return on their
investment. *No part* of that is good for society writ large, beginning to end, in very large part because investors have no reason
to care what happens to anyone else.
Here's an example! At this stage, anyone in tech who doesn't think that they're working on making every worker in the world,
*including themselves*, obsolete, is deluding themselves. But most of us *do* know that and keep showing up for work, because
we don't know any other way of paying our bills. We know that social and political action is needed, a lot of us are agitating
for precisely that, but we can't do it on our own, and we have a pretty realistic idea about what kind of future lies for us and
our families if we just decide to walk away from the industry. I'm a little too old to really be a millennial, but this is the
rock and the hard place, for people even 3 years younger than I am, who graduated from college just in time for the crash: if
you're in tech, you're keeping your head above water, barely. If you're not, you're working constantly with no benefits or security,
just so you can live with your parents and form a punchline about avocados.
If you want to check tech, you need *political will.* You have to check the money, because it's never going to check itself.
And if you want to make Silicon Valley actually become capable of making the utopian tech it likes to believe it can produce,
it also wouldn't hurt to check the *overwhelming* bias in tech hiring and in elite education towards people who are white, privileged,
and just like everybody else who's already there.
I once met a man in a Texas prison who was incarcerated for programming a banks software to divert small fractions of (rounded
off) pennies to his personal account. Those added up fast enough to get noticed.
Trump is the quintessential Exceptional American, weaponized. The Trump Organization constructed more than 180 skyscrapers
and major properties worldwide within every cesspool of political, military, religious, organized crime, and civil corruption.
Trump is the toughest SOB on the planet - and the most experienced. And he's ours. I stand with Trump.
Democracy is a political philosophy. Socialism is an economic theory. The two are not mutually exclusive. And I have no idea of
who concocted the "famous quote".
When you refer to someone as "Machiavellian" does an engineer understand? In the US there used to be a required college course
entitled "The History of Western Civilization". It formed a common bond somewhat like serving in the military.
"a liberal arts major familiar with works like Alexis de Tocqueville's Democracy in America, John Stuart Mill's On Liberty,
or even the work of ancient Greek historians, might have been able to recognise much sooner the potential for the 'tyranny
of the majority' or other disconcerting sociological phenomena that are embedded into the very nature of today's social media
platforms..."
Such a person would most have likely held their nose and voted for Trump, knowing the appalling damage Hillary had done during
her tenure in the State department.
The usual Graun assumption that it's only ignorance or selfishness that makes people eschew Leftists and their policies.
Sorry. Progressives are actually more ignorant about politics, economics and history, in my experience. I'm not "right-wing"
myself but far more of my right-leaning friends are likely to know who de Tocqueville was and what he wrote than my Lefty friends.
And most of them will know this rather famous quote:
"Democracy extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each
man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality.
But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."
The old "two cultures debate", which in my student days was conducted between FR Leavis and CP Snow, has not advanced very
far. There is certainly something in it, but I suspect that the intellectuals of the sixteenth century, most of whom could be
found in monasteries, complained that Gutenberg would never have pressed ahead so carelessly with printing using moveable type
if he had had a proper grounding in Rhetoric and in Theology, instead of blacksmithing and goldsmithing...
After all... we went from Gutenberg printing in Strasbourg in 1445 to Martin Luther printing his 95 Theses in 1522...
I think we are seeing a similar democratisation of information today.
We can no more put the genie back in the bottle than could Sir Thomas More. If Zuckerberg, Page and Brin had not invented their
money machines, someone else might have done so.
The only political leader who is actively trying to control the genie is Xi Jinping, and he may not be entirely successful
in keeping up the Great Firewall of China.
I think we have to ride the wave, and keep in mind that political power itself is a matter of technology, as I am sure Marshal
McLuhan would point out.
The Great Dictators of the last century were creatures of the radio and the cinema, which allowed them a one sided conversation
with every household and made them bestride the silver screen.
Television replaced radio and cinema and with its more domestic scale it cut the monsters down to size and promoted democracy.
The social media have galvanised authoritarianism at the moment, but the wheels will continue to turn..
New Model: People who disagree with me are stupid.
Oh, and a column in The Guardian defending Mill's On Liberty ? Priceless.
By the way, the entire premise of the column is flawed. Harvard, like all US colleges, has requirements that students take
classes outside their major, including humanities. My
tech prowess allowed
to me find that out. :)
Translation/TL;DR version:
> Trump won despite the amount of shameless fear-mongering and short-selling we in the MSM did for Hillary and Dems.
> Tech companies did not do their part in preventing Trump victory by actively censoring everyone WE disagree with.
> We need OUR (SJW/Humanities/Marxist/LiberalArts) people to MANAGE/WATCHOVER these tech guys.
> Guys like Zucker/Brin/Page are not essentially evil, they are just not educate ENOUGH in SJW/Marxist agenda.
> Guys like Thiel are pure evil.
> WE KNOW BEST, hence, we must be allowed to control and manipulate what people think and how they act.
So what else could explain the astonishing naivety of the tech crowd? My hunch is it has something to do with their educational
backgrounds. Take the Google co-founders. Sergey Brin studied mathematics and computer science. His partner, Larry Page, studied
engineering and computer science. Zuckerberg dropped out of Harvard, where he was studying psychology and computer science,
but seems to have been more interested in the latter.
Science should left in the hands of the political elite, who know what's best for the people.
People need not be good at math to know when a politician is lying. By the humanities, they know a politician is lying because
their lips are moving. lol
Said this before in a reply: Isn't there some responsibility on the part of the Humanities to give a more accurate portrayal of
history and society? For example, shouldn't we all be well aware that the success of these tech giants is built on state-funded
innovation? Shouldn't we all be less blind to how markets work? A stronger left might provide a clearer vision of how power works,
but we have been silencing that hard left for years.
Agree. But how about the fact that many educated people do not know that much of the technology and innovation behind this wealth
was state-funded and not "sexy" Isn't it the job of the liberal arts - history, sociology, government classes to address the role
of the state in innovation? We are blinded by a worshipful attitude toward the market. Without a strong left it seems we have
lost sight of reality. Isn't this partially the fault of Humanities departments?
Normally I don't single out greedy business leaders to take the blame for society's woes. It is the fault of our political leaders
for allowing them to damage society in their chase for the almighty dollar (or billions of them)...Libertarians, conservatives
and centrist Dems to be exact.
But in this case I think the criticism is spot on since these tech nerds keep on claiming their products will make the country
and world a better place. Time to kill the meme that capitalists and business people are bested suited morally to lead the world
in the 21st Century.
"It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted
ideological and political messages to voters." That was supposed to be reserved for exclusive use of the Democratic Party.
One of the changes (still happening) in literature, psychology, sociology, and philosophy departments is a focus on privilege,
"the other", subjugation, the power of elites . . . So studying the humanities may involve a critique - at least a consciousness
- of one's privilege. Not familiar with Snow but there is plenty of lit crit and theory to dismantle or at least challenge the
canon.
I guess the problem being referred to in this article that there are negative implications for all of us because many people's
opinions are shaped by what they read on social media. What all of us read is biased in ways that it is difficult to trace the
source of that bias. In "the good old days" at least most people tended to know the biases of the newspapers and TV news that
you consumed, but now you can be biased by what your friends share with you on social media, or what google choses to show you
in search results but there is no way of knowing the source of those biases. The problem therefore goes far beyond the risks of
sharing personal data.
Yes, I agree and I wasn't disparaging the STEM subjects at all or equating them in some way with capitalist interests. Both can
have that criticism applied to them - for instance, historians can definitely twist facts and more or less propagandise events.
Both are necessary, but I was thinking that both need to have at least a grasp of the influence and range of the other and be
better educated to do that.
Ditto bankers, doctors, lawyers and journalists.... The world (and particularly the US) is full of specialists. The author's assertions
are naive and half-educated.
Nonsense! You were just filling your word count with provocative poo.
Every technology has a good side and a bad one - including and especially the medical arts. Consider the recent news regarding
successful head transplants and face transplants; where will that takes us when humanitarian uses fail to pay the bills???
One book does not make the man. The point is many private and public schools focus on STEM to the detriment of humanities. A "liberal
arts" education is now a selling point in some schools.
Totally understand your point. As a non-tech individual who has been hostile to this massive organization of information and its
consequent requirements to alter human thought and social patterns to use systems, it is certainly expected that designers would
demand compliance from all parties for their own purposes. Even in the SF Chronicle, i often read quips about programmers disguising
coding for their own private use. In SF some loose canon but brilliant guy was asked to redesign the city's computer systems.
He had total mental breakdown and was jailed for some sort of bizarre infraction that had something to do with unauthorized personal
use. I can't quite remember details. The Chron offered to the public that the City may never know what this guy designed into
the systems. Bottom line was the city employees were totally delighted about their new programs and the programmer wouldn't talk.
If i remember correctly he was this eccentric, well liked gay guy.
Horseshit! I read De Toqueville in high school. There are required humanities courses at good universities. And anyone can read
a book on one's own time.
I agree with your overall assessment of the tech owners. However, blaming their academic discipline is short sighted. I suggest
you get to know some math and computer science majors. Many are well versed in the humanities. Not everyone needs a degree in
liberal arts to understand the human race.
Perhaps you are referring to the culture of technology that bred a lack of insight into human behavior.
There are also people with degrees in the liberal arts who go into technological fields. I agree with your views on the naïveté
of the tech leaders, but blaming a college degree strikes me as looking for a parallel that doesn't exist.
The writer clearly does not know much about the US higher education system where engineers and scientists cannot get away
without taking humanities courses, unlike the UK.
I would say that a deep study of the humanities can impart the kind of pessimism about human nature that animated Madison, Jefferson
and the other Framers of the Constitution. Their pessimism, unlike the unrestrained optimism of their counterparts in France,
is what enabled this country to be one of the few to survive a revolution without descending into mass murder and tyranny. But
given their fundamental pessimism, the founders of this country would probably be surprised that the governmental structure they
designed had endured this long.
Many of today's 'tech-elite' are sons of rich, establishment types who only have one interest: making more money. By the time
reports leek this appear, they already have a private island and a few billion in the bank. If you have an issue with tech giants
messing around with your personal data, don't give them your personal data.
I would like to congratulate the vast majority of the people posting here on producing possibly the most thoughtful and considered
set of comments I have read on a Guardian Article.
I will give the Article credit for stimulating the debate but I do think the discussion BTL has been far more interesting than
the original.
Alison I agree, but because the number of arts and sciences students is declining, arts and sciences faculty try to isolate integrated
studies (often called general studies or, at my university, the core curriculum) from professional studies. They do this to try
to save their jobs so it's understandable. The end results are sporadic, half-hearted attempts at integration that don't exactly
foster aha moments. Rather they cultivate thinking such as we see in this article.
The original backers of the "wired" world (such as Stewart Brand and Kevin Kelly who founded Wired, but one could list dozens
of tech legends) were utopian thinkers who were very well versed in history and philosophy. Unfortunately but probably inevitably,
the whole thing was corrupted by corporations as it became part of mainstream consumer society.
"... By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog ..."
"... The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. ..."
"... The pattern of human concerns ..."
"... The pattern of human concerns ..."
"... Journal of Happiness Studies ..."
"... The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states). ..."
"... Psychological Bulletin ..."
"... 1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment". ..."
"... 2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale". ..."
"... in the light of the structure of our society where the job one holds is the prime indicator of status and prestige. ..."
"... Psychological Bulletin ..."
"... Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance". ..."
"... In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point. ..."
"... The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. ..."
"... I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points. ..."
"... This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. ..."
"... When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it. ..."
"... When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. ..."
"... Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work . ..."
Posted on
November 21, 2017 by Yves Smith Yves here. Reader
UserFriendly sent this post with the message, "I can confirm this." I can too. And before you
try to attribute our reactions to being Americans, note that the study very clearly points out
that its finding have been confirmed in "all of the world's regions".
By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment
and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog
Here is a summary of another interesting study I read last week (published March 30, 2017)
– Happiness at Work
– from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the
relationship between happiness and labour force status, including whether an individual is
employed or not and the types of jobs they are doing. The results reinforce a long literature,
which emphatically concludes that people are devastated when they lose their jobs and do not
adapt to unemployment as its duration increases. The unemployed are miserable and remain so
even as they become entrenched in long-term unemployment. Further, they do not seem to sense
(or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming
proportion continually seek work – and relate their social status and life happiness to
gaining a job, rather than living without a job on income support. The overwhelming conclusion
is that "work makes up such an important part of our lives" and that result is robust across
different countries and cultures. Being employed leads to much higher evaluations of the
quality of life relative to being unemployed. And, nothing much has changed in this regard over
the last 80 or so years. These results were well-known in the 1930s, for example. They have a
strong bearing on the debate between income guarantees versus employment guarantees. The UBI
proponents have produced no robust literature to refute these long-held findings.
While the 'Happiness Study' notes that "the relationship between happiness and employment is
a complex and dynamic interaction that runs in both directions" the authors are
unequivocal:
The overwhelming importance of having a job for happiness is evident throughout the
analysis, and holds across all of the world's regions. When considering the world's
population as a whole, people with a job evaluate the quality of their lives much more
favorably than those who are unemployed. The importance of having a job extends far beyond
the salary attached to it, with non-pecuniary aspects of employment such as social status,
social relations, daily structure, and goals all exerting a strong influence on people's
happiness.
And, the inverse:
The importance of employment for people's subjective wellbeing shines a spotlight on the
misery and unhappiness associated with being unemployed.
There is a burgeoning literature on 'happiness', which the authors aim to contribute to.
They define happiness as "subjective well-being", which is "measured along multiple
dimensions":
life evaluation (by way of the Cantril "ladder of life"), positive and negative affect to
measure respondents' experienced positive and negative wellbeing, as well as the more
domain-specific items of job satisfaction and employee engagement. We find that these diverse
measures of subjective wellbeing correlate strongly with each other
Cantril's 'Ladder of Life Scale' (or "Cantril Ladder") is used by polling organisations to
assess well-being. It was developed by social researcher Hadley Cantril (1965) and documented
in his book The pattern of human concerns .
You can learn more about the use of the 'Cantril Ladder' HERE
.
As we read, the "Cantril Self-Anchoring Scale consists of the following":
Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. The
top of the ladder represents the best possible life for you and the bottom of the ladder
represents the worst possible life for you. On which step of the ladder would you say you
personally feel you stand at this time? (ladder-present) On which step do you think you
will stand about five years from now? (ladder-future)
[Reference: Cantril, H. (1965) The pattern of human concerns , New Brunswick,
Rutgers University Press.]
[Reference: Bjørnskov, C. (2010) 'How Comparable are the Gallup World Poll Life
Satisfaction Data?', Journal of Happiness Studies , 11 (1), 41-60.]
The Cantril scale is usually reported as values between 0 and 10.
The authors in the happiness study use poll data from 150 nations which they say "is
representative of 98% of the world's population". This survey data is available on a mostly
annual basis since 2006.
The following graph (Figure 1 from the Study) shows "the self-reported wellbeing of
individuals around the world according to whether or not they are employed."
The "bars measure the subjective wellbeing of individuals of working age" by employment
status .
The results show the differences between having a job and being unemployed are "very large
indeed" on the three well-being measures (life evaluation, positive and negative affective
states).
People employed "evaluate the quality of their lives around 0.6 points higher on average as
compared to the unemployed on a scale from 0 to 10."
The authors also conduct more sophisticated (and searching) statistical analysis
(multivariate regression) which control for a range of characteristics (gender, age, education,
marital status, composition of household) as well as to "account for the many political,
economic, and cultural differences between countries as well as year-to-year variation".
The conclusion they reach is simple:
the unemployed evaluate the overall state of their lives less highly on the Cantril ladder
and experience more negative emotions in their day-to-day lives as well as fewer positive
ones. These are among the most widely accepted and replicated findings in the science of
happiness Here, income is being held constant along with a number of other relevant
covariates, showing that these unemployment effects go well beyond the income loss associated
with losing one's job.
These results are not surprising. The earliest study of this sort of outcome was from the famous study published by Philip
Eisenberg and Paul Lazersfeld in 1938. [Reference: Eisenberg, P. and Lazarsfeld, P. (1938) 'The psychological effects of
unemployment', Psychological Bulletin , 35(6), 358-390.]
They explore four dimensions of unemployment:
I. The Effects of Unemployment on Personality.
II. Socio-Political Attitudes Affected by Unemployment.
III. Differing Attitudes Produced by Unemployment and Related Factors.
IV. The Effects of Unemployment on Children and Youth.
On the first dimension, they conclude that:
1. "unemployment tends to make people more emotionally unstable than they were previous to
unemployment".
2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is
shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in
the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general
loss of "morale".
Devastation, in other words. They were not surprised because they note that:
in the light of the structure of our society where the job one holds is the prime
indicator of status and prestige.
This is a crucial point that UBI advocates often ignore. There is a deeply entrenched
cultural bias towards associating our work status with our general status and prestige and
feelings of these standings. That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in
1938.
It might change over time but that will take a long process of re-education and cultural
shift. Trying to dump a set of new cultural values that only a small minority might currently
hold to onto a society that clearly still values work is only going to create major social
tensions. Eisenberg and Lazarsfeld also considered an earlier 1937 study by Cantril who explored
whether "the unemployed tend to evolve more imaginative schemes than the employed".
[Reference: Cantril, H. (1934) 'The Social Psychology of Everyday Life', Psychological
Bulletin , 31, 297-330.]
The proposition was (is) that once unemployed, do people then explore new options that were
not possible while working, which deliver them with the satisfaction that they lose when they
become jobless. The specific question asked in the research was: "Have there been any changes of interests
and habits among the unemployed?" Related studies found that the "unemployed become so apathetic that they rarely read
anything". Other activities, such as attending movies etc were seen as being motivated by the
need to "kill time" – "a minimal indication of the increased desire for such
attendance".
On the third dimension, Eisenberg and Lazersfeld examine the questions – "Are there
unemployed who don't want to work? Is the relief situation likely to increase this number?",
which are still a central issue today – the bludger being subsidized by income
support.
They concluded that:
the number is few. In spite of hopeless attempts the unemployed continually look for work,
often going back again and again to their last place of work. Other writers reiterate this
point.
So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their
own opinions, have known that the importance of work in our lives goes well beyond the income
we earn. The non-pecuniary effects of not having a job are significant in terms of lost status,
social alienation, abandonment of daily structure etc, and that has not changed much over
history. The happiness paper did explore "how short-lived is the misery associated with being out of
work" in the current cultural settings.
The proposition examined was that:
If the pain is only fleeting and people quickly get used to being unemployed, then we
might see joblessness as less of a key public policy priority in terms of happiness.
They conclude that:
a number of studies have demonstrated that people do not adapt much, if at all, to being
unemployed there is a large initial shock to becoming unemployed, and then as people stay
unemployed over time their levels of life satisfaction remain low . several studies have
shown that even once a person becomes re-employed, the prior experience of unemployment
leaves a mark on his or her happiness.
So there is no sudden or even medium-term realisation that being jobless endows the
individual with a new sense of freedom to become their creative selves, freed from the yoke of
work. To bloom into musicians, artists, or whatever.
The reality is that there is an on-going malaise – a deeply entrenched sense of
failure is overwhelming, which stifles happiness and creativity, even after the individual is
able to return to work.
This negativity, borne heavily by the individual, however, also impacts on society in
general.
The paper recognises that:
A further canonical finding in the literature on unemployment and subjective wellbeing is
that there are so-called "spillover" effects.
High levels of unemployment "increase fear and heighten the sense of job insecurity". Who
will lose their job next type questions?
The researchers found in their data that the higher is the unemployment rate the greater the
anxiety among those who remain employed.
Conclusion
The overwhelming conclusion is that "work makes up such an important part of our lives" and
that result is robust across different countries and cultures.
Being employed leads to much higher evaluations of the quality of life relative to being
unemployed.
The unemployed are miserable and remain so even as they become entrenched in long-term
unemployment. They do not seem to sense (or exploit) a freedom to release some inner sense of
creativity and purpose.
The overwhelming proportion continually seek work – and relate their social status and
life happiness to gaining a job, rather than living without a job on income support.
Modern Monetary Theory (MMT) allows us to understand that it is the government that chooses
the unemployment rate – it is a political choice.
For currency-issuing governments it means their deficits are too low relative to the
spending and saving decisions of the non-government sector.
For Eurozone-type nations, it means that in surrendering their currencies and adopting a
foreign currency, they are unable to guarantee sufficient work in the face of negative shifts
in non-government spending. Again, a political choice.
The Job
Guarantee can be used as a vehicle to not only ensure their are sufficient jobs available
at all times but also to start a process of wiping out the worst jobs in the non-government
sector.
That can be done by using the JG wage to ensure low-paid private employers have to
restructure their workplaces and pay higher wages and achieve higher productivity in order to
attract labour from the Job Guarantee pool.
The Series So Far
This is a further part of a series I am writing as background to my next book with Joan
Muysken analysing the Future of Work . More instalments will come as the research
process unfolds.
The blogs in these series should be considered working notes rather than self-contained
topics. Ultimately, they will be edited into the final manuscript of my next book due in 2018.
The book will likely be published by Edward Elgar (UK).
Perhaps I'm utterly depressed but I haven't had a job job for over 5 years. Plenty of
work, however, more than I can handle and it requires priorisation. But I am deliberately not part of the organized herd. I stay away from big cities –
it's scary how managed the herd is in large groups – and I suppose that unemployment
for a herd animal is rather distressing as it is effectively being kicked out of the
herd.
Anyway my advice, worth what you pay for it but let he who has ears, etc. – is to go
local, very local, grow your own food, be part of a community, manage your own work, and
renounce the energy feast herd dynamics. "Unemployment", like "recession", is a mechanism of
control. Not very practical advice for most, I realize, trapped in the herd as they are in
car payments and mortgages, but perhaps aspirational?
I think what is missing from this article is the term "identity." If you meet new people,
often the conversation starts with what you do for a living. Your identity, in part, is what
you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the
point is this is part of your identity. When you lose your job long term, your identity here
loses one of its main anchor points.
Worse, there is a deliberate stigma attached with being long term unemployed. In that article
you have seen the word bludger being used. In parts of the US I have read of the shame of
'living off the county'. And yes, I have been there, seen that, and got the t-shirt. It's
going to be interesting as mechanization and computers turn large portions of the population
from workers to 'gig' workers. Expect mass demoralization.
yes the lives many of us have lived, no longer exist though we appear not notice, as we
"can" live in many of same "ways" ..rather well known psychologist defined some 40 years ago, best to "drop through
cracks"
Well, you also lose money, maybe you become homeless etc. as you have nowhere else to turn
(if there are kids involved to support it gets even scarier though there are some programs).
Or maybe you become dependent on another person(s) to support you which is of course
degrading as you know you must rely on them to live, whether it's a spouse or lover when you
want to work and bring in money, or mom and dads basement, or the kindest friend ever who
lets you sleep on their couch. I mean these are the things that really matter.
Privileged people whose main worry in unemployment would be losing identity, wow out of
touch much? Who cares about some identity for parties, but the ability to have a stable
decent life (gig work hardly counts) is what is needed.
I normally wouldn't comment like this, but you have brought up some extremely important
points about identity that I would like to address.
Recently I had the most intense mushroom experience of my entire life–so intense
that my identity had been completely stripped and I was left in a formless state, at the
level of seeing my bare, unvarnished animal neural circuitry in operation. Suddenly with a
flash of inspiration I realized that the identity of everyone, all of us, is inextricably
tied up in what we do and what we do for other people.
Following from that, I understood that if we passively rely on others for survival,
whether it be relying on friends, family, or government, then we do not have an identity or
reason for existing. And the inner self, the animal core of who we are, will realise this
lack of identity (even if the concious mind denies it), and will continually generate
feelings of profound depression and intense nihilism that will inevitably destroy us if the
root cause is not addressed.
Before this experience I was somewhat ambivalent about my politics, but immediately after
I knew that the political right was correct on everything important, from attitudes on sex to
economic philosophy. People need a core of cultural stability and hard work to grow and
become actualized. The alternative is rudderless dissatisfaction and envy that leads
nowhere.
On the topic of giving "out of kindnes and goodwill", giving without demanding anything in
return is a form of abuse, as it deprives those who receive our feel-good generosity the
motivation to form a coherent identity. If the parents of a basement-dweller were truly good
people, instead of supporting said dweller they'd drag her out by the ear and make her grow
food in the yard or some such. Likewise, those who have supported you without also giving
concrete demands and expecations in return have been unkind, and for your own good I hope
that you will immediately remove yourself from their support. On the other hand, if you have
been thoughtlessly giving because it warms the cockles of your heart, then stop it now. You
are ruining other people this way, and if your voting habits are informed by this kind of
malevolence I'd encourage you to change those as well.
Anyway the original poster is right about everything. Working and having a purpose in life
is an entirely different animal from making money and being "successful" in the
government-sponsored commercial economy. Society and government deliberately try to conflate
the two for various reasons, primarily graft of labor and genius, but that is only a
deliberate mis-framing that needlessly harms people when the mainstream economic system is in
catastrophic decline, as ours is today. You should try to clear up this misconception within
yourself as a way of getting better.
Well, I hope this message can give you a few different thoughts and help you find your way
out of the existential angst you're caught in. Don't wallow in helplessness. Think of
something useful to do, anything, whether it earns you money or not, and go out and start
doing it. You'll be surprised at how much better you feel about yourself in no time.
The problem is you said – I – had an extreme experience [burning bush], the
truth was reviled to – I – and I alone during this extreme chemically altered
state. Which by the way just happens to conform to a heap of environmental biases I
collected. This is why sound methodology demands peer review. disheveled some people think Mister Toads Wild ride at Disneyland on psychotropics is an
excellent adventure too.
I think your observation about the importance of work to identity is most perceptive. This
post makes too little distinction between work and a job and glosses over the place of work
in defining who we are to ourselves and to others. I recall the scene in the movie "About a
Boy" when the hero meets someone he cares about and she asks him what he does for a
living.
I believe there's another aspect of work -- related to identity -- missing in the analysis
of this post. Work can offer a sense of mission -- of acting as part of an effort toward a
larger goal no individual could achieve alone. However you may regard the value in putting
man on the moon there is no mistaking the sense of mission deeply felt by the engineers and
technicians working on the project. What jobs today can claim service to a mission someone
might value?
Agreed on your points. Wage slavery is nothing to aspire to. Self-determination within a
context of an interdependent community is a much better way to live. We do our thing in the city, however.
Finding that "interdependent community" is the hard part. My experience has been that this
endeavour is almost chance based; Serendipity if you will.
Here Down South, the churches still seem to have a stranglehold on small and mid scale social
organization. One of the big effects of 'churching' is the requirement that the individual
gave up personal critical thinking. Thus, the status quo is reinforced. One big happy 'Holy
Circlejerk.'
This is a crucial point that UBI advocates often ignore. There is a deeply entrenched
cultural bias towards associating our work status with our general status and prestige and
feelings of these standings.
That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study
in 1938.
It might change over time but that will take a long process of re-education and cultural
shift. Trying to dump a set of new cultural values that only a small minority might
currently hold to onto a society that clearly still values work is only going to create
major social tensions.
I would agree about the entenched cultural norms, etc. But not the pessimism and timeline
for change. An individual can communicate a complex idea to millions in seconds, things move
fast these days.
For me, it seems that what we (we being UBI/radical change proponents) are lacking is a
compelling easily accessible story. Not just regarding UBI (as that is but one part of the
trully revolutionary transformations that must occur) but encompassing everything.
We have countless think pieces, bits of academic writing, books, etc that focus on
individual pieces and changes in isolation. But we've largely abandoned the all-encompassing
narrative, which at their heart is precisely what religion offers and why it can be so
seductive, successful, and resilient for so long.
The status quo has this type of story, it's not all that compelling but given the fact
that it is the status quo and has inertia and tradition on its side (along with the news
media, political, entertainment, etc) it doesn't have to be.
We need to abandon the single narrow issue activism that has become so prominent over the
years and get back to engaging with issues as unseparable and intimately interconnected.
Tinkering around the edges will do nothing, a new political religion is what is
required.
Sorry, I disagree vehemently. Deeply held cultural attitudes are very slow to change and
the study found that work being critical to happiness examined a large number of
societies.
Look at feminism. I was a half-generation after the time when women were starting to get a
shot at real jobs. IIRC, the first class that accepted women at Harvard Law School was in the
1950 and at Harvard Business School, 1965. And the number of first attendees was puny. The
1965 class at HBS had 10 8 women out of a graduating class of over 800; my class in 1981 had
only 11% women.
In the 1980s, you saw a shift from the belief that women could do what men could do to
promotion of the idea that women could/should be feminine as well as successful. This looked
like seriously mixed messages, in that IMHO the earlier tendency to de-emphasize gender roles
in the workplace looked like a positive development.
Women make less than 80% of what men do in the US. Even female doctors in the same
specialities make 80% of their male peers.
The Speenhamland in the UK had what amounted to an income guarantee from the 1790s to
1832. Most people didn't want to be on it and preferred to work. Two generations and being on
the support of local governments was still seen as carrying a stigma.
More generally, social animals have strongly ingrained tendencies to resent situations
they see as unfair. Having someone who is capable of working not work elicits resentment from
many, which is why most people don't want to be in that position. You aren't going to change
that.
And people need a sense of purpose. There are tons of cases of rich heirs falling into
drug addiction or alcoholism and despair because they have no sense of purpose in life. Work
provides that, even if it's mundane work to support a family. That is one of the great
dissservices the Democrats have done to the citizenry at large: sneering at ordinary work
when blue-collar men were the anchors of families and able to take pride in that.
Regarding the large number of societies, we often like to think we're more different than
we actually are focusing on a few glaringly obvious differences and generalizing from there.
Even going back a few hundred years when ideas travelled slower we were still (especially the
"west" though the "east" wasn't all that much more different either) quite similar. So I'm
less inclined to see the large number of societies as evidence.
Generally on societal changes and movements: The issue here is that the leadership has not
changed, they may soften some edges here or there (only to resharpen them again when we're
looking elsewhere) but their underlying ideologies are largely unchanged. A good mass of any
population will go along to survive, whether they agree or not (and we find increasing
evidence that many do not agree, though certainly that they do not agree on a single
alternative).
It may be impossible to implement such changes in who controls the levers of power in a
democratic fashion but it also may be immoral not implement such changes. Of course this is
also clearly a similar path to that walked by many a demonized (in most cases rightfully so)
dictator and despot. 'Tread carefully' are wise words to keep in mind.
Today we have a situation which reflects your example re: social animals and resentment of
unfairness: the elite (who falls into this category is of course debatable, some individuals
moreso than others). But they have intelligently, for their benefit, redirected that
resentment towards those that have little. Is there really any logical connection between not
engaging in wage labor (note: NOT equivalent to not working) and unfairness? Or is it a myth
crafted by those who currently benefit the most?
That resentment is also precisely why it is key that a Basic income be universal with no
means testing, everyone gets the same.
I think we should not extrapolate too much from the relatively small segment of the
population falling into the the inherited money category. Correlation is not causation and
all that.
It also seems that so often individuals jump to the hollywood crafted image of the
layabout stoner sitting on the couch giggling at cartoons (or something similarly negative)
when the concept of less wage labor is brought up. A reduction of wage labor does not equate
to lack of work being done, it simply means doing much of that work for different reasons and
rewards and incentives.
As I said in the Links thread today, we produce too much, we consume too much, we grow too
much. More wage labor overall as a requirement for survival is certainly not the solution to
any real problem that we face, its a massively inefficient use of resources and a massive
strain on the ecosystems.
I am really gobsmacked at the sense of entitlement on display here. Why are people
entitled to an income with no work? Being an adult means toil: cleaning up after yourself,
cleaning up after your kids if you have them, if you are subsistence farmer, tending your
crops and livestock, if you are a modern society denizen, paying your bills and your taxes on
time. The idea that people are entitled to a life of leisure is bollocks. Yet you promote
that.
Society means we have obligations to each other. That means work. In rejecting work you
reject society.
And the touting of "creativity" is a top 10% trope that Thomas Frank called out in Listen,
Liberal. It's a way of devaluing what the bottom 90% do.
My argument with the article is that, to me, it smacks of Taylorism. A follow-on study
would analyze how many hours a laborer must work before the acquired sense of purpose and
dignity and associated happiness began to decline. Would it be 30 hours a week of
backbreaking labor before dignity found itself eroded? 40? 50? 60? When does the worker
break? Just how far can we push the mule before it collapses?
The author alludes to this: "The overwhelming proportion relate their social status and
life happiness to gaining a job"
Work equals happiness. Got it.
But, as a former robotics instructor, and as one who watches the industry (and former
students), I see an automated future as damn near inevitable. Massive job displacement is
coming, life as a minimum wage burger flipper will cease, with no future employment prospects
short of government intervention (WPA and CCC for all, I say). I'm not a Luddite, obviously,
but there are going to be a lot of people, billions, worldwide, with no prospect of
employment. Saying, "You're lazy and entitled" is a bit presumptuous, Yves. Not everyone has
your ability, not everyone has my ability. When the burger flipping jobs are gone, where do
they go? When roombas mop the floors, where do the floor moppers go?
We could use a new Civilian Conservation Corps and and a Works Progress Administration.
There's lots of work that needs doing that isn't getting done by private corporations.
The outrage at non-work wealth and income would be more convincing if it were aimed also
at owners of capital. About 30% of national income is passive -- interest, rents, dividends.
Why are the owners of capital "entitled to an income with no work?" It's all about the
morality that underlies the returns to capital while sugaring over a devaluation of labor. As
a moral issue, everyone should share the returns on capital or we should tax away the
interest, rents, and dividends. If it's an economic issue, berating people for their beliefs
isn't a reason.
The overwhelming majority do work. The top 0.1% is almost entirely private equity managers
who are able to classify labor income as capital gains through the carried interest loophole.
Go look at the Forbes 400.
The 1% are mainly CEOs, plus elite professionals, like partners at top law and consulting
firms and specialty surgeons (heart, brain, oncology). The CEOs similarly should be seen as
getting labor income but have a lot of stock incentive pay (that is how they get seriously
rich) which again gets capital gains treatment.
You are mistaking clever taking advantage of the tax code for where the income actually
comes from. Even the kids of rich people are under pressure to act like entrepreneurs from
their families and peers. Look at Paris Hilton and Ivanka as examples. They both could have
sat back and enjoyed their inheritance, but both went and launched businesses. I'm not saying
the kids of the rich succeed, or would have succeed to the extent they do without parental
string-pulling, but the point is very few hand their fortune over to a money manager and go
sailing or play the cello.
What's your take on Rutger Bergman's ted talk? i think most jobs aren't real jobs at all,
like marketing and ceo's. why can't we do 20 hour work weeks so we don't have huge amounts of unemployment? Note, I was "unemployed" for years since "markets" decide not to fund science in the US.
Yay Germany At least I was fortunate enough to not be forced to work at Walmart or McDonalds
like the majority of people with absolutely no life choices. Ah the sweet coercion of
capitalism.
Your hopes for a UBI are undone by some of the real world observations I've made over many
years, with regard to how a guaranteed income increase, of any measure, for a whole
population of an area, affects prices. Shorter: income going up means prices are raised by
merchants to capture the new income.
Examples: A single industry town raises wages for all employees by 2% for the new calendar
year. Within the first 2 weeks of the new year, all stores and restaurants and service
providers in the town raise their prices by 2%. This happens every year there is a general
wage increase.
Example: Medicare part D passes and within 2 years, Pharma now having new captive
customers whose insurance will pay for drugs, raise prices higher and higher, even on generic
drugs.
A more recent example: ACA passes with no drug price ceilings. Again, as with the passage
of Medicare part D, Pharma raises drug prices to unheard of levels, even older and cheap but
life saving drugs, in the knowledge that a new, large group will have insurance that will pay
for the drugs – a new source of money.
Your assumption that any UBI would not be instantly captured by raised prices is naive, at
best. It's also naive to assume companies would continue to pay wages at the same level to
people still employed, instead of reducing wages and letting UBI fill in the rest. Some
corporations already underpay their workers, then encourage the workers to apply for food
stamps and other public supports to make up for the reduced wage.
The point of the paper is the importance of paid employment to a person's sense of well
being. I agree with the paper.
For the vast majority, a UBI would be income-neutral – it would have to be, to avoid
massive inflation. So people would receive a UBI, but pay more tax to compensate. The effect
on prices would be zero.
The advantage of a UBI is mostly felt at the lower end, where insecure/seasonal work does
now pay. At the moment, a person who went from farm labourer to Christmas work to summer
resort work in the UK would certainly be working hard, but also relentlessly hounded by the
DWP over universal credit. A UBI would make this sort of lifestyle possible.
Davidab,
Good for you, but your perspicacity is not scalable. People are social animals and your attitude toward "the herd", at least as expressed here,
is that of a predator, even if your taste doesn't run toward predation. Social solutions will necessarily be scalable or they won't be solutions for long.
> the organized herd a herd animal trapped in the herd
I don't think throwing 80% to 90% of the population into the "prey" bucket is especially
perspicacious politically (except, of course, for predators or parasites). I also don't think it's especially perspicacious morally. You write:
Not very practical advice for most, I realize, trapped in the herd as they are in car
payments and mortgages, but perhaps aspirational?
Let me translate that: "Trapped in the herd as many are to support spouses and children."
In other words, taking the cares of the world on themselves in order to care for others.
Unemployed stay at home dad here. My children are now old enough to no longer need a stay
at home dad. Things I have done: picked up two musical instruments and last year dug a
natural swimming pond by hand. Further, one would need to refute all the increased happiness
in retirement (NBER). Why social security but not UBI? I get being part of the precariat is
painful and this is a reality for most the unemployed no matter where you live in the world.
A UBI is unworkable because it will never be large enough to make people's lives
unprecarious. Having said that, I am almost positive if you gave every unemployed person 24 k
a year and health benefits, there would be a mass of non working happy creative folks.
UBI seems to me to encourage non-virtuous behavior – sloth, irresponsibility,
fecklessness, and spendthriftness. I like the Finnish model – unemployment insurance is
not limited – except if you refuse work provided by the local job center. Lots of work
is not being done all over America – we could guarantee honest work to all with some
imagination. Start with not spraying roundup and rather using human labor to control weeds
and invasive species.
I do agree that universal health insurance is necessary and sadly Obamacare is not
that.
The crux of this problem is the definition used for "non-virtuous behaviour."
A new CCC is a good place to start though. (Your Tax Dollars At Work! [For some definition of
tax dollars.])
As for BJ above, I would suppose that child rearing was his "employment" for years. good so
far, but his follow-up is untypical. The 'Empty Nester' mother is a well known meme.
Spendthriftness on 24K a year? Seriously? If we are disgorging unprofessional opinions, I will add my own: sloth and
irresponsibility are more signs of depression rather than freedom from having to work. In
fact, I believe (and I think much of the stuff here) supports the idea that people want to be
seen as useful in some way. Doesn't include me! :) .. unfortunately, I have the charmingly named "dependents" so there
you have it.
I lived 6 years as a grad student on 24k a year and would say it was easy. Only thing I
would have to had worried about was awful health insurance. A two household each with 24k
would be even easier, especially if you could do it in a low cost area. So I am not sure what
you mean by spendthrift. But again it will never happen, so we will be stuck with what we
have or most likely an even more sinister system. I guess I am advocating for a JG with
unlimited number of home makers per household.
except if you refuse work provided by the local job center
And who's to say that the local "job center" has work that would be appropriate for every
person's specific talents and interests? This is no better than saying that you should be
willing to go work for some minimum-wage retail job with unpredictable scheduling and other
forms of employer abuses after you lose a high-paying job requiring special talents. I have
to call bullshit on this model. I went through a two-year stretch if unemployment in no small
part because the vast majority of the available jobs for my skill set were associated with
the MIC, surveillance state or the parasitic FIRE sector. I was able to do this because I had
saved up enough FY money and had no debts or family to support.
I can also attest to the negative aspects of unemployment that the post describes. Its all
true and I can't really say that I'e recovered even now, 2.5 years after finding another
suitable job.
The job center in the neighbouring Sweden had the same function. Had is the important
word. My guess is that the last time someone lost their unemployment insurance payout due to
not accepting a job was in the early 1980s. Prior to that companies might, maybe, possibly
have considered hiring someone assigned to them – full employment forced companies to
accept what was offered. Companies did not like the situation and the situation has since
changed.
Now, when full employment is a thing of the past, the way to lose unemployment insurance
payouts is by not applying to enough jobs. An easily gamed system by people not wanting to
work: just apply to completely unsuitable positions and the number of applications will be
high. Many companies are therefore overwhelmed by applications and are therefore often forced
to hire more people in HR to filter out the unsuitable candidates.
People in HR tend not to know much about qualifications and or personalities for the job so
they tend to filter out too many. We're all familiar with the skills-shortage .
Next step of this is that the companies who do want to hire have to use recruitment agencies.
Basically outsourcing the HR to another company whose people are working on commission.
Recruiters sometimes know how to find 'talent', often they are the same kind of people with
the same skills and backgrounds as people working in HR.
To even get to the hiring manager a candidate has to go through two almost identical and
often meaningless interviews. Recruiter and then HR. Good for the GDP I suppose, not sure if
it is good for anything else.
But back on topic again, there is a second way of losing unemployment insurance payout:
Time. Once the period covered has passed there is no more payouts of insurance. After that it
it is time to live on savings, then sell all assets, and then once that is done finally go to
the welfare office and prove that savings are gone and all assets are sold and maybe welfare
might be paid out. People on welfare in Sweden are poor and the indignities they are being
put through are many. Forget about hobbies and forget about volunteering as the money for
either of those activities simply aren't available. Am I surprised by a report saying
unemployed in Sweden are unhappy? Nope.
meanwhile NYTimes testimonials Friday, show average family of 4 healthprofit costs
(tripled, due to trump demise ACA) to be $30,000. per year, with around $10,000. deductible
end of any semblance of affordable access, "murKa"
Where does a character like Bertie Wooster in "Jeeves" fit in your notions of virtuous
behavior? Would you consider him more virtuous working in the management of a firm,
controlling the lives and labor of others -- and humorously helped by his his brilliant
valet, Jeeves, getting him out of trouble?
For contrast -- in class and social status -- take a beer-soaked trailer trash gentleman
of leisure -- and for sake of argument blessed with less than average intelligence -- where
would you put him to work where you'd feel pleased with his product or his service? Would you
feel better about this fellow enjoying a six-pack after working 8 hours a day 5 days a week
virtuously digging and then filling a hole in the ground while carefully watched and goaded
by an overseer? [Actually -- how different is that from "using human labor to control weeds
and invasive species"? I take it you're a fan of chain-gangs and making the poor pick up
trash on the highways?]
What about some of our engineers and scientists virtuously serving the MIC? Is their
behavior virtuous because they're not guilty of sloth, irresponsibility [in executing their
work], fecklessness, and spendthriftness? On this last quality how do you feel about our
government who pay the salaries for all these jobs building better ways to kill and maim?
It is a design by David Pagan Butler. It is his plunge pool design, deepend is 14 by 8 by
7 deep. I used the dirt to make swales around some trees. Win win all around.
The answer is yes my spouse works. So I do have a schedule of waking up to make her lunch
everyday, meeting her at lunch to walk, and making dinner when she gets home, but we do all
those things on her days off so .
But again we would need to explain away, why people who are retired are happier? Just
because they think they payed into social security? Try explaining to someone on the SS dole
how the government spends money into existence and is not paid by taxes or that the
government never saved their tax money, so there are not entitled to this money.
I hated working for other people and doing what they wanted. I began to feel some
happiness when I had a half acre on which I could create my own projects. Things improved
even more when I could assure myself of some small guaranteed income by claiming Social
Security at age 62. To arise in the morning when I feel rested, with interesting projects
like gardens, fences, small buildings ahead and work at my own pace is the essence of delight
for me. I've been following your arguments against UBI for years and disagree vehemently.
I feel I would behave the same as you, if I had the chance. *But* no statements about
human beings are absolute, and because UBI would work for either of us does not mean it would
work for the majority. Nothing devised by man is perfect.
first you had to buy the half acre in a suitable location, then you had to work many years
to qualify for social security, the availability of which you paid for and feel you deserve.
You also have to buy stuff for fences gardens and small buildings. At most that rhymes with a
ubi but is significantly different in it's make up.
> when I had a half acre on which I could create my own projects
That is, when you acquired the half acre, which not everyone can do. It seems to
me there's a good deal of projecting going on with this thread from people who are, in
essence, statistical outliers. But Mitchell summarizes the literature:
So for decades, researchers in this area, as opposed to bloggers who wax lyrical on
their own opinions, have known that the importance of work in our lives goes well beyond
the income we earn.
If the solution that works for you is going to scale, that implies that millions more will
have to own land. If UBI depends on that, how does that happen? (Of course, in a
post-collapse scenario, the land might be taken , but that same scenario makes the
existence of institutions required to convey the UBI highly unlikely. )
Very glad to hear that Bill Mitchell is working on the "Future of Work" book, and to have
this post, and the links to the other segments. Thank you, Yves!
I don't agree with this statement. Never will. I'm the complete opposite. Give me more
leisure time and you'll find me painting, writing, playing instruments and doing things that
I enjoy. I recall back to when I was a student, I relished in the free time I got (believe me
University gave me a lot of free time) between lectures, meaning I could enjoy this time
pursuing creative activities. Sure I might be different than most people but I know countless
people who are the same.
My own opinion is that root problem lies in the pathology of the working mentality, that
'work' and having a 'job' is so engrained into our society and mindset that once you give
most people the time to enjoy other things, they simply can't. They don't know what to do
with themselves and they eventually become unhappy, watching daytime TV sat on the sofa.
I recall back to a conversation with my mother about my father, she said to me, 'I don't
know how your father is going to cope once he retires and has nothing to do' and it's that
very example of where work for so many people becomes so engrained in their mindset, that
they are almost scared of having 'nothing to do' as they say. It's a shame, it's this
systemic working mentality that has led to this mindset. I'm glad I'm the opposite of this
and proud by mother brought me up to be this way. Work, and job are not in my vocabulary. I
work to live, not live to work.
I agree with Andrew. I think this data on the negative effects says more about how being
employed fundamentally breaks the human psyche and turns them into chattel, incapable of
thinking for themselves and destroying their natural creativity. The more a human is molded
into a "good worker" the less they become a full fledged human being. The happiest people are
those that have never placed importance on work, that have always lived by the maxim "work to
live, not live to work". From my own experience every assertion in this article is the
opposite of reality. It is working that makes me apathethic, uncreative, and miserable. The
constant knowing that you're wasting your life, day after day, engaged in an activity merely
to build revenue streams for the rich, instead of doing things that help society or that
please you on a personal level, is what I find misery inducing.
I agree. If financial insecurity is removed from the equation -- free time can be used creatively
for self-actualization, whatever form that may take: cultivating the arts, hobbies, community
activities, worthy causes and projects. The ideology wafting from Mitchell's post smells to me like a rationale for wage slavery
(market driven living, neo-liberalism, etc.)
Besides how are people supposed to spend their time "exploring other opportunities" when
unemployed anyway? To collect unemployment which isn't exactly paying that much anyway, they
have to show they are applying to jobs. To go to the movies the example given costs money,
which one may tend to be short on when unemployed. They probably are looking for work
regardless (for the income). There may still be some free time. But they could go back to
school? Uh in case one just woke up from a rock they were under for 100 years, that costs
money, which one may tend to be short on when unemployed, plus there is no guarantee the new
career will pan out either, no guarantee someone is just chomping at the bit to hire a newly
trained 50 year old or something. I have always taken classes when unemployed, and paid for
it and it's not cheap.
Yes to use one's time wisely in unemployment in the existing system requires a kind of
deep psychological maturity that few have, a kind of Surrender To Fate, to the uncertainty of
whether one will have an income again or not (either that or a sugar daddy or a trust fund).
Because it's not easy to deal with that uncertainty. And uncertainty is the name of the game
in unemployment, that and not having an income may be the pain in it's entirety.
Sadly this breaking down into a "good worker" begins for most shortly after they begin
school. This type of education harms society in a myriad of ways including instilling a
dislike of learning, deference to authority (no matter how irrational and unjust), and a
destruction of a child's natural curiosity.
I don't buy your premise that people are "creative". The overwhelming majority do not have
creative projects they'd be pursuing if they had leisure and income. Go look at retirees,
ones that have just retired, are healthy, and have money.
You are really misconstruing what the studies have found and misapplied it to your
situation. Leisure time when you have a job or a role (being a student) is not at all the
same as having time when you are unemployed, with or without a social safety net.
Work: that can be me hiring someone to cut my yard, or another type of one-off thing
filled with precariousness.
Job: that less temporary work, but by no means permanent. Just a step up from the
precariousness of work.
Career: that is work in the same field over a long period of time and it is more likely
that someone will develop an identity through performing the work. Still precarious, but
maybe more fulfilling.
Sense of purpose: I was always under the impression that is something you have to give
yourself. If it can be taken away by someone what was the purpose?
one often has a role when unemployed: finding work. But it's not a very fulfilling one!
But if one is trying to find work, it's not exactly the absence of a role either even if it
still leaves significantly more free time than otherwise, maybe winning the lottery is the
absence of a role.
But then it's also not like we give people a UBI even for a few years (at any time in
adult life) to get an education. Only if they take out a student loan approaching the size of
a mortgage or have parents willing to pony up are they allowed that (to pay not just for the
education but to live because having a roof over one's head etc. is never free, a UBI via
debt it might be called).
> Give me more leisure time and you'll find me painting, writing, playing instruments
and doing things that I enjoy.
Nothing to breed resentment of "the creative class" here! Blowback from Speenhamland
brought on the workhouses, so be careful what you wish for.
UBI won't happen and JG has been tried (and failed).
The argument that JG would allow the public sector to hire more people is demeaning to
people already employed in the public sector and demonstrably false – people are hired
into the public sector without there being a JG. It is most certainly possible to be against
a JG while wanting more people working in the public sector.
The way forward is to have a government acting for people instead of for corporations.
Increase the amount of paid vacations, reduce the pension age and stop with the Soviet style
worship of work: While some people are apparently proud of their friends and relatives who
died while at work it is also possible to feel sad about that.
The JG was tried in Communist countries in Europe, Asia and Americas. The arguments then
and there were the same as here and now, made by the same type of social 'scientists'
(economists).
Would a JG be different here and now as the Republicans and Democrats are representing the
best interests of the people? Or are they representing the same kind of interests as the
Communist parties did?
Data, please. The USSR fell because it was spending on its military to keep up with the
US, a much larger economy. Countering your assertion we have this:
As long as people argue that "it's not fair" to fix the inequality issue and employ things
like debt jubilee or student loan forgiveness, or if we fix the ridiculous cost of health
care what will all those insurance agents do then we will wind up with the real kind of class
warfare, rather than the current punching from the top down, the punching will come from the
bottom, because the situation is not fair now, it's just TINA according to those who profit
from it. In my own life there is a balance of creativity and work, and I find work enables my
creativity by putting some pressure on my time, i.e., I get up earlier, I practice at 8:30 am
instead of sleeping til 10 and winding up with S.A..D., I go to bed rather than watch tv or
drink to excess.. in other words i have some kind of weird schedule, I have days off sort of
When I've been unemployed I feel the way s described in the article. I find the arguments in
favor of ubi tend to come from people who already have assets, or jobs, or family who they
take care of which is actually a job although uncommonly described as such. The only truth I
see in real life is that the unemployed I am intimately familiar with first are mentally
oppressed by the notion that to repair their situation will require they work every waking
hour at substandard wages for the rest of their life and that is a major barrier to getting
started, and that is a policy choice the gov't and elite classes purposefully made which
created the precariat and will be their undoing if they are unable to see this.
Interesting point. I read a science fiction story in which the protagonist arrives for
work at his full time job at 10:00 AM, and he's finished for the day at 4:00 PM. I can't
remember the name of the story or novel, unfortunately.
Agreed. And they already have it in places like Denmark. Why don't we talk about that? It
actually exists unlike utopian schemes for either total UBI or total work guarantee
(government job creation is not utopian, but imagining it will employ everyone is, and I
would like the UBI to be more widely tried, but in this country we are nowhere close). Funny
how utopia becomes more interesting to people than actual existing arrangements, even though
of course those could be improved on too.
The Danish work arrangement is less than a 40 hour week, and mothers especially often work
part-time but both sexes can. It's here in this country where work is either impossibly
grueling or you are not working. No other choice. In countries with more flexible work
arrangements more women actually work, but it's flexible and flexible for men who choose to
do the parenting as well. I'm not saying this should be for parents only of course.
My own situation is that I am unhappy in my well-paying job and would like nothing more
than to devote myself to other interests. I'm thirty years on in a relationship with someone
who grew up in bad financial circumstances and panics whenever I talk about leaving my job. I
tell her that we have 2 years of living expenses in the bank but I can't guarantee making the
same amount of money if I do leave my job. She has a job that she loves and is important and
pays barely 1/2 of my own income. So she worries about her future with me. She worries about
losing her home. I suppose that makes me the definition of a wage slave. And it makes for an
increasingly unhappy marriage. I admire those who have faced similar circumstances and found
a way through this. Sorry to vent, but this topic and the comments hit a nerve with me and
I'm still trying to figure this out.
Otis;
We are presently going through a period where that "two year cushion" has evaporated, for
various reasons. We are seeing our way through this, straight into penury and privation.
Take nothing for granted in todays' economy.
yes find the lower paying job that you like more first. If you just quit for nothing in
the hopes of finding one it might not happen. Of course unemployment also happens sometimes,
whether we want it or not.
The newer generations are worse when it comes to lifestyle. Those of that are older can at
least remember a time without cellphones internet streaming services leasing a new car every
2 years etc.
What about the young? My niece and her husband should be all set , his mom sunk money into
a home on the condition she moved into a mother in law apartment. So far so good right? 2
years in they are imploding even with the free child care she provides. Combined their
wireless bill a month is over $300. The sit on the couch side by side and stream netflix
shows to dueling iphones in front of a 65 inch tv that is not even turned on. Wearing
headphones in silence.
Both driving new vehicles , both have gym memberships they don't use . They buy lattes 3
or 4 times a day which is probably another 500 a month.
My uncle passed away recently and my niece asked if she was in the will. It was literally
her only communication on the subject. They are going under and could easily trim a few
thousand a month from the budget but simply won't. No one in the family is going to lift a
finger for them at this point they burned every possible bridge already. I have seen people
living in cars plenty lately but I think these will be the first I see to living in brand new
cars .
Somewhere along the line they got the impression that the american dream was a leased car
a starbucks in one hand and an iphone in the other .
Confront them with the concept of living within a paycheck and they react like a patient
hearing he has 3 months to live.
Yeah being poor, never mind growing up poor, just well and truly sucks and it can really
@@@@ you up. Gives people all sorts of issues. I'm rather like her, but I have had the joy of
multi-hour commutes to unexciting soul crushing work. Happy, happy, joy, joy! However don't
forget that with the current political economy things are likely to go bad in all sorts of
ways. This whole site is devoted to that. My suggestion is to keep the job unless you have
something lined up. Not being able to rent has it own stresses too. Take my word for it.
I may be engaging in semantics but I think conflating work and jobs makes this article a
bit of a mixed bag. I know plenty of people who are terribly unhappy in their jobs, but
nonetheless extract a sense of wellbeing from having a stable source of INCOME to pay their
bills (anecdotally speaking, acute stress from recent job losses is closely linked to
uncertainty about how bills are going to be paid, that's why those with a safety net of
accumulated savings report less stress than those without). Loss of status, social standing
and identity and the chronic stress borne from these become evident much later I.e. when the
unemployment is prolonged, accompanied of course by the still unresolved top-of-mind concern
of "how to pay the bills".
As such, acute stress for the recently unemployed is driven by financial/income
uncertainty (I.e. how am I going to pay the bills) whereas chronic stress from prolonged
unemployment brings into play the more identity driven aspects like loss of social standing
and status. For policy interventions to have any effects, policy makers would have to
delineate the primary drivers of stress (or lack of wellbeing as the author calls it) during
the various phases of the unemployment lifecycle. An Unemployment Insurance Fund (UIF) like
we have here in South Africa appears to address the early stages of unemployment, and the
accompanying acute stress, quite well by providing the income guarantee (for six months) that
cushions the shock of losing a job. What's still missing of course are interventions that
promote the quick return to employment for those on UIF, so maybe a middle of the road
solution between UBI and a jobs guarantee scheme is how policy makers should be framing this,
instead of the binary either/or we currently have.
Lots' of people think they're unhappy with their jobs. Let them sit unemployed for 9
months and ask them if they want that job back. The usual parade of anecdata is on display here in the comments. Mitchell's real data and
analysis in the article above still stand.
If you'd read through my comment, and not rushed through it with a view of dishing out a
flippant response, you'd have seen that nowhere do I question the validity of his data, I
merely question how the argument is presented in some areas (NC discourages unquestioning
deference to the views of experts no??). By the way, anecdotes do add to richer understanding
of a nuanced and layered topic (as this one is) so your dismissal of them in your haste to
invalidate people's observations is hardly helpful.
Yes people many not like their jobs but prefer the security of having them to not. Yes
even if the boss sexually harasses one (as we are seeing is very common). Yes even if there
is other workplace abuse. Yes even when it causes depression or PTSD (but if one stays with
such a job long term it ruins the self confidence that is one prerequisite to get another
job!). Yes even if one is in therapy because of job stress, sexual harassment or you name it.
The job allows the having health insurance, allows the therapy, allows the complaining about
the job in therapy to make it through another week.
When unemployed, the stress of worry about money may suppress the creative juices.
Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with
steady income. The great experience of some freelancers notwithstanding, not all are cut out
for it.
I would love to see some more about happiness or its lack in retirement–referenced
by stay-at-home dad BJ , above.
I wonder, too, about the impact of *how* one loses one's job. Getting laid off vs fired vs
quitting vs involuntary retirement vs voluntary, etc feel very different. Speaking from
experience on that, too. I will search on these points and post anything of interest.
There are also other things that are degrading about the very process of being unemployed
not mentioned here. What about the constant rejection that it can entail? One is unemployed
and looking for work, one sends out resumes, many of them will never be answered, that's
rejection. Then if one is lucky they get interviews, many will never lead to jobs, yet more
rejection. Does the process of constant rejection itself have a negative effect on a human
being whether it's looking for jobs or dates or whatever? Isn't it learned helplessness to if
one keeps trying for something and keeps failing. Isn't that itself demoralizing entirely
independent of any doubtful innate demoralizing quality of leisure.
I am not so sure if I agree with this article. I think it really depends on whether or not
you have income to support yourself, hate or love your job, and the amount of outside
interests you have, among other things. Almost everyone I know who lives in the NYC area and
commutes into the city .doesn't like their job and finds the whole situation "soul-crushing".
Those that live in Manhattan proper are (feel) a bit better off. I for one stopped working
somewhat voluntarily last year. I write somewhat because I began to dislike my job so much
that it was interfering with my state of well being, however, if I had been allowed to work
remotely I probably would have stuck it out for another couple of years.
I am close enough to
62 that I can make do before SS kicks in although I have completely changed my lifestyle
– i.e. I've given up a materialistic lifestyle and live very frugally.
Additionally I
saved for many years once I decided to embark on this path. I do not find myself depressed at
all and the path this year has been very enriching and exciting (and scary) as I reflect on
what I want for the future. I'm pretty sure I will end up moving and buying a property so
that I can become as self sufficient as possible. Also, I probably will get a job down the
line – but if I can't get one because I am deemed too old that will be ok as well. The
biggest unknown for me is how much health insurance will cost in the future .
The article made clear that the studies included "unemployed but with income" from
government support. It is amazing the degree to which readers ignore that and want to make
the findings about "unemployed with no income".
That's because we Americans all have work=good=worthy=blessed by God while
workless=scum=worthless=accursed by God engraved into our collective soul. Our politics, our
beliefs, are just overlays to that.
Even when we agree that the whole situation just crushes people into paste, and for which
they have no defense regardless of how hard they work, how carefully they plan, or what they
do, that underlay makes use feel that this is their/our fault. Any suggestions that at least
some support can be decoupled from work, and that maybe work, and how much you earn, should
not determine their value, brings the atavistic fear of being the "undeserving poor,"
parasites and therefore reprobated scum.
So we don't hear what you are saying without extra effort because it's bypassing our
conscious thoughts.
Add my voice to those above who feel that forced labor is the bane of existence, not the
wellspring. All this study says to me is that refusing to employ someone in capitalist
society does not make them happy. It makes them outcasts.
So, I say yes to a JG, because anyone who wants work should be offered work. But at the
same time, a proper JG is not forced labor. And the only way to ensure that it is not forced
labor, is to decouple basic needs from wage slavery.
I am critical of those who distinguish between the job and the income. Of course the
income is critical to the dignity of the job. For many jobs, it is the primary source of that
dignity. The notion that all jobs should provide some intrinsic dignity unrelated to the
income, or that people whose dignity is primarily based on the income they earn rather than
the work they do are deluded, is to buy in to the propaganda of "passion" being a requirement
for your work and to really be blind to what is required to make a society function. Someone
has to change the diapers, and wipe the butts of old people. (yes, I've done both.) It
doesn't require passion and any sense of satisfaction is gone by about the second day. But if
you could make a middle class living doing it, there would be a lot fewer unhappy people in
the world.
It is well known that auto factory jobs were not perceived as good jobs until the UAW was
able to make them middle class jobs. The nature of the actual work itself hasn't changed all
that much over the years – mostly it is still very repetitive work that requires little
specialized training, even if the machine technology is much improved. Indeed, I would guess
that more intrinsic satisfaction came from bashing metal than pushing buttons on a CNC
machine, and so the jobs may even be less self-actualizing than they used to be.
The capitalist myth is that the private sector economy generates all the wealth and the
public sector is a claim on that wealth. Yet human development proves to us that this is not
true – a substantial portion of "human capital" is developed outside the paid economy,
government investment in R&D generates productivity growth, etc. And MMT demonstrates
that we do not require private sector savings to fund public investment.
We are still a ways from having the math to demonstrate that government investment in
caring and nurturing is always socially productive – first we need productivity numbers
that reflect more than just private sector "product." But I think we are moving in that
direction. Rather than prioritize a minimum wage JG of make-work, we should first simply pay
people good wages to raise their own children or look after their elderly and disabled
relatives. The MMT JG, as I understand it, would still require people to leave their kids
with others to look after them in order to perform some minimum wage task. That is just
dumb.
Maybe it's dumb, it's certainly dumb in a system like the U.S. where work is brutal and
often low paid and paid childcare is not well remunerated either. But caretakers also working
seems to work in countries with greater income equality, good job protections, flexible work
arrangements, and a decent amount of paid parental leave – yea Denmark, they think
their children should be raised by professionals, but also work-life balance is still pretty
good.
My take is that capitalism has made the benefits and malus of having a job so ingrained
into culture and so reinforced. Having a job is so closely linked to happiness because it
gives you the money needed to pursue it.
A job affords you the ability to pursue whatever goals you want within a capitalist
framework. "Everything" costs money and so having a job gives you the money to pay for those
costs and go on to fulfill your pursuit of happiness.
Analyzing whether people are happy or not under these conditions seem apparent that it is
going to lead to results heavily biased towards finding happiness through employment.
The unemployed are often living off someone else's income and feel like an undeserving
parasite. Adults are generally ingrained with the culture that they have to grow up and be
independent and be able to provide for a new family that they will start up. Becoming
unemployed is like being emasculated and infantile, the opposite of what is expected of
adults.
There's also that not having a job is increasingly being punished especially in the case
of America. American wages have stayed either largely static or have worsened, making being
unemployed that much more of a burden on family or friends. Unemployment has been demonized
by Reaganism and has become systematically punishable for the long term unemployed. If you
are unemployed for too long, you start losing government support. This compounds the frantic
rush to get out of unemployment once unemployed.
There is little luxury to enjoy while unemployed. Life while unemployed is a frustrating
and often disappointing hell of constant job applications and having many of them lead to
nothing. The people providing support often start to become less so over time and become more
convinced of laziness or some kind of lack of character or willpower or education or ability
or whatever. Any sense of systemic failure is transplanted into a sense of personal failure,
especially under neoliberalism.
I am not so sure about the case of Europe and otherwise. I am sure that the third world
often has little or no social safety nets so having work (in exploitative conditions in many
cases) is a must for survival.
Anyways, I wonder about the exact methodologies of these studies and I think they often
take the current feelings about unemployment and then attempt to extrapolate talking points
for UBI/JG from them. Yes, UBI wouldn't change culture overnight and it would take a very,
very long time for people to let down their guard and adjust if UBI is to be implemented in a
manner that would warrant trust. This article seems to understand the potential for that, but
decides against it being a significant factor due to the studies emphasizing the malus of
unemployment.
I wonder how different the results would be if there were studies that asked people how
they would feel if they were unemployed under a UBI system versus the current system. I know
a good number of young people (mostly under 30) who would love to drop out and just play
video games all day. Though the significance of such a drastic demographic shift would
probably lead to great political consequences. It would probably prove the anti-UBI crowd
right in that under a capitalist framework, the capitalists and the employed wouldn't
tolerate the unemployed and would seek to turn them into an underclass.
Personally I think a combination of UBI and JG should be pursued. JG would work better
within the current capitalist framework. I don't think it is without its pitfalls due to
similar possible issues (with the similar policy of full employment) either under
Keynesianism (e.g. Milton Friedman sees it as inefficient) or in the USSR (e.g. bullshit
jobs). There is the possibility of UBI having benefits (not having the unemployed be a burden
but a subsidized contributer to the economy) so I personally don't think it should be fully
disregarded until it is understood better. I would like it if there were better scientific
studies to expand upon the implications of UBI and better measure if it would work or not.
The upcoming studies testing an actual UBI system should help to end the debates once and for
all.
My $0.02:
I have a creative pursuit (no money) and a engineering/physical science technical career
(income!). I am proficient in and passionate about both. Over the last few years, the
technical career became tenuous due to consolidation of regional consulting firms (endemic to
this era)- wages flat to declining, higher work stress, less time off, conversation to
contact employment, etc.- which has resulted in two layoffs.
During the time of tenuous employment, my art took on a darker tone. During unemployment the
art stopped altogether.
I'm recently re-employed in a field that I'm not proficient. Both the peter principle and
imposter syndrome apply. My art has resumed, but the topics are singular about despair and
work, to the point that I feel like I'm constantly reworking the same one piece over and over
again. And the quality has plummeted too.
In some fields (e.g. engineering), being a wage slave is the only realistic option due to
the dominance of a small number of large firms. The big players crowd out independents and
free lancers, while pressuring their own employees through just-high-enough wages and
limiting time off. Engineering services is a relationship- based field, and the big boys (and
they are nearly all boys) have vastly bigger networks to draw work from than a small firm
unless that small firm has a big contact to feed them work (until they get gobbled up). The
big firms also have more areas of expertise which limits how useful a boutique firm is to a
client pool, except under very narrow circumstances. And if you are an introvert like most
engineering people, there's no way to compete with big firms and their marketing staff to
expand a network enough to compete.
In that way, consulting is a lot like art. To make a living at it you need either contacts or
a sponsor. Or an inheritance.
I would be interested to know what the definition of unemployment was for the purpose of
this study (I couldn't find it in the supplied links). If it's simply "people who don't have
a job," for example, then it would include the likes of the idle rich, retirees, wards of the
state, and so on. Binary statements like this one do make it sound like the broad definition
is the one in use:
When considering the world's population as a whole, people with a job evaluate the
quality of their lives much more favorably than those who are unemployed.
The conclusion seems at odds with results I've seen for some of those groups – for
example, I thought it was fairly well accepted that retirees who are supported by a
government plan that is sufficient for them to live on were generally at least as happy as
they had been during their working life.
If, on the other hand, the study uses a narrow definition (e.g. people who are of working
age, want a job or need one to support themselves financially, but can't find one) then the
conclusion seems a lot more reasonable. But that's a heavily loaded definition in economic
and cultural terms. In that case, the conclusion (people are happier if they have a job) only
holds true in the current prevailing model of society. It doesn't rule out the possibility of
structuring society or the economy differently in such a way that people can be non-working
and happy. The existence of one such population already (retirees) strongly suggests that
outcomes like this are possible. A UBI would be an example of just such a restructuring of
society, and therefore I don't think that this study and its result are necessarily a valid
argument against it.
Which makes a person happier -- being considered worthless by one's society or valuable?
How many studies do we need to answer that question? Apparently, a lot, because studies like
this one keep on going. The underlying assumption is that jobs make one valuable. So if you
don't have a job you're worthless. Now, who's happier on the whole, people with jobs or the
unemployed? That's surely good for a few more studies. Did you know that members of socially
devalued groups (minorities, non-heteros, and the like) have higher rates of dysfunction,
rather like the unemployed? Hmm, I wonder if there's maybe a similar principle at work. And
my solution is not to turn all the people of color white nor to change all the women to men
nor to "cure" gays. Well, maybe a few more conclusive studies of this kind will convince me
that we must all be the same, toeing the line for those whom it has pleased God to dictate
our values to us.
I am convinced that we shouldn't outlaw jobs, because I believe the tons of stories about
happy people in their jobs However, I also believe we shouldn't force everyone into jobs,
because I know tons of stories about happy people without jobs. You know, the stories that
the JG people explain away: parents caring for their children (JG -- "oh, we'll make that a
job!"), volunteers working on local planning issues (JG -- "oh, we'll make that a job, too.
In fact, we'll make everything worth doing a job. The important thing is to be able to force
people to work schedules and bosses, because otherwise, they'll all lie around doing nothing
and be miserable"), the retired (JG -- "that's not really the same, but they'd be better off
staying in a job"). And this is all before we get to those who can't really hold a job
because of disability or geography or other responsibilities.
I support the JG over the current situation, but as to what we should be working for, the
more I read the JG arguments, the more paternalistic and just plain narrow minded judgmental
they seem.
Data like that provided by Mitchell is important to demolishing the horrid "economic
anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of
rugged individualism) and (b) the effects are real and measurable. It's not surprising, when
you think about it, that the working class is about work .
* To put this another way, anybody who has really suffered the crawling
inwardness of anxiety, in the clinical sense, knows that it affects every aspect of one's
being. Anxiety is not something deplorables deploy as cover for less than creditable
motives.
Financial ignorance of students is a big problem. Big fiancne in the USA is predatory and hunts for weaklings and incompetent
to exploit them. In a very sophisticated ways. So a reasonable assumption would be that the US students is a prey hunted by
large financial predators including neoliberal universities themselves.
Notable quotes:
"... They are financially ignorant; mere babes, being unmercifully exploited by the sophisticated (emphasis on Sophist) financialization culture extant across the western world; especially the U.S.. ..."
I am late to write up a research paper that has not gotten the attention it warrants.
As most readers know, the 2005 bankruptcy law reform included provisions that made it
virtually impossible to discharge student debt in bankruptcy. Yet borrowers who miss payments
wind up paying penalty interest rates, with the result that they will carry their student debt
with them to the grave.
But why do student borrowers get such harsh treatment? The justification for the bankruptcy
law change was that student borrowers were prone to abusing the bankruptcy code even though
they had the ability to make good on their loans. I've never bought the "strategic default"
meme, which is almost entirely creditor urban legend to justify squeezing more blood from the
stone of broke borrowers. Bankruptcy is a painful process that leaves your credit record
damaged for years. And why should anyone think that student loans were more prone to abuse? If
someone declared a Chapter 7 bankruptcy pre-2005, the court would take all the assets it could
lay its hands on, allocate the proceeds among the various debts, and wipe out the rest. It's
not as if student loans were treated worse than any other non-collateralized loans.
Nevertheless, the argument was that student borrowers were defaulting opportunistically. If
true, that higher default level would lead lenders to charge higher interest rates to cover for
the cost of abusive defaults.
The prototypical strategic defaulter would be someone with few assets but high actual or
expected income.
In a new Philadelphia Fed working paper, Rajeev Darolia and Dubravka Ritter constructed a
database of private student loan (PSL) borrowers to see if their behavior changed as a result
of the bankruptcy law reforms. We've embedded their article at the end of the post. Their
conclusion:
Our findings contribute to this debate by providing evidence on bankruptcy filing and
default behavior using a unique sample of anonymized credit bureau records. Although the 2005
bankruptcy reform reduced rates of Chapter 7 bankruptcy overall, the provisions making PSL
debt nondischargeable do not appear to have reduced the bankruptcy filing or default behavior
of PSL borrowers relative to other types of student loan borrowers at meaningful levels.
Therefore, our analysis does not reveal debtor responses to the 2005 bankruptcy reform that
would indicate widespread opportunistic behavior by PSL borrowers before the policy change.
We interpret these findings as a lack of evidence that the moral hazard associated with PSL
dischargeability pre-BAPCPA appreciably affected the behavior of student loan borrowers.
So why are default levels now so high? Lenders relaxed their standards and handed out more
credit as a result of the 2005 bankruptcy reforms. And rising higher education costs means
students are borrowing more than ever.
Having been a debt slave; I can understand what the children (they are children, not
adults) are going through. They are financially ignorant; mere babes, being unmercifully exploited by the sophisticated
(emphasis on Sophist) financialization culture extant across the western world; especially
the U.S..
No loan should be allowed (for children) without a course in basic finance, debt, credit,
and income realities. Now retired, debt free, and solvent; I know of what I speak. Critical
thinking skills are at an all time low in the U.S.; a very serious societal problem; not soon
solved
What about the time-worn argument in favor of all the extra money you're going to make
because you went to (genuflects) college? A lot of people have gone deeply into debt because
they've heard this one. And it's a lie.
http://bitecharge.com/play/advgram#q26
Congratulations, you are a grammar master! You have a superb understanding of even the
trickiest grammar rules. Not only do you know the difference between affect and effect, but you
also never confuse your tenses. You must be an English scholar because only 4% of Americans can
get a perfect score on this test.
Affirmative action in education also applies to children of the elite. This is the way to
limit vertical mobility and entrench the existing elite structures making the elite status
inheritable, like under feudalism.
Notable quotes:
"... As the barriers between the overpopulated third world and the United States continue to be swept away, it may soon be the children of liberal upper-middle class white Americans who are clamoring for affirmative action – or at least, for less reliance on standardized test scores. ..."
"... That law should have had a sunset built into it, though. To keep it "forever" invites abuse that grows over time. ..."
"... As always, identifiers of the main murderous, narcissitic, psychopaths making this anti-merit based agenda happen is necessary. They've used the old divide and conquer strategy of group blame for millennia, "It's them whites, or it's them blacks, or Jews, or etc.etc etc. ..."
Whether this anger is somehow justified is, of course, a question of immense complexity but
let me offer three observations that explain its scope regardless of its justification. My
point is that affirmative action and other egalitarian social engineering nostrums
inescapably spreads antagonisms beyond those immediately affected by the policies. And
the anger will only grow as government keeps pushing the egalitarian fantasy.
First, violating the merit principle, whether in college admissions or hiring police
officers guarantees disgruntled white males far in excess of its true victims. Consider hiring
five firefighters strictly according to civil service exam scores. Let's assume that a hundred
men apply for the position and can be ranked by test scores. The top four are white and are
hired. Now, thanks to a Department of Justice consent decree, the fire department must hire at
least one African American from the list and if the highest ranking black scores at 20 in the
array he will be hired despite his middling score.
How many white males have actually lost their job to a black? The correct answer is exactly
one, the fifth ranking applicant. But how many whites will mistakenly believe that they
lost out to an affirmative action candidate? The answer is 14 since this is the number of
rejected white candidates between 6 and 19 and, to be honest, all can make a legitimate claim
of being passed over to satisfy the diversity bean counters. Further fueling this anger is that
each of those fourteen "unfairly" rejected applicants may complain to family and friends and
thus tales of the alleged injustice multiply though, in fact, only a single white applicant
lost out to a less qualified black.
Affirmative action is thus a white grievance multiplier if this information is public (as is
often the case in university admissions and in reverse discrimination litigation). No doubt,
every Spring when colleges and professional schools such as law and medicine mail out their
acceptance/rejection letters, millions of white males can honestly complain that they
would have been admitted to their first choice if they had only been black or Hispanic and
judged exclusively by test scores. Of course, if the university admitted all those whites who
exceeded the scores of the least qualified black, the university would have to dramatically
increase the freshman class, a policy that possibly tantamount to admitting nearly every white
applicant.
Second, the greater the pressure to increase "diversity" via adding additional
under-qualified blacks and Hispanics and not expanding enrollment, the greater the visible gap
between affirmative action admittees and all others. Again, everything is purely statistical.
For example, in the pre-affirmative action era only a few blacks attended college, nearly all
of whom got there on merit. Whites (and Asians) would likely view them as equals, no small
benefit in a society obsessed with expunging "racist stereotypes" regarding black intellectual
ability.
Now imagine that due to government pressure the number of blacks admitted substantially grew
and, unless overall enrollment correspondently expanded, fewer academically borderline whites
would be admitted so college life became an experience where smart whites encountered lots of
intellectually challenged blacks.
Ironically, as per claims that campus racial diversity provides wonderful learning
experiences, what might a white student with, say, a total SAT reading/math score of 1350 learn
from his black dorm mate who scored 1150? (This is the average
white/black SAT gap.) I'd guess that the white student would learn that it's good to be a
favored minority in terms of obtaining full-ride scholarships, internship programs, and job
offers from top firms. Try to imagine a better way of teaching about white privilege.
Third, as the political pressure for yet more diversity increases, coercion will
correspondingly become more draconian and thus more odious since it takes extra effort to force
employers or universities to dig deeper into a thinner and thinner talent pool. A parallel is a
parent faced with a child reluctant to eat vegetables. The pressure may begin softly --
enticing junior to eat a few French fries but it will grow stronger as Mom adds disliked
turnips, lima beans and cauliflower. At some point, promoting "good nutrition" may require
force feeding.
I have personally observed this escalating pressure to diversify college faculty, pressure
that even liberal faculty find objectionable. During the 1970s the emphasis was on relatively
painless voluntary measures: recruitment committees would append "applicants from previously
under-represented groups are encouraged to apply" on job postings, tweaking teaching
responsibilities to attract minority candidates, or Deans providing extra funds for the job
slot if a black or Hispanic could be hired. Gradually, however, as these benign tactics failed
to make the numbers, the apparatchiki tightened the screws -- Provosts would independently
scour the market for minority job candidates or appoint a non-departmental "political
commissar" to monitor faculty recruitment committee deliberations to insure that no promising
minority candidate was overlooked.
Hiring discussions were soon filled with euphemisms such as "targets" or "goals" since
quotas were illegal under the 1964 Civil Rights Act. Increasingly, the
push for faculty diversity has come to resemble Chinese political indoctrination where even
the term "affirmative action" is verboten since it implies unequal ability. At the University
of California -- Riverside, for example, all candidates for faculty jobs (including the
sciences) must submit a statement describing how they've worked to promote diversity, equity
and inclusion in previous positions as graduate students or professors and how they planned to
continue to do so once on campus. And guess what? Those who give superior answers to these
questions surprisingly turn out to be from historically under-represented groups! Cynthia
Larive, Riverside's interim provost, said that avoiding numerical targets "gets people out of
thinking about a quota system. We want to hire outstanding faculty members who can help the
institution continue to be successful and, most importantly, who can mentor students."
Needless to say, the diversity apparatchiki assume that all liberal white faculty, even
those in the hard sciences, are debilitated by implicit bias so they have to be pushed to
overcome their doubts about possibly hiring a black physicist from a third-tier school. At
Boston College faculty receive special training through the Office of Institutional Diversity
to develop strategies to promote diversity and are thus instructed, for example, to avoid
"narrow professional networks" (i.e., contacting colleagues at other schools) in seeking out
top job candidates. After all, why assume that the next Richard Feynman will have been trained
at a MIT or Princeton?
What makes this coerced diversity so hard to swallow is that its purpose rests on a
plain-to-see but impossible to express fraud -- the alleged benefits of diversity. Indeed, the
elite's obsessive proclamations of this lie far more closely resemble propaganda than
celebrating a cliché-like truth. Simply put, if diversity is so wonderful, and in the
self-interest of universities and businesses, why must it be imposed forcefully? Surely if it
was as beneficial as advertised, there would be no need for disparate impact lawsuits, training
to overcome implicit bias and similar measures that resemble mothers punishing junior for not
eating his lima beans. Does government and the social justice camp followers really believe
that diversity is akin to chocolate or red wine whose consumption hardly needs coercion?
Now for what really fuels the anger over coerced diversity: it is one thing to demand
sacrifices
What makes this coerced diversity so hard to swallow is that its purpose rests on a
plain-to-see but impossible to express fraud -- the alleged benefits of diversity. Indeed,
the elite's obsessive proclamations of this lie far more closely resemble propaganda
than celebrating a cliché-like truth and it is hard to imagine a bigger lie than
"Diversity is Our Strength."
Why the use of the nebulous term "elites"? Why not call a spade a spade and admit that
"Diversity is Our Strength" is a tagline of the Anti-Defamation League (ADL)?
Why not tell your readers that, after working away at it for 100 years, it was the
domestic wing of The Lobby that was responsible for getting the non-restrictionist
immigration act passed in 1965, which is the biggest reason the US has become such a
multicultural society?
This information would have been a useful backdrop to this article.
The real problem with AA isn't the occasional less competitive white applicant losing out to
an even lower scoring minority. It's the subjective aspects of AA that cause constant
inconvenience, conflict and even ridiculous manipulations to level the playing field. The
most recent and ridiculous example being the expansion of gender categories along with custom
pronouns.
"Racism" is he lynch-pin of this massive shake-down. Proposal: make an operational definition
of "racism" and punish anyone who misuses it. Suddenly, the accusations would stop.
When I became a New York City firefighter in 1962, the entrance exam was a multiple choice
test on civics and science. The physical exam was a rigorous challenge that most people would
have to train for months before, for instance, to get the top score, one had to lift ninety
pounds with one arm and seventy pounds with the other. Both tests were graded and the average
of the two determined your place on the list. Nowadays, because of a court order to
diversify, the written exam tests are largely questions supposedly probing the psychological
makeup of the applicant that one would have to be an idiot not to recognize the response
wanted. The physical has been largely degraded so that more women can pass it and it is not
graded, one simply has to do the minimum to pass. Recently, a black recruit failed
probationary school three times and was given a fourth chance. Make of it what you will.
You are making a huge mistake if you limit the effects of affirmative action to elite college
hiring and admissions. Affirmative action cuts through every level of society, and I argue
that it's far more of an issue at the lower and middle rungs of society, where most Americans
work and live. In many companies, this is the level where you will find their black
employees, supervisors, and managers. It's not exactly pleasant to be white in such a
situation, and your chances of working your way up from the bottom are slim, no matter how
competent or willing to work you are. You could also examine how whites are treated in
minority majority cities. Reverse discrimination is just the tip of the iceberg.
To gloss over the full scope and scale of affirmative action is to mock the situation of
many of the victims of affirmative action. If you really wish to be honest about "white
anger," you would look at the racial violence and rapes directed at whites, and ignored or
justified, by the elites and media, as well as the completely unwarranted, unwanted, and
undemocratic cultural and demographic changes forced upon the nation/whites over the last 50
years.
Good points, js. You put a good brake on some of the arguments made here, including my
own. Reality is that an unknown percentage of people who are hired by irregular means, such
as crony and patronage practices, including ethnic affinity and family relations, do okay,
grow into their jobs, and earn the reasonable respect of their peers, superiors, and
subordinates. Likewise, the determination of quality of applicant by ordinary standards of
merit and seniority can be a bear.
Indeed – but be careful what you wish for, you may get it.
India has a terrible educational system – about half the country is illiterate. But
the other half is still bigger than the entire United States, they are desperately poor, and
there are tens if not hundreds of millions of children who have been trained from birth only
to excel at standardized tests for just the slim change of escaping that overpopulated land.
And unlike the much more prosperous Chinese, they speak English and there is no language
barrier! All by themselves, Indian nationals could soon fill every academic position in the
United States with people who have perfect test scores.
As the barriers between the overpopulated third world and the United States continue to be
swept away, it may soon be the children of liberal upper-middle class white Americans who are
clamoring for affirmative action – or at least, for less reliance on standardized test
scores.
I was once one of those women who were hired into and trained for a job that had been
reserved for males. I was so proud, and so happy the system was changing. My male colleagues
were a mix -- some supported me, some less so. But I think all accepted that changes needed
to be made.
That law should have had a sunset built into it, though. To keep it "forever" invites
abuse that grows over time.
As always, identifiers of the main murderous, narcissitic, psychopaths making this anti-merit
based agenda happen is necessary. They've used the old divide and conquer strategy of group
blame for millennia, "It's them whites, or it's them blacks, or Jews, or etc.etc etc.
Cell
phone aps which identify these creeps with retinal scanning, pulse rate changes, facial and
body language indicators is an easy & cheap development given today's level of
technological advancement. Guess who will oppose its inevitable adoption the most?
Two others I can think of are the other firemen who must now suffer him, and the
community who feels less secure (I personally avoid black doctors, sorry).
Just so – reminds my of how my mom, presenting at emergency with a partially
paralyzed left arm and leg, was told "I don't think this is a stroke" by the African resident
– and left to wait it out until the CT confirmation the following day.
It would be instructive to see how some of the hardened advocates of affirmative action
would behave if given the black-or-white choice on a critical medical issue.
Nick 7 months ago Totally
agree with you. Personally I'll always wear shirt and trousers to work regardless of the
dress code. It seems to put me into 'work mode' leaving casual wear to provide me with a
disconnect from work for evenings and weekends.
I find this approach to be even more important when I'm working from home. My Son seems
to respect the 'do not disturb daddy' when I'm in formal wear.
Lindsay Hill Nick7 months
ago I hadn't thought about it in the context of working from home. Makes total sense
- gives you that physical cue to switch between 'work mode' and 'home mode'
"... By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet ..."
"... HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice. ..."
"... I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line. The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world. ..."
"... Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude. ..."
"... When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck. ..."
"... When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded. ..."
"... Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort. ..."
Yves here. Holey moley. One
of the good things about working for fancy firms early in my professional life was I saw how
much they charged, even when the work was often pedestrian or even dubious. So I was never shy
about setting a healthy price for my time. But regardless, how could anyone bid under the
minimum wage?
The only time I could see that making any kind of sense would be if you were
breaking into a new area and would have reason to expect the client would give you a very
valuable reference, or better yet, referrals, if they liked what you did. But my experience has
always been that clients who go cheap never appreciate the work done for them.
By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA.
Originally published at
Alternet
Surround yourself with positivity, exploit all marketing outlets, choose a specialized skill
-- this is the repetitive wisdom passed on to every budding creative entrepreneur. Less often
do we hear advice like, "increase the price of an invoice," or "make it non-negotiable,"
especially as it relates to the gendered wages within self-employment.
The freelance market is arguably trending across industries, with some figureheads going so
far as to say " freelance is
feminist ," mainly because women make up a slight majority. Unfortunately, before feminists
get too heady on the issue, we need to look at whether the freelance market is any more
"freeing" to the women in it, or if it is liberating any of its entrepreneurial workforce.
Right now, it's just another deregulated economy in which workers are underpaid and largely
invisible.
A recent study published by HoneyBook gives some visibility to the subject, showing that
women in the "creative economy" are actually paid significantly less than their male
counterparts, sometimes taking in an average of $5 an hour .
There are many reasons for concern about this wage discrepancy. Not only because HoneyBook
found that 63% of men and
women believed they were earning equal pay, but also because of the growing workforce
within the world of freelance, where there are already 57.3 million
freelancers in the U.S .
Industry data from UpWork and the Freelance Labor Union suggests that freelancers will be
the majority by 2027, growing three times faster than the U.S. workforce overall, and
contributing over $1.4 trillion to the U.S. economy annually. While scenes of cramped coffee
shops may be an indicator of this burgeoning workforce, these numbers are still astounding.
Without sites like UpWork and HoneyBook, they would also be hard to track.
HoneyBook is the self-employed's business management tool, hosting clients similar to those
in the aforementioned study. Labeled under the guise of "creative entrepreneurs," they are
working professionals navigating gigs in industries like photography, graphic design and
writing. With its niche data, the site analyzed over 200,000 client invoices from October
2016-2017 to look at wage discrepancy, finding that on average women made 32% less than their male competitors
. This gap is even larger than the national average, where women earn 24% less than men
nationally , 76 cents to the dollar. Troubling news for the largest, opportunist workforce
around: that is, women in freelance.
In 2015, women made up 53% of the
freelance market . This slight dominance encouraged Sara Horowitz, founder of the Freelance
Labor Union, to preemptively call freelancing "feminist." Horowitz argued that the lifestyle of
a freelancer was more palatable to the roles women desired, whether that was co-careers or
gendered domestic labor. She also argued that freelance work allowed women to avoid male
privilege in the workplace, notably
the boys club at board meetings .
While some of Horowitz's arguments hold value, we can clearly see how freelance work is
still an unequal field, at least if pay is any measure of equality among genders. Women who do
enter the field already consider themselves to have
less bargaining power . Meanwhile, the majority of invoices in HoneyBook's study quoted a
non-negotiable price, meaning women are more likely to charge less for the job. Clearly, the
reasons for the gender pay gap are embedded and multi-layered. Nevertheless, the study shows
that freelance is not entirely the liberated, equal rights, equal pay landscape Horowitz claims
it to be.
Asked why they enter the market, freelancers often cite
the flexibility of the work in a number of terms: the ability to be their own boss, as well
as the ability to choose their projects and work location. In essence, men and women draw upon
idealistic dreams of escaping workplace power-dynamics to find economic independence in their
pajamas --
a depiction that has been repeatedly critiqued . Freelancers still enter a labor force that
has few
congressional protections and is arguably as successful
as the social networks you were economically born into. Essentially it is prey to the same
laissez-faire ideals that have manipulated structural inequity across generations of workers in
the U.S. It just imagines itself differently -- now under the guise of "creative"
entrepreneurship.
HoneyBook's research is just one insight into wage gaps. As a largely deregulated
economy with unparalleled growth, it is important to make visible the economic and social
divides embedded in the independent workforce. We can start by debunking the claim that
freelancing is a more equitable field to work in, and with it, the idea that any economy is
without prejudice.
I would also argue that so called 'regular' employment is trending towards a
"freelance" structure. Job tenures are supposedly shrinking and often going away completely.
Now, that salaryman window tribe dweller is often outside of that window, washing it on a
piecework basis, with no safety line.
The underlying rationale for the rise of the 'freelance' work structure is to first crapify
the freelance 'experience,' with lower wages a must, and then, second, extend the
'neo-crapified' work rules into the previously "safe" 'regular' work world.
The only rational response to managements' claim that "we can get someone to replace you
if you do not agree to our demands," is to simply walk away from the "golden opportunity."
Sooner or later, all exploitative systems fall apart due to their own internal
contradictions. It can be painful, but: No pain (economic micro-dislocation,) no gain
(guillotines in Town Square.)
On the feminism front, and please remember that this is an older man writing, I would find
any situation where the individual allows outside forces to define said individuals self
definition, as the opposite of "liberating." Except in rare cases, what else is 'freelancing'
but a "race to the bottom?" If one is to accept the 'freelancing' ethos as presently
presented, one may as well embrace the 'contemplative life' and accept fasting and privation
as a path to communion with the godhead.
Freelancers driving the price of their labor down to $5 per hour because they have to
compete against all the other people who can't find steady work is not a feminist
issue– its a class issue. And that is no less true if males make $2 more per hour
because of sexual discrimination. The real enemy is the billionaire who owns the corporation,
the politicians, and the enforcers that grind workers down into virtual servitude.
There is
always choice. There are always drugs to be transported and sold, money to be laundered, or
accounting fraud to be fabricated. There is always choice even if the consequences are
severe. It's long been known that the fastest (and only) way for a woman to become a movie
star is on her back.
When a fat pig movie director pushes you down on the "casting couch" there has always
been the choice to reach for the Mace or the revolver in the purse. Submitting is
prostitution, choice is rejecting greed for riches and fame and joining with others to throw
the boot off your neck.
There is no organization called the Freelance Labor Union. Horowitz's organization is
called the Freelancers Union and it is little more than a buyers club. It has yet to call a
strike or organize a picket line. Nor does it call out the companies that exploit
freelancers.
$583,283.25 – using the annuity formula from Stewart's 4th edition precalc book (it
is surely the same formula in all his books ) & taking that 5 bucks an hour TIMES 2080
hours of pay in a year (40*52) = amount to save every year, for 30 years, at 4% interest.
Now, realistically, whoever underpaid you just bought a few more trinkets for today's
mansion, jet, yacht or mistress but you could have saved that money!
When they turn 50, if they survive that long, they'll be replaced by younger cheaper
labor. Nothing really changes, except the words we use to describe our sad condition and the
lower and lower age at which we're discarded.
Freelancing is much like entrepreneurship in that it has been way oversold to the
public. Most people don't do well either as freelancers or as entrepreneurs and would likely
be better off as normal employees. The emphasis on "alternative" work arrangements has taken
public attention away from improving the lot of traditional employees and contributes to the
devaluation of ordinary workers by suggesting that they are lazy or stupid because they
didn't become freelancers or gigsters or entrepreneurs of some sort.
Many young people seem to have fallen into the trap of putting too much emphasis on work
flexibility over a steady paycheck. These kinds of alternative work arrangements might be fun
and cool when you are in your 20s but not so much after 30 and especially if you want to
start a family and need a steady and reliable source of income.
I was a free lance in publishing for about twenty-five years. The tell here is the mention
of pajamas: Are we still in the world of people who want to work in their pajamas? One thing
I learned right away is that you have to get up each morning, dress like an adult, schedule
the number of billable hours that you want to charge for, and send in invoices regularly. The
successful free lances, male and female, did so. The people who started work at three in the
afternoon, after cocoa with marshmallows all day, didn't succeed.
I suspect that hourly charges among free lances are falling: That is part of our friend
"right to work," which keeps wages down. It is also part of the massive amount of outsourcing
going on. In publishing, responsibilities that always were kept in house and should remain in
house are being outsourced.
I'll also note that one of the reasons that I became a free lance, besides knowing what I
could charge for my work, is that many offices are toxic environments socially and
politically. There is a lot of stress on conformity. There is no concern for original
thinking. Inventing the wheel is considered original.
And as someone who has worked in publishing for many years and knows many talented and
powerful women in publishing, I left my last job shortly after the head of the division
introduced the new editor in chief for books as a woman. That's right. The first words: M.K.
is a woman.
M.K. turned out to be a nonentity who exploited the organization for personal ends. She
was a great absentee manager! And I no longer had a desire to be around the endless re-runs
of resentments of fellow employees.
I can remember meeting freelancers in the 1980s and 1990s. The good ones were GOOD. As in,
they had waiting lists -- you had to book them a couple of months in advance. And they
charged accordingly.
These days, that seldom happens. Why? Because there are too many people who can't find
jobs, or they only get hired for part-time work, and they have to fill the rest of their
time. Such trends do not make for increasing hourly rates.
Arizona Slim: My dance card was always filled. But as you mention above, after age 50, I
kept thinking, Am I a daring American entrepreneur and sole proprietor, or am I just
terminally unemployed (and unemployable)?
OK, what's to stop women from charging higher rates? Lower self esteem? Are their lower
wages for each hour worked? Or, do they work fewer hours?
"they are working professionals navigating gigs in industries like photography, graphic
design and writing ." Clean, no lifting, paid to create gigs where you don't get your hands
dirty, or put your body in perilous exhausting situations.
If women want to earn money, learn to be a plumber. Yes, you will get a face full of shit
occasionally, will bleed, get burned and will earn $75 an hour, often in cash.
There's a shortage of linepersons to install power lines. Up on that lift bucket, 80 feet
in the air, leaning out and ratcheting in 10,000 volt live wires covered with a rubber shock
cloth, you can make astounding amounts of money. Why aren't more women up there? Companies go
out of their way to hire women.
No mention of the free labor slave pit called "internships." How many of us have gone
through that
voluntary servitude?
I have training in the trades and have worked as a bike mechanic. On the positive side,
there's a pride of workmanship that you do not get from office work or from freelancing while
sitting at a computer. And there's the camaraderie. I never experienced anything like it --
except in that hot, greasy, dirty bike shop.
On the negative side, you can get too old and broken down to do the work. OTOH, you can be
a sit-down freelancer until you die.
What stops women from negotiating male-equivalent wages varies. Timidity and poor
negotiating skills is part of it. As Yves said above, it helps immensely to have been exposed
to the billing practices of real winners in this game. And they are disproportionately men,
specifically, men who operate like real machers.
The biggest factor is IMO, information deficit. Professional class people throughout many
industries are idiots when it comes to freely discussing remuneration with their fellow wage
slaves. Everyone acts as though their compensation package were as private and faintly dirty
as .. another package.
It's idiotic. The vast majority of us would be better off if we blurted it out over lunch
ever few months. And walking away a few tifmes is key. It's good for you. Likewise, if you do
need to take a poorly paid gig some times, treat it as slightly less than full time. Keep
lining up others. Create the bare minimum of deliverables as swiftly as you can, and get out.
Those who underpay you do not deserve your maximum effort, and they're invariably shitty
references, so do not anguish over doing only the job they've paid for.
Just don't stiff or cheat anyone lower down the line if you take an underpaid gig. I
watched a guy do that recently on a contract job that put him into contact with me, an
under-remunerated grad student. He didn't cheat me, he cheated the agency I worked for of
some small use fee. Right in front of me. His consulting firm is not one I'll be looking to
work for any time soon.
Also, always write a late charge fee in your contract. 120 day "billing cycles" are
abusive garbage in the age of computers. After thirty days, the price goes up.
Women who let themselves get stiffed all the time are a real danger to the interests of
the guys in their line of work, not just themselves. I wish more guys could see that.
Fluffy: Yes. Know rates, and have a group of friendly free lances who will tell you what
they are being offered these days. And what hourly they will turn down.
Firing clients is a necessity. I learned that from a sole proprietor who I worked for in a
small typesetting / editorial / graphic design shop. The customer isn't always right. There
are psychic benefits to firing a bad customer. And word sort-a gets around that there are
people who / companies that you refuse to take work from.
I suspect it's utter mythology that women do not attempt to attain far better paying
manual labor jobs than they do.
Speaking of high voltage wires, I know a woman who was in the International Brotherhood of
Electrical Workers Union (Brotherhood says it all!). She worked on large commercial
construction, such as the NUMI Plant (now Tesla). While she endured it through to her
retirement she had a horridly abusive (and life threatening on one occasion) go of it. Sexual
harassment (made worse by the fact that she had an hourglass figure), an actual physical
threat, knife included, while being locked in a room with someone she had already reported as
having harassed her, but was forced to work with him anyway; utter resentment of women on the
job; and stunning racism (the black males in that Brotherhood , did not fare much
better as to the racism) in the tolerant Bay Area.
As to plumbing, the bay area has current and frequent plumbing school ads on TV which
feature no women at all, and a real bro-bro atmosphere which all women who've been sexually
harassed are familiar with. At one point in my life, despite having a licensed profession, I
offered to apprentice to a plumber who just laughed at me (at the time, I was able to do
twenty chin-ups).
And, my experience (pre putting myself through college to attain a livable wage), trying
to get a job doing manual labor that actually paid a decent wage was utterly unsuccessful. I
did have a nursery job, and a very brief job at a thoroughbred stable (the owner was a horrid
human being so I quit). At both of those jobs, the only males were illegal immigrants from
Mexico, and the wages in both jobs were under regular minimum wage ag wages.
Further, to imply that 'sit' down jobs don't have their fair share of health damage, is
like saying that emotional abuse does not exist, and is not deadly when one's spirit is
killed in a situation where the other wields far more economic and social power.
Many, unfortunately too many woman included, still feel that a white or non-black male
will do a better job, no matter what that job is. For instance (and I don't know what it's
like now) I recollect while waitressing that only males were offered high end, far better
tipping, jobs in pricier restaurants. At the time, I never saw a female waitress in a high
end restaurant.
"... The other problem is systemic. This is the vicious, capitalist devaluation of academic labor. Anyone who holds some asinine fantasy about the "logic" of the market solving the adjunctification of the academy needs to shut up. ..."
"... Whether "meant" to be a career or not, adjuncting is a career for many--and our institutions have made it that way by refusing to hire enough full-time professors to cover the courses offered. Adjuncts are being exploited by institutions across the country. THAT is what we need to focus on, not individual career choices. ..."
"... I don't know if neoliberal professors are increasing in numbers or if they just have greater access to publish. I imagine it's the latter. The take on the situation from those off the tenure track is quite the opposite, obviously. This is what we need to reiterate: "Adjuncts are being exploited by institutions across the country. THAT is what we need to focus on" ..."
"... I'm a career advisor and every once and a while an adjunct faculty person will come visit career services for assistance. They are generally completely absent of career management skills. They tend to be people who were very good at college, so they went to grad school sort of assuming they'd be able to get a job that way. ..."
Angry About Adjuncting? The radical move might be to quit, writes Claire B. Potter.
150 Comments
Recently I stumbled across an article in
The New York Times about my favorite topic: online academic rage -- and whether it spikes
among those frustrated by the struggle to find a tenure-stream job. "Is there something about adjunct
faculty members that makes them prone to outrageous political outbursts?" Colby College sociologist
Neil Gross asked.
Citing recent examples in which the most vulnerable among us have been fired for an impolitic
tweet or Facebook post, Gross argues that full-time faculty members are not the "tenured radicals"
that American conservatives have feared since the 1990s. Instead, he proposes, the vast majority
of full-timers are "tamed" by the prospects, or long-term comforts, of tenure. Research accounts,
regular raises, the orderliness of being able to plan our lives and the satisfaction of promises
kept inevitably sutures most of us to civility in all its forms.
But what incentives do workers who are already vulnerable in so many ways have to be polite? Although
many people with humanities Ph.D.s do other jobs, this stubborn belief that they have trained for
one thing, and one thing only, keeps many adjuncts on the hamster wheel long past a time when frustration
and sorrow have turned to rage. Aside from the stress of trying to piece together a career one course
at a time, the adjunct army -- permanently contingent, underemployed, overworked and underpaid faculty
members -- has every reason to demand radical change.
But do these conditions produce a truly political radicalism, or are they simply radical
utterances that get contingent faculty into trouble and leave a system that relies on a reserve army
of labor unchanged? And since people with doctorates aren't tied to a particular factory or industry,
would the radical solution be to stop teaching as a per-course adjunct?
There are two types of problems here. One concerns the individual misfortunes that plague adjuncts.
Adjuncts' problems are lamentable, even if solvable, and it would be nice to see people in our
society have some compassion rather than excuse their own apathy with callous blaming of people
in unfortunate circumstances.
The other problem is systemic. This is the vicious, capitalist devaluation of academic labor.
Anyone who holds some asinine fantasy about the "logic" of the market solving the adjunctification
of the academy needs to shut up. You do terrible damage to our society. The simplest and most
obvious solution to a lack of PhDs to work as adjuncts is to hire MAs.
Universities are already
hiring undergrads to do some of the academic work. You are off your gourd if you think the people
who want to siphon profits to the top will not try to further degrade academic labor, or, haven't
you been paying attention to the hoopla around MOOCs? The only solution to the precariate is unionization
and a demand for all academic labor to provide middle-class standards of living.
That means that
the cowardly and lazy tenured faculty will finally have to do their jobs and guard the academy.
I agree with most of what you say, except that my experience says that administrations would
rather hire MAs than PhDs because PhDs demand the salaries that align with their higher education;
and, because PhDs are generally more experienced in academe, they are less agreeable than MAs
to accepting administrative initiatives that are tangential to faculty teaching and research.
"The simplest and most obvious solution to a lack of PhDs to work as adjuncts is to hire MAs."
This is already occurring, even outside of the humanities. I know some great instructors without
their doctorate, but hiring a large number of instructors without a terminal degree does seem
to go against the ideal that a professor teaches undergraduates, keeps up with the latest in his
or her field, and produces knowledge in that field.
While in a master's program at a large research institute, I was given my own classes, even
though I only had a bachelor's degree. I was happy to get the experience, but with my background,
I probably should not have been teaching those students
Actually, if you look at 50-60 year old faculty lists a fair number of faculty had masters.
Masters were originally meant to be a teaching qualification, PhDs were a research qualification.
The masters as a teaching qualification got squeezed out because of too many PhDs between 2 and
3 generations back.
Adjuncting is not now, and was never meant to be, a career. We can complain about working conditions,
lack of benefits/stability, and the stress of cobbling together enough courses to pay the rent
all we want (and we do) but the bottom line is this: If you haven't landed a FT teaching gig within
three years of earning your Ph.D., bail out and choose another career. The person who can't eat
after 20 years of adjunct work has no one to blame but themselves. Keep fighting, but take care
of yourself, too.
Whether "meant" to be a career or not, adjuncting is a career for many--and our institutions
have made it that way by refusing to hire enough full-time professors to cover the courses offered.
Adjuncts are being exploited by institutions across the country. THAT is what we need to focus
on, not individual career choices.
I agree. Blaming adjuncts for being adjuncts, wishing they would not have enrolled in PhD programs,
and encouraging them to take jobs in fields for which they did not study (alt-ac), is a very ugly
game.
This is compounded by the fact that people of color and women are far less likely to be on
the tenure line. None of this seems to bother the rising tide of neoliberal academics, who almost
without exception have never worked off the tenure track, and maintain pushing people toward careers
they do not want to do, are not educated to do, and could do with out a PhD, is a way to solve
the problem.
I don't know if neoliberal professors are increasing in numbers or if they just have greater
access to publish. I imagine it's the latter. The take on the situation from those off the tenure
track is quite the opposite, obviously. This is what we need to reiterate: "Adjuncts are being
exploited by institutions across the country. THAT is what we need to focus on"
There is no reason the job has to be set up the way it is. Most colleges & universities use
far more adjuncts than fluctuation in enrollment and funding would account for.
The "too many Ph.D's" argument falls apart when you think about how easy it is to get an adjunct
job. Two of the four districts I've worked in didn't even do a formal interview. I just met with
the department chair to discuss when I was available. I work more than the equivalent of full
time at two different districts every semester, so theoretically, one full time job could exist
for me.
My wife is a K-12 public school teacher, and her first year teaching, she made as much as I
did after ten years as an adjunct with a master's (except she didn't have to work summers and
did get health insurance for our whole family).
We could probably fix it in a cost neutral way if administrative positions and salaries weren't
growing faster than the number of full time teaching positions.
As an academic you should know that the way things are wasn't handed down by god, and isn't
an immutable law of nature. Someone made it this way and it can be unmade too.
Frankly, I feel sorry for you as I do for the administrators and full time faculty who look
down on their adjunct colleagues. You have been a subject in a real life Milgram or Stanford Prison
experiment and took the bait
Fair warning, what I'm about to say is completely anecdotal. I'm a career advisor and every
once and a while an adjunct faculty person will come visit career services for assistance. They
are generally completely absent of career management skills. They tend to be people who were very
good at college, so they went to grad school sort of assuming they'd be able to get a job that
way.
They continued to do no meaningful career planning while in grad school, and after completing
were able to use their familiarity with college systems to piece together some adjunct work. When
asked simple questions such as "what types of careers outside of academia have you explored?"
they are unable to answer.
They lack the ability to identify and describe their transferable skills, have only shallow
understanding of what career paths are available, and struggle to engage in even simple job search
tasks. These are extremely intelligent people with a huge gap in their career competencies.
I think a major reason we don't see more adjuncts quit and move to other industries or even
other roles on campus is because they simply do not know how.
On the flip side of this though is the fact that those with a lot of applied (in terms of non
academic aspects) work in their field often do not fair as well in FT searches. Those from working
class backgrounds or who worked throughout grad school are often seen as less desirable in searches
even though they are the ones who are most likely to know how to advise students on realistic
career paths. I finished my PhD with 10 years of industry experience in the non profit, consulting,
and governmental sectors but even at undergraduate serving institutions this often had less cache
then the handful of publications I had produced.
Yeah it's a catch 22 for grad students. If they take the time to get industry experience, that
will help them volumes in alt ac careers, but ding them in academic ones.
All that your comment shows is that adjuncts are easy targets, even for career advisors. The
fact that you recognize your comment as anecdotal does not exempt you from giving information
about how many cases your negative generalizations were made from, at what type of higher education
institution you encountered them, and so on. I have not noted any defects of the type you claim
in career skills, and I have known scores of adjuncts, but I would be far more cautious than you
are about generalizing either way. I would go so far as to say that the ones I have known compare
favorably to law students and the many job applicants I worked with as a job-placement specialist
at an employment agency in Manhattan some years ago. I worked as an adjunct myself for some time,
and found few jobs that so hone one's survival skills, in the employment market and elsewhere.
"... Spy Schools: How the CIA, FBI and Foreign Intelligence Secretly Exploit America's Universities ..."
"... The Boston Globe ..."
"... Inside Higher Ed ..."
"... The Wall Street Journal ..."
"... The Price of Admission ..."
"... Inside Higher Ed ..."
"... Inside Higher Ed ..."
"... look back to Stalin, Hitler, Franco, Mao, Mussolini et.al with THIER use of domestic agencies to impose lock-step thinking and to ferret out free-thinkers. ..."
"... It is amazing how many biochemists and microbiologists from the People's Republic of China would e-mail me asking if I had a position in my "lab," touting their bench skills, every time I published a paper on the federal bioterrorism program, medical civic action programs, etc. ..."
"... When I started teaching 48 years ago, the president of my college was James Dovonan, Bill Donovan's (founder of the OSS) brother, portrayed by Tom Hanks in the movie, "Bridge of Spies." ..."
"... Beyond NIH funded grant-based research, Homeland Security, Energy, Defense, and the Intelligence Community agencies have long histories of relationships with American academia. This could be funded research, collaborative research, shared personnel relationships, or all other manner of cooperation. Sometimes it's fairly well known and sometimes it's kept quiet, and sometimes it's even classified. But it is much more extensive and expansive than what Golden describes, and much less "cozy" or suspicious. ..."
"... For years I have said that it is foolish to look to universities for moral guidance, and this story is one more instance. In this case, the moral ground is swampy at best, and the universities do not appear to have spent a lot of time worrying about possible problems as long as the situation works to their advantage financially. ..."
"... Does Golden discuss at all the way in which the CIA and other intelligence services funnel money into academic research without the source of the funding ever being revealed? This was common practice in the 1960s and 1970s, and colleges like MIT were among those involved in this chicanery. ..."
"... Where has IHE been for the past several decades? Read Rosenfeld's book, Subversives..... about the FBI's illegal acts at Berkeley. Or read this, a summary of his book: https://alumni.berkeley.edu... Or read George R. Stewart, The Year of the Oath. ..."
Book documents how foreign and domestic intelligence agencies use
-- and perhaps exploit -- higher education and academe for spy operations.
Foreign and domestic intelligence services spar and spy on one another all across the world.
But it would be naïve to think it's not happening in the lab or classroom as well.
In his new book, Spy Schools: How the CIA, FBI and Foreign Intelligence Secretly Exploit
America's Universities ( Henry Holt and Company ),
investigative journalist Daniel Golden explores the fraught -- and sometimes exploitative --
relationship between higher education and intelligence services, both foreign and domestic.
Chapters explore various case studies of the Central Intelligence Agency and Federal Bureau of
Investigation using the open and collaborative nature of higher education to their advantage,
as well as foreign governments infiltrating the U.S. via education.
"It's pretty widespread, and I'd say it's most prevalent at research universities," Golden,
an editor at ProPublica and an alumnus of The Boston Globe 's "Spotlight" team, told
Inside Higher Ed . "The foreign intelligence services have the interest and the
opportunity to learn cutting-edge, Pentagon-funded or government-funded research."
Golden, who has also covered higher education for The Wall Street Journal ,
previously wrote about
the intersection of wealth and admissions in his 2006 book The Price of Admission
.
Each of the case studies in Spy Schools , which goes on sale Oct. 10, is critical.
One could read the chapters on the Chinese government's interest in U.S. research universities
as hawkish, but then turn to the next chapter on Harvard's relationship with the CIA and read
it as critical of the American intelligence establishment as well.
"People of one political persuasion might focus on [the chapters regarding] foreign
espionage; people of another political persuasion might focus on domestic espionage," Golden
said. "I try to follow where the facts lead."
Perhaps the most prestigious institution Golden examines is Harvard University, probing its
cozy relationship with the CIA. (While Harvard has recently come under scrutiny for its
relationship with the agency after it withdrew an invitation for Chelsea Manning to be a
visiting fellow -- after the agency objected to her appointment -- this book was written before
the Manning incident, which occurred in September.) The university, which has had varying
degrees of closeness and coldness with the CIA over the years, currently allows the agency to
send officers to the midcareer program at the Kennedy School of Government while continuing to
act undercover, with the school's knowledge. When the officers apply -- often with fudged
credentials that are part of their CIA cover -- the university doesn't know they're CIA agents,
but once they're in, Golden writes, Harvard allows them to tell the university that they're
undercover. Their fellow students, however -- often high-profile or soon-to-be-high-profile
actors in the world of international diplomacy -- are kept in the dark.
"Kenneth Moskow is one of a long line of CIA officers who have enrolled undercover at the
Kennedy School, generally with Harvard's knowledge and approval, gaining access to
up-and-comers worldwide," Golden writes. "For four decades the CIA and Harvard have concealed
this practice, which raises larger questions about academic boundaries, the integrity of class
discussions and student interactions, and whether an American university has a responsibility
to accommodate U.S. intelligence."
But the CIA isn't the only intelligence group operating at Harvard. Golden notes Russian
spies have enrolled at the Kennedy School, although without Harvard's knowledge or
cooperation.
When contacted by Inside Higher Ed , Harvard officials didn't deny Golden's
telling, but defended the university's practices while emphasizing the agreement between the
university and the CIA -- which Golden also writes about -- on not using Harvard to conduct CIA
fieldwork.
"Harvard Kennedy School does not knowingly provide false information or 'cover' for any
member of our community from an intelligence agency, nor do we allow members of our community
to carry out intelligence operations at Harvard Kennedy School," Eric Rosenbach, co-director of
the Kennedy School's Belfer Center for Science and International Affairs, said in a
statement.
While Golden said the CIA's involvement on campus raises existential questions about the
purpose and integrity of higher education, Harvard maintained that the Kennedy School was
living up to its mission.
"Our community consists of people from different spheres of public service. We are proud to
train people from the U.S. government and the intelligence community, as well as peace
activists and those who favor more open government," Rosenbach said in his statement. "We train
students from a wide range of foreign countries and foreign governments, including -- among
others -- Israel, U.K., Russia and China. That is consistent with our mission and we are proud
to have that reach."
On the other hand, other countries are interested in exploiting U.S. higher education.
Golden documents the case of Ruopeng Liu, a graduate student at Duke University who siphoned
off U.S.-government-funded research to Chinese researchers. Liu eventually returned to China
and has used some of the research for his Chinese-government-funded start-up ventures.
Golden is comprehensive, interviewing Duke researchers who worked with Liu, as well as
dispatching a freelance journalist in China to interview Liu (he denied wrongdoing, saying his
actions were taken as part of higher education's collaborative norms regarding research
projects). Despite questions that arose while Liu was a student, he received his doctorate in
2009 without any formal questions or pushback from the university. A week before Liu defended
his dissertation, Golden notes that Duke officials voted to move forward in negotiations with
the Chinese government regarding opening a Duke campus in China -- raising questions about
whether Duke was cautious about punishing a Chinese student lest there were negative business
implications for Duke. (
The building of the campus proved to be a controversial move in its own right. )
The Duke professor Liu worked under told Golden it would be hard to prove Liu acted with
intentional malice rather than out of genuine cultural and translational obstacles, or ethical
slips made by a novice researcher. Duke officials told Inside Higher Ed that there
weren't any connections between Liu and the vote.
"The awarding of Ruopeng Liu's degree had absolutely no connection to the deliberations over
the proposal for Duke to participate in the founding of a new university in Kunshan, China," a
spokesman said in an email.
These are just two chapters of Golden's book, which also goes on to document the foreign
exchange relationship between Marietta College, in Ohio, and the controversial
Chinese-intelligence-aligned University of International Relations. Agreements between Marietta
and UIR, which is widely regarded a recruiting ground for Chinese intelligence services,
include exchanging professors and sending Chinese students to Marietta. Conversely, Golden
writes, as American professors teach UIR students who could end up spying on the U.S., American
students at Marietta are advised against studying abroad at UIR if they have an interest in
working for the government -- studying at UIR carries a risk for students hoping to get certain
security clearances. Another highlight is the chapter documenting the CIA's efforts to stage
phony international academic conferences, put on to lure Iranian nuclear scientists as
attendees and get them out of their country -- and in a position to defect to the U.S.
According to Golden's sources, the operations, combined with other efforts, have been
successful enough "to hinder Iran's nuclear weapons program."
But Golden's book doesn't just shed light on previously untold stories. It also highlights
the existential questions facing higher education, not only when dealing with infiltration from
foreign governments, but also those brought on by cozy relationships between the U.S.
intelligence and academe.
"One issue is American national security," Golden said. "Universities do a lot of research
that's important to our government and our military, and they don't take very strong
precautions against it being stolen," he said. "So the domestic espionage side -- I'm kind of a
traditionalist and I believe in the ideal of universities as places where the brightest minds
of all countries come together to learn, teach each other, study and do research. Espionage
from both sides taints that that's kind of disturbing."
After diving deep into the complex web that ties higher education and espionage together,
however, Golden remains optimistic about the future.
"It wouldn't be that hard to tighten up the intellectual property rules and have written
collaboration agreements and have more courses about intellectual safeguards," he said. "In the
1970s, Harvard adopted guidelines against U.S. intelligence trying to recruit foreign students
in an undercover way they didn't become standard practice [across academe, but], I still think
those guidelines are pertinent and colleges would do well to take a second look at them."
"In the idealistic dreamer mode, it would be wonderful if the U.N. or some other
organization would take a look at this issue, and say, 'Can we declare universities off-limits
to espionage?'"
Equating the presence and activities of US intelligence on campuses with that of foreign
intelligence is pretty obtuse moral relativism. US academia and US intelligence alike benefit
from cooperation, and the American people are the winners overall. By the way, is it really
necessary to twice describe this relationship as "cozy"? What does that mean, other to
suggest there's something illicit about it?
It'd be nice if American intelligence was paying a bit more attention to
what goes on in academic research--as far as I can tell, the country
keeps making policies that don't seem particularly well-informed by the
research in relevant areas. Can we get them to infiltrate more labs of
scientists working on climate change or something?
Maybe stick around, engage in some
participant observation and figure that research out? It's not clear they
have any acquaintance with the literature on the causes of war. Really,
pick a place to start, and pay attention.
If you cannot see how a gov't intelligence agency, prohibited from working in the USA by
statute and who is eye-deep in AMERICAN education is wrong, then I am worried. Read history.
Look back to the 1970's to start and to the 1950's with FBI and the military agents in
classrooms; then read about HUAC.
Now, look back to Stalin, Hitler, Franco, Mao, Mussolini
et.al
with THIER use of domestic agencies to impose lock-step thinking and to ferret out
free-thinkers.
Actually, I read quite a bit of history. I also know that US intelligence agencies are not
"prohibited from working in the USA." If they have relationships in academia that remind you
of Stalin, Hitler, etc., how have US agencies "imposed lock-step thinking and ferreted out
free-thinkers?" Hasn't seemed to work, has it? Your concern is overwrought.
"Cozy" might refer to the mutual gains afforded by allowing the federal government to
break many rules (and laws) while conducting their "intelligence operations" in academe. I do
not know if I felt Homeland Security should have had permission to bring to this country,
under false premises supported by ICE and accrediting agencies, thousands of foreign
nationals and employed them at companies like Facebook, Apple, Morgan Stanley and the U.S.
Army. While Homeland Security collected 16K tuition from each of them (and the companies that
hired these F-1s didn't have to pay FICA) all our nation got was arrests of 20 mid level visa
brokers.
Personally, I think cozy was quite complimentary as I would have chosen other words. Just
imagine if there are additional "undercover students" with false credentials in numbers
significant enough to throw off data or stopping universities and colleges from enforcing
rules and regulations. If you set up and accredit a "fake university" and keep the proceeds,
it strikes me as illicit.
And behaving as if the "the presence and activities of US intelligence on campuses" is
something to accept without question is also "obtuse moral relativism". We are talking about
an arrangement wherein a / the most prestigious institutions of higher learning has an
established relationship with the CIA along with some accepted protocol to ongoing
participation.
Whether it is right, wrong, or in between is another matter but please don't
pretend that it's just business as usual and not worthy of deeper investigation.
It is amazing how many biochemists and microbiologists from the People's Republic of China
would e-mail me asking if I had a position in my "lab," touting their bench skills, every
time I published a paper on the federal bioterrorism program, medical civic action programs,
etc.
Never mind that I primarily do health policy and economics work, and have not been near
a lab bench since I returned to school for my doctorate.....anything with a defense or
security application drew a flurry of interest in getting involved.
As a result, I tended to
be very discerning in who I took on as an advisee, if only to protect my security
clearance.
PAr for the course for both UG and grad students from China who have not paid a head
hunter. ANY school or program offering money to international students was flooded by such
inquiries. Get over yourself.
When I started teaching 48 years ago, the president of my college was James Dovonan, Bill
Donovan's (founder of the OSS) brother, portrayed by Tom Hanks in the movie, "Bridge of
Spies."
We had a program in "Tropical Architecture" which enrolled students form "third world"
countries. Rumor was -- --
When I got my Ph.D. from Harvard in 1968, the Shah of Iran got an honorary doctorate at
the same commencement. The next year, by pure coincidence!, he endowed three chairs of Near
Eastern Studies at H.U.
So glad to see they're on campus. Many young people now occupy the CIA; the old "cowboys"
of the Cold War past are gone. U may find this interesting>>
http://osintdaily.blogspot....
Hundreds of government civil servants attend courses at the Kennedy School every year.
That a few of them come from the CIA should be no surprise. It and all the other intelligence
agencies are nothing more than departments within the federal government, just like Veterans
Affairs, Health and Human Services, the FDA, Energy, and so on. Nothing sneaky or suspicious
about any of it. Why anyone with cover credentials would tell the Kennedy School admin that
is beyond me. When I was in cover status, I was in cover status everywhere; to not be was to
blow your cover, period, and was extremely dangerous.
Beyond NIH funded grant-based research, Homeland Security, Energy, Defense, and the
Intelligence Community agencies have long histories of relationships with American academia.
This could be funded research, collaborative research, shared personnel relationships, or all
other manner of cooperation. Sometimes it's fairly well known and sometimes it's kept quiet,
and sometimes it's even classified. But it is much more extensive and expansive than what
Golden describes, and much less "cozy" or suspicious.
For years I have said that it is foolish to look to universities for moral guidance, and
this story is one more instance. In this case, the moral ground is swampy at best, and the
universities do not appear to have spent a lot of time worrying about possible problems as
long as the situation works to their advantage financially.
The key, here, is financially. The bean counters and those whose research is funded don't
look hard at the source of the funding. Just so it keeps coming.
Does Golden discuss at all the way in which the CIA and other intelligence services funnel
money into academic research without the source of the funding ever being revealed? This was
common practice in the 1960s and 1970s, and colleges like MIT were among those involved in
this chicanery.
Remember also how intelligence agency money was behind the journal Encounter?
Lots of propaganda got distributed under the guise of objective social science research.
Where has IHE been for the past several decades? Read Rosenfeld's book, Subversives.....
about the FBI's illegal acts at Berkeley. Or read this, a summary of his book:
https://alumni.berkeley.edu... Or read George R. Stewart, The Year of the Oath.
In the
research for my biography of Stewart I found significant information about CIA presence on
the UC Berkeley campus, in the mid-twentieth century, which reached in to the highest levels
of the administration and led to a network of "professors" recruited by that unAmerican spy
agency.
The oaths, the current gender wars and the conviction by accusation of harassment are
all later attempts to politicize education and turn fiat lux into fiat nox. IHE should be
writing more about that and about the current conviction by sexual accusation, and the effect
of such on free thought and free inquiry.
Yves here. On the one hand, as someone who is getting to be pretty long in
tooth, I'm not sure about calling un and under-employed older workers
"spare". But when the alternative is being thrown on the trash heap, maybe
that isn't so unflattering.
Even though this analysis is from Australia,
most of if not all of its finding would almost certainly prove out in the
US. However, there is a whole 'nother set of issues here. Australia is 85%
urban, with most of the population living in or near four large cities. So
its labor mobility issues are less pronounced than here. Moreover, a lot of
the whinging in the US about worker shortages, as even readers of the Wall
Street Journal regularly point out in its comment section is:
1. Not being willing to pay enough to skilled workers, which includes
not being willing to pay them to relocate
2. Not being willing to train less skilled workers, as companies once
did as a matter of course
A few weeks back, the Benevolent Society
released a report
which found that age-related discrimination is
particularly rife in the workplace, with over a quarter (29%) of survey
respondents stating they had been turned down for a job because of their old
age, whereas 14% claimed they had been denied a promotion because of their
old age.
Today, the Regional Australia Institute (RAI) has warned that Australia
is facing a pension crisis unless employers stop their "discrimination"
against older workers. From
The ABC
:
[RAI] has warned the Federal Government's pension bill would rise from
$45 billion to $51 billion within three years, unless efforts were made
to help more mature workers gain employment, particularly in regional
communities.
Chief executive Jack Archer said continued unemployment of people
older than 55 would cut economic growth and put a greater strain on
public resources.
"We hear that there is a lot of people who would like to work, who
would love to stay in the workforce either part-time or full-time even
though they're in their late 50s, 60s and even into their 70s," he said.
"But we're not doing a very good job of giving them the training,
giving them the incentives around the pension, and working with employers
to stop the discrimination around employing older workers"
"It basically means you've got a lot of talent on the bench, a lot of
people who could be involved and contributing who are sitting around
homes and wishing they were doing something else," he said
Mr Archer said as the population aged the workforce shrank, and that
risked future economic growth.
But he said that could be reversed provided employers embraced an
older workforce
"[When] those people are earning [an income], their pension bills will
either disappear or be much lower and the government will get a benefit
from that."
For years the growth lobby and the government has told us that Australia
needs to run high levels of immigration in order to alleviate so-called
'skills shortages' and to mitigate an ageing population. This has come
despite the Department of Employment
showing
that Australia's skills shortage
"remains low by historical
standards"
and Australia's labour underutilisation rate tracking at
high levels:
Economic models are often cited as proof that a strong immigration
program is 'good' for the economy because they show that real GDP per capita
is moderately increased via immigration, based on several dubious
assumptions.
The most dubious of these assumptions is that population ageing will
necessarily result in fewer people working, which will subtract from per
capita GDP (due to the ratio of workers to dependents falling).
Leaving aside the fact that the assumed benefit to GDP per capita from
immigration is only transitory, since migrants also age (thereby requiring
an ever-bigger immigration intake to keep the population age profile from
rising), it is just as likely that age-specific workforce participation will
respond to labour demand, resulting in fewer people being unemployed. This
is exactly what has transpired in Japan where an ageing population has
driven the unemployment rate down to only 2.8% – the lowest level since the
early-1990s:
The ABS
last month
revealed
that more Australians are working past traditional retirement
age, thereby mitigating concerns that population ageing will necessarily
reduce the employment-to-population ratio:
Clearly, however, there is much further scope to boost workforce
participation among older workers.
Rather than relying on mass immigration to fill phantom 'labour
shortages' – in turn displacing both young and older workers alike – the
more sensible policy option is to moderate immigration and instead better
utilise the existing workforce as well as use automation to overcome any
loss of workers as the population ages – as has been
utilised in Japan.
It's worth once again highlighting that
economists at MIT
recently found that there is absolutely no
relationship between population ageing and economic decline. To the
contrary, population ageing seems to have been associated with improvements
in GDP per capita, thanks to increased automation:
If
anything, countries experiencing more rapid aging have grown more in
recent decades we show that since the early 1990s or 2000s, the periods
commonly viewed as the beginning of the adverse effects of aging in much
of the advanced world, there is no negative association between aging and
lower GDP per capita on the contrary, the relationship is significantly
positive in many specifications.
The last thing that Australia should be doing is running a mass
immigration program which, as
noted many times
by the Productivity Commission cannot provide a
long-term solution to ageing, and places increasing strains on
infrastructure, housing and the natural environment.
The sustainable 'solution' to population ageing is to better utilise the
existing workforce, where significant spare capacity exists.
At what point might an impatient constituency demand greater
accountability by its elected representatives? In the business world, the
post-2000 accounting scandals like Enron resulted in legislation to make
company execs sign off on financial statements under threat of harsh
personal penalties for misrepresentation. If legislators were forced by
constituents to enact similar legislation about their own actions, the
transparency could be very enlightening and a type of risk reduction due to
acknowledgement of material factors. Imagine seeing in print the real
reasons for votes, the funding sources behind those votes and prospect of
jail time for misrepresentation about what is just their damn job. Call it
Truth-In-Legislating, similar to the prior Truth-In-Lending act.
It's a nice idea, but I don't think that very many executives have
been penalized under the Sarbanes Oxley Act. Jamie Dimon certainly wasn't
penalized for the actions of the London Whale. I guess we'll see what
happens in the near future to the executives of Wells Fargo. I suspect
that a Truth-In-Legislating law would be filled with loopholes or would
be hampered by enforcement failures, like current Congressional ethics
rules and the Sarbanes Oxley Act.
At what point might an impatient constituency demand greater
accountability by its elected representatives?
At that point when they start shooting them (as they did in Russian in
the very early 1900s, or lop their heads off, as they once did in
France).
Personally, I'll never work for any Ameritard corporation ever again,
as real innovation is not allowed, and the vast majority are all about
financialization in some form or other!
My work life the past thirty years became worse and worse and worse,
in direct relation to the majority of others, and my last jobs were
beyond commenting up.
My very last position, which was in no manner related to my
experience, education, skill set and talents -- like too many other
American workers -- ended with a most tortuous layoff: the private equity
firm which was owner in a failed "pump and dump" brought a "toxic work
environment specialist" whose job was to advise the sleazoid senior
executives (and by that time I was probably one of only four actual
employee workers there, they had hired a whole bunch of executives,
though) on how to create a negative work environment to convince us to
leave instead of merely laying us off (worked for two, but not the last
lady there I myself).
The American workplace sucks big time as evidenced by their refusal to
raise wages while forever complaining about their inability to find
skilled employees -- they are all criminals today!
I lived and worked in Australia in the late '70s and early '80s. Times
were different. Back then, the government jobs came with mandatory
retirement. I believe (but could be wrong) that it was at 63, but you could
request staying until 65 (required approval). After that, one could continue
working in the private sector, if you could find a job.
The population was much less than it is now. I believe the idea was to
make room for the younger generation coming up. Back then, government
workers, as well as many private sector workers, had defined benefit pension
plans. So retiring younger typically worked out ok.
I had one friend who continued working until about 70 because she wanted
to; liked her job; and wasn't interested in retiring. However, I knew far
more people who were eager to stop at 63. But back then, it appeared to me
that they had the financial means to do so without much worry.
Things have changed since then. More of my friends are putting off
retirement bc they need the money now. Plus defined benefit pension plans
have mostly been dispensed with and replaced by, I believe (I'm not totally
clear on this), the Aussie version of a 401 (k) (someone can correct me if
I'm wrong).
What the article proposes makes sense. Of course here in the USA, older
workers/job seekers face a host of discriminatory practices, especially for
the better paying jobs. Nowadays, though, US citizens in their golden years
can sell their house, buy an RV, and become itinerant workers – sometimes at
back breaking labor, such as harvesting crops or working at an Amazon gulag
– for $10 an hour. Yippee kay-o kay-aaay!
So let us also talk about cutting Medicare for all of those lazy slacker
Seniors out there. Woo hoo!
There is really two issues:
1) for those whom age discrimination in employment is hitting in their
50s or even younger, before anyone much is retiring, it needs to be
combatted
2) eventually (sometimes in their 60's and really should be at least by
65) people ought to be allowed to retire and with enough money to not be
in poverty. This work full time until you drop garbage is just that (it's
not as if 70 year olds can even say work 20 hours instead, no it's the
same 50+ hours or whatever as everyone else is doing). And most people
won't live that much longer, really they won't, U.S. average lifespans
aren't that long and falling fast. So it really is work until you die
that is being pushed if people aren't allowed to retire sometime in their
60s. Some people have good genes and good luck and so on (they may also
have a healthy lifestyle but sheer luck plays a large role), and will
live far beyond that, but averages
Working past 65 is one of those things where it just depends. I
know people who are happily (and don't "really" need the money)
working past 65 bc they love their jobs and they're not taking a toll
on their health. They enjoy the socialization at work; are
intellectually stimulated; and are quite happy. That's one issue.
But when people HAVE TO work past 65 – and I know quite a few in
this category – when it starts taking a toll on their health, that is
truly bad. And I can reel off several cases that I know of personally.
It's just wrong.
Whether you live much longer or not is sort of up to fate, no
matter what. But yes, if work is taking a toll on your heath, then you
most likely won't live as long.
In January, economists from MIT published a paper, entitled Secular
Stagnation? The Effect of Aging on Economic Growth in the Age of
Automation, which showed that there is absolutely no relationship between
population aging and economic decline. To the contrary, population aging
seems to have been associated with improvements in GDP per capita, thanks
to increased automation:
From the cited article.
I don't know why it never occurred to me before, but there's no reason to
ditch your most knowledgeable, most skilled workers toward the eve of their
careers except if you don't want to pay labor costs. Which we know that
most firms do not, in their mission for profit for shareholders or the
flashy new building or trying to
Innuhvate
.
There's a myth that innovation comes from the 20 something in their
basement, but that's just not the case. Someone who has, for instance,
overseen 100 construction projects building bridges needs to be retained,
not let go. Maybe they can't lift the sledge anymore, but I'd keep them on
as long as possible.
1. Not being willing to pay enough to skilled workers, which includes not
being willing to pay them to relocate
2. Not being willing to train less skilled workers, as companies once did
as a matter of course
3.
older workers have seen all the crap and evil management has
done, and is usually in a much better position than young less established
employees to take effective action against it
This. Don't expect rational actors, in management or labor. If
everyone was paid the same, regardless of age or training or education or
experience etc then the financial incentives for variant outcomes would
decrease. Except for higher health costs for older workers. For them, we
could simply ban employer provide health insurance then that takes that
variable out of the equation too. So yes, the ideal is a rational Marxism
or the uniformity of the hive-mind-feminism. While we would have "from
each according to their ability, to each according to their need" we will
have added it as an axiom that all have the same need. And a whip can
encourage the hoi polloi to do their very best.
Fully agee! To your list I would add a corollory to your item #3 --
older workers having seen all the crap and evil management has done are
more likely to inspire other employees to feel and act with them. -- This
corollory is obvious but I think it bears stating for emphasis of the
point.
I believe your whole list might be viewed as symtoms resulting from
the concept of workers as commodity -- fungible as cogs on a wheel. Young
and old alike are dehumanized.
The boss of the branch office of the firm I last worked for before I
retired constantly emphasized how each of us must remain "fungible" [he's
who introduced me to this word] if we wanted to remain employed. The firm
would win contracts using one set of workers in its bids and slowly
replace them with new workers providing the firm a higher return per hour
billed to the client. I feel very lucky I managed to remain employed -- to
within a couple of years of the age when I could apply for Medicare.
[Maybe it's because I was too cowed to make waves and avoided raises as
best I could.]
[I started my comment considering the idea of "human capital" but ran
into trouble with that concept. Shouldn't capital be assessed in terms of
its replacement costs and its capacity for generating product or other
gain? I had trouble working that calculus into the way firms treat their
employees and decided "commodity" rather than "capital" better fit how
workers were regarded and treated.]
"skills vs. demand imbalance" not labor shortage. Capital wants to tip
the scale the other way, but isn't willing to invest the money to train the
people, per a comment I made last week. Plenty of unemployed or
under-employed even in Japan, much less Oz.
Keeping the elderly, who already have the skills, in the work place
longer is a way to put off making the investments. Getting government to tax
the poor for their own training is another method. Exploiting poor nations
education systems by importing skills yet another.
Some business hope to develop skills that only costs motive power
(electric), minimal maintenance, and are far less capital intensive and
quicker to the market than the current primary source's 18 years. Capitalism
on an finite resource will eat itself, but even capitalism with finite
resources will self-destruct in the end.
Importantly, the chart labeled as Figure 2 uses GDP
per capita
on
the y-axis.
Bearing in mind that GDP growth is composed of labor force growth times
productivity, emerging economies that are growing faster than the rich world
in both population and GDP look more anemic on a per capita basis, allowing
us rich country denizens to feel better about our good selves. :-)
But in terms of absolute GDP growth, things ain't so bright here in the
Homeland. Both population and productivity growth are slowing. Over the past
two-thirds century, the trend in GDP groaf is relentlessly down, even as
debt rises in an apparent attempt to maintain unsustainable living
standards. Chart (viewer discretion advised):
Van Onselen doesn't address the rich world's busted pension systems. To
the extent that they contain a Ponzi element premised on endless growth,
immigration would modestly benefit them by adding new
victims
workers to support the greying masses of doddering Boomers.
Will you still need me
Will you still feed me
When I'm sixty-four?
There's been an increase in the employment of older people in the U.S. in
the U.S. population. To provide a snapshot, below are three tables referring
to the U.S. by age cohorts of 1) the total population, 2) Employment and 3)
employment-population ratios (percent).based on Bureau of Labor Statistics
weightings for population estimates and compiled in the Merge Outgoing
Rotation Groups (MORG) dataset by the National Bureau of Economic Research
(NBER) from the monthly Current Population Survey (CPS).
The portion of the population 16 to 54 has declined while those over 54
has increased.
1. Percent Population in Age Cohorts: 1986 & 2016
1986 2016 AGE
18.9 15.2 16-24
53.7 49.6 25-54
12.2 16.3 55-64
9.4 11.2 65-74
5.8 7.7 75 & OVER
100.0 100.0 ALL
The portion of the population 16 to 54 employed has declined while the
portion over 54 has increased..
2 Percent Employed in Age Cohorts: 1986 & 2016
1986 2016 AGE
18.5 12.5 16-24
68.4 64.7 25-54
10.4 16.9 55-64
2.3 4.8 65-74
0.4 1.0 75 & OVER
100.0 100.0 ALL
The employment-population ratios (percents) show significant declines for
those under 25 while increases for those 55 and above.
3. Age-Specific Employment Population Ratios (Percents)
1986 2016 AGE
59.5 49.4 16-24
77.3 77.9 25-54
51.8 61.8 55-64
14.8 25.9 65-74
3.8 7.9 75 & OVER
60.7 59.7 ALL
None of the above data refute claims about age and experience inequities.
Rather these provide a base from which to explore such concerns. Because
MORG data are representative samples with population weightings, systematic
contingency analyses are challenging.
In the 30 year interval of these data there have been changes in
population and employment by education status, gender, race, citizenship
status along with industry and occupation, all items of which are found in
the publicly available MORG dataset.
I think you are missing the point. Life expectancy at birth has
increased by nearly five years since 1986. That renders simple
comparisons of labor force participation less meaningful. The implication
is that many people are not just living longer but are in better shape in
their later middle age. Look at the dramatic drop in labor force
participation from the 25-54 age cohort v. 55 to 64. How can so few
people in that age group be working given that even retiring at 65 is
something most people cannot afford? And the increase over time in the
current 55=64 age cohort is significantly due to the entry of women into
the workplace. Mine was the first generation where that became
widespread.
The increase in the over 65 cohort reflects desperation. Anyone who
can work stays working.
Even if life-expectancy is increasing due to improved health, the
percentage of those in older cohorts who are working is increasing at
an even faster rate. If a ratio is 6/8 for a category and goes up to
10/12 the category has increased (8 to 12 or 50%) and the subcategory
has increased (6 to 10 i or 67% and the ratios go from 6/8 or 75/100
to 10/12 or 83.3/100)
I assume you are referencing the employment-population (E/P) ratio
when noting "the dramatic drop in labor force participation from the
25-54 age cohort v. 55 to 64." However the change in the E/P ratio for
25-54 year olds was virtually unchanged (77.3/100 in 1986 to 77.9/100
in 2016) and for the 55-64 year olds the E/P ratio INCREASED
significantly, from 51.8/100 in 1986 to 61.8/100 in 2016.
You query: "How can so few people in that age group be working
given that even retiring at 65 is something most people cannot
afford?" That's a set of concerns the data I've compiled cannot and
thus cannot address. It would take more time to see if an empirical
answer could be constructed, something that doesn't lend itself to
making a timely, empirically based comment. The data I compiled was
done after reading the original post.
You note: ". . . ;;[T] the increase over time in the current 55-64
age cohort is significantly due to the entry of women into the
workplace." Again, I didn't compute the age-gender specific E/P
ratios. I can do that if there's interest. The OVERALL female E/P
ratio (from FRED) did not significantly increase from December 1986 (
51.7/100) to December 2016 (53.8/100).
Your write: "The increase in the over 65 cohort reflects
desperation. Anyone who can work stays working." Again, the data I was
using provided me no basis for this interpretation. I suspect that the
MORG data can provide some support for that interpretation. However,
based on your comments about longer life expectancy, it's likely that
a higher proportion of those in professional-middle class or in the
upper-middle class category Richard Reeves writes about (Dream
Hoarders) were able and willing to continue working. For a time in
higher education some institutions offered incentives for older
faculty to continue working thereby they could continue to receive a
salary and upon becoming eligible for Social Security draw on that
benefit. No doubt many, many vulnerable older people, including
workers laid off in the wake of the Great Recession and otherwise
burdened lengthened their or sought employment.
Again the MORG data can get somewhat closer to your concerns and
interests, but whether this is the forum is a challenge given the
reporting-comment cycle which guides this excellent site.
I don't understand how the media promotes the "society is aging, we need
more immigrants to avoid a labor shortage" argument and the "there will be
no jobs in the near future due to automation, there will be a jobs shortage"
argument at the same time. Dean Baker has discussed this issue:
In any event, helping to keep older workers in the workforce can be a
good thing. Some people become physically inactive after retirement and
their social networks decline which can cause depression and loneliness.
Work might benefit some people who would otherwise sink into inactivity and
loneliness.
Of course, results might vary based on individual differences and those
who engaged in hard physical labor will likely have to retire earlier due to
wear and tear on their bodies.
Increase in life expectancy is greatly influenced by a decrease in
childhood mortality. People are living longer because they aren't dying
in large numbers in childhood anymore in the US. So many arguments that
start out "we're living longer, so something" confuse a reduction in
childhood mortality with how long one can expect to live to in old age,
based on the actuarial charts. Pols who want to cut SS or increase the
retirement age find this confusion very useful.
"
Life expectancy at birth is very sensitive to reductions in the
death rates of children, because each child that survives adds many years
to the amount of life in the population. Thus, the dramatic declines in
infant and child mortality in the twentieth century were accompanied by
equally stunning increases in life expectancy.
"
I've noticed ever since the 1990s that "labor shortage" is a signal for
cost-cutting measures that trigger a recession. Which then becomes the
excuse for shedding workers and really getting the recession on.
It is not just older workers who are spare. There are other forms of
discrimination that could fall by the wayside if solving the "labor
shortage" was the sincere objective.
Often productively, sales, and profits decrease with those cost
cuttings, which justified further cuts which decreases productivity,
sales, and profits which justifies
It's a pattern I first noticed in the 1990s and looking back in the
80s too. It's like some malevolent MBAs went out and convinced the whole
of American middle and senior business management that this was the Way
to do it. It's like something out of the most hidebound, nonsensical
ideas of Maoism and Stalinism as something that could not fail but only
be failed. It is right out of the Chicago Boys' economics playbook.
Thirty-five years later and the Way still hasn't succeeded, but they're
still trying not to fail it.
Love your reflections. Yeah, it's like a religion that they can't
pay more, can't train, must cut people till they are working to their
max at ordinary times (so have no slack for crises), etc. etc., and
that it doesn't work doesn't change the faith in it AT ALL.
This is ranting, but most jobs can be done at most ages. If want someone
to be a SEAL or do 12 hours at farm labor no of course not, but just about
everything else so what's the problem?
All this "we have a skilled labor shortage" or "we have a labor surplus"
or "the workers are all lazy/stupid" narratives" and "it's the unions'
fault" and "the market solves everything" and the implicit "we are a true
meritocracy and the losers are waste who deserve their pain" and my favorite
of the "Job creators do make jobs" being said, and/or believed all at the
same time is insanity made mainstream.
Sometimes I think whoever is running things are told they have to drink
the Draught of UnWisdom before becoming the elites.
So I'm a middle aged fella – early thirties – and have to admit that in
my industry I find that most older workers are a disaster. I'm in tech and
frankly find that most older workers are a detriment simply from being out
of date. While I sympathize, in some cases experience can be a minus rather
than a plus. The willingness to try new things and stay current with modern
technologies/techniques just isn't there for the majority of tech workers
that are over the hill.
"... Indeed; smart, intelligent, "clever" folks in no way confers any degree of civility on their "vested" interests. Manipulation and control are suitably useful tools for their purposes. ..."
"... The media is not a major player in running the country, contrary to what much of the right has been brainwashed to believe. It's a tool of the elite. A hammer is also a very useful tool but it doesn't do much to determine what the carpenter builds. ..."
"... We convinced ourselves that our form of oligarchy was somehow "better" than other forms, when in fact, the end game was always the same..concentrating the power in as few hands as possible. Denial was the name of the game here in the US. ..."
"... They learned their lessons well after the 60's, the last time the people really raised up against the machine, so they have given us all the; junk food at a low cost, all the TV and mindless sexually charged entertainment, all the "debt wealth", a simple minded, unread, semi-literate, beer swilling fool could ever ask for. And we all gladly gobble it up and follow the crowd, for who wants to be on the outside looking in... ..."
"... There is always a ruling elite because power is the wellspring of all human actions. There is also a certain moral consciousness that many people argue is innate in human nature, and that consciousness is fairness. The fairness instinct survives where ordinary human sympathy may fail. Based upon this basic morality of fairness those of us who are willing to take risks in the interest of fairness need to prune and tend the ruling elites as soon as possible. We proles need to act together. ..."
"... Waiting for the oligarchy to rot from within isn't what i would call a viable plan. Not when there is a far better and far more sure way to get the job done. Start with capping wealth accumulation. ..."
"... With all the upheaval in today's politics, it's hard not to think that this moment is one in which the future of the political system might be more up for grabs than it has been in generations. ..."
"... Dominance of oligarchic political power, through neoliberalism, over the last four decades has effectively put such policies out of bounds. ..."
"... The last one I recall was an article by Kenan Malik on identity politics . For what exists in this country, the UK, I have previously used the term "oligarchy by profession" ... meaning a pool of the usually upper half of the middle class, or a group in whom that group is disproportionally represented, who not only likely have a select education but who go on to become part of certain professions - accountants, lawyers, journalists, bankers, doctors etc. ... and of course, politicians tend to be drawn from these. ..."
"... Apparently we're so distracted that we're also all genuinely shocked that Hollywood is rife with pedophilia and extreme sexual harassment as though it's some revelation that we didn't know already, but that's another conversation. ..."
"... If we're all so distracted then it's not difficult for our political 'representatives' -- I use that word very tentatively because they barely ever do -- to subject themselves to the oligarchs for a few scraps more than we have ourselves. ..."
"... Limiting govt still leaves economic power and the tendency towards monopoly untouched. ..."
"... Culture is the key, much more than any genetic impulse, which is practically meaningless and so explains nothing. ..."
"... As wealth defense is so important to oligarchs, there is a constant pressure to cheat and break the law. One solution therefore is to apply the law but also to construct legislation with specific principles in mind. If the point of tax legislation is to contribute your share towards the general good then those who avoid and evade tax would be guilty of a technical breach but also a breach of the principle. ..."
"... However our laws are skewed to allowing the wealthy to defend their wealth and so a party of the people is always needed. Always. ..."
Nothing new here, C Wright Mills, the US state as a plutocracy , government by the few , said
it all fifty years ago , especially the economic oligarchs
I would again point to Plato. Those whose affluence exceeds the critical threshold stagnate.
They have no need to work, no need to hold anything as valuable, they contribute nothing and
take everything.
What is the point in being so rich? There's nothing you can gain from it, other than bank
account pinball.
The purpose of being rich is to enable you. It is the only purpose. Once you are fully
enabled, money has no value.
Those who are poor can't afford the tools to work well, the education/training needed,
anything by which they could better themselves and be upwardly mobile.
There are some who are poor by choice. Voluntary hermits are common enough. They're not
included in here because they're self-sufficient and have the tools they need so fall out of
scope.
The middle band, where prone work the best, function the best, are mentally and physically
the best, is very very big. Nothing stops you cramming society into there because they've
plenty of room to stretch out.
But people always want to improve. No big. Make tax follow a curve, so that you always
improve but the game gets harder not easier. Would you play a computer game where level 100
was easier than level 1? No, you'd find it boring. As long as it's a single curve, nobody
gets penalized.
You now get to play forever, level billion is better than level million is better than
level thousand, but it's asymptotic so infinite improvement never breaks outside the
bounds.
"Asymptotic" is a word that meets your objection AND my rebuttal. You do not have to have
either a constant, infinity or hard ceilings. Leave straight lines to geometers and enter the
world of inflection points.
Elites exist the world over -- East, West, North and South. Question is how do we create a
world where power is shared -- Plato and his Guardians perhaps or are we doomed to be ruled by
elites until the end of time?
Indeed; smart, intelligent, "clever" folks in no way confers any degree of civility on their
"vested" interests. Manipulation and control are suitably useful tools for their purposes.
Yet most of the media is resolutely "liberal" or leftist How do you explain that?
The media is not a major player in running the country, contrary to what much of the right
has been brainwashed to believe. It's a tool of the elite. A hammer is also a very useful
tool but it doesn't do much to determine what the carpenter builds.
Rapid is still quite right...
We convinced ourselves that our form of oligarchy was somehow "better" than other forms, when
in fact, the end game was always the same..concentrating the power in as few hands as
possible. Denial was the name of the game here in the US.
jessthecrip's comment was clearly not calling for JRM to be imprisoned or in any way punished
for his views , but for his votes . Specifically his votes in the House of
commons to support benefit cuts for disability claimants. Admittedly that a pretty extreme
position from my point of view, but nonetheless you are misrepresentating what was said,
whether deliberately or because you genuinely have not understood only you can know
More people should simply look up from time to time and quit living in fantasy books.
The whole and real truth is not written in a book its all around you if you are willing to
except what you see.
Form a government in same way we select juries. No entrenchment of the same old guard, no
lobbyists,no elite, no vested interests.Just people like you,and you.People like your
children.People like your parents.People like your neighbors
Not really driven by the oligarch, more looted. And there's normally 1 greedy bugger, Sulla
or Pompey, who has to have it all and upsets the apple cart, and then you get Augustus.
The US and it being a democracy, the word that is no where mentioned in the Constitution is
one big hoax and the perpetuation of the same, where the missed people in this country are
further conned by the elite and the rich. Then on top of it all we f or sure not practice
what we preach. To that end our political system with two senators from each of 50 states m
irrespective to the population is lot to be desired in terms of any real democratic process,
let alone equality in representation. To add insult to injury, the US House of
Representatives where Congressional Districts are gerrymandered just about every two years,
is even worst. Just as the US Congress in which over 90% of the people have no confidence.
Yet most of the media is resolutely "liberal" or leftist How do you explain that?
Liberal MSM has been emasculated. It doesn't know it's dead. It doesn't move any needles.
It just brays on in ineffective anti-Trump outrage and one identity politics issue after
another.
The House of Lords in the U.K. and the Senate in the US were originally there to prevent poor
people - always the majority - from voting to take away wealth and lands from the rich.
Basically, if such a vote was cast, the HoL and Senate - filled with the elites of society -
had the power to block it.
This is a fascinating dissection of how the "leftist/liberal" media was completely disrupted
by Trump. It is a long read and quite difficult (so not likely to appeal to most of the
knee-jerk commentators) but, whatever your politics it is well worth a look https://www.theatlantic.com/technology/archive/2017/10/what-facebook-did/542502
/
The human (and probably animal) world is made up of oligarchies that deal with each other.
History has shown that only lone soldiers can upset established orders: Alexander, Napoleon,
Lenin, Castro and Bin Laden come to mind.
I agree with the article's premise. We have allowed the oligarchs to consolidate power.
Why? Because Americans revere wealth and power. We have bought into the capitalist model
hook, line, and sinker. We willingly elect candidates and sign on to policies that allow
oligarchs to consolidate their power, increase their wealth and income inequality, pomote
greed and selfishness, and undermine democracy - the power of the people.
We have been busy electing agents of oligarchy to Congress since 1980. Buying ino the
"small government" con, the "taxes are theft" con, "the business is overregulated" con, the
"corporations are the job creators" con and its twin the "government never created jobs" con,
the anti-union con, etc, etc, etc.
Our political system would be a lot more representative of the people if the people would
get off their butts and start participating in it. Our electoral ststem is open to anyone who
wants to participate.
But who and how many participate any more?
When the people create a vacuum with their apathy and cynicism, the oligarchs fill it with
their greed.
Oligarchs will always be attracted to power, no matter what system is in place. What's
needed to minimize their ability to entrench themselves is vigilance in defending our
institutions against corruption.
And vigilance is something that the American people seem to have less and less of every
day.
Maximise aggregate happiness as John Nash suggested. Cooperation beats competition in
almost every sphere. Uniting the 99% will happen after the 1% have brought civilisation to a
standstill and a billion people starve.
Denial is a powerful mental mechanism, that and also people tend to associate oligarchy with
brutal, straight forwards autocratic rule.
US has a very sophisticated socio-political system that has isolated the elite and the common
man through many filters rather than one solid brick wall - so people dont see it. This
paired with large enough populations who are cretinous enough to actually vote for somebody
like Trump or give a second term to the likes of G.W Bush makes fooling extremely easy.
There is also the tendency of treating laws like dogma and the constitution like the bible. A
stark example of it is how they boast about freedom of speech. Everybody is keen to point out
that one can publicly criticize politicians without fear of prosecution but nobody seems to
notice how useless that speech is and how effectively the political elite shelters itself
from negative opinion and is able to proceed against the public will. I find it quite
fascinating.
ALL oligarchies are bad...they just function from a different starting point.
In the US, we have an oligarchy based on wealth,who then uses their money to buy the
political animals.
In Communist countries, you had a political oligarchy, who used their political powers to
corner the wealth.
And in religious oligarchies you have a few selected "high priests" using religious
fervor/special communication lines with whatever deity, to capture both wealth and politics.
None of these are preferable over the other as they all concentrate power into the hands
of the few (1-2%), against the interests of the many.
The fact is Western Democracy (democratic capitalism) is not and was never a true democracy.
Historians from at least 300 years from now, when studying our historical time, will state
our system was capitalism, whose political system was plutocracy -- the rule of the
capitalist class from behind the curtains, through puppet governors.
Sure, the same historians will, through archaeological evidence, state, correctly, that we
called and considered ourselves to live in a democracy. But they will also find evidence that
this claim was always contested by contemporaries. Emperor Augustus restored the
façade of the Republic and called himself princeps instead of king, and, officially,
Rome was still a Republic until the time of Marcus Aurelius to Diocletian (maybe the first
emperor to openly consider himself a monarch) -- it doesn't fool today's historians, and it
seems it didn't fool the Roman people also.
Oligarchy in USA is secure. For a generation, it has leveraged rightwing media to get
unquestioning support from white America based on aggrieved truculence toward the liberal,
the brown, and the black. And that was pre-Trump.
Now Trump rampages against the very symbol of the grievance: Obama.
It's midnight in the world's leading third world country
Anyone who's been accusing united states of being an oligarchy so far was branded as a
conspiracy nut. So does this article rehabilitates them and confirms their assertions?
In ancient Greece: "While the ruling class must remain united for an oligarchy to remain in
power, the people must also be divided so they cannot overthrow their oppressors." Today the
oligarchs aren't always united, because they see each other as rivals. But they have nothing
against dividing and weakening the people in order to prevent them from rising up to "their
oppressors."
Mass indoctrination is the answer. Oligarchs around the world seek to build up a media empire
to brainwash a gullible public and sow discord in the society. The most notorious members of
a civil oligarchy in the West are Silvio Berlusconi and Rupert Murdoch. Like oligarchs in
ancient Greece, their modern counterparts need democratic support to legitimise their goals.
And they support candidates in elections who will do their bidding once in office.
Oligarchy and plutocracy will continue to rule America, because the worship of money is a
popular faith. As long as an individual is well off, he/she sees little incentive to help
improve social equality. A revolution will only be possible if a critical mass is behind it.
Sounds about right - a least some, a very small minority, realise they're being suckered -
the overwhelming majority die pig ignorant, whether they believe they've made it or live in a
trailer park.
it's very rare that an article in the Guardian doesn't have an obvious agenda. Simple click
bait stuff. This article is different, and worthwhile reading. Excellent.
I am only surprised that anyone would still be in the dark about whether or not the US is an
oligarchy. It's been obvious now for at least the past three-four decades.
Yep---for where very few have very much and most have nothing, you have a pressure-cooker.
The property-police must indeed grow in number and brutality.
And the other half of it is what Ben Franklin warned about, "the corruption of the people."
The gangsters really sense and know how to play people against themselves---arousing
appetites, appealing to short-term pleasure, to short-term feel-good thinking and acts, and
to greed and lust for seemingly easy power. When you realize you're had, it's too late: "In
every transaction, there's a sucker. If you're wondering who that is, it's you."
Yep sure. The 'big white kid' pritecting the brown kid does tend to be working class or
middle class Jewish, and indeed, more likely to be socialist than liberal (in my
experience).
I wouldn't limit credit for this kind of thing to any particular ethnicity. But I will say
that most major successful reform 'crusades' of modern Western history were inspired by
Christian ideals, and often led by Christian clergy, including the anti-slavery Abolition
movement in 19th-century America, the Civil Rights movement in the 1950s and '60s, and the
anti-Communist revolutions in 1980's Eastern Central Europe. Even in the anti-Apartheid
movement, the churches played a leading role, personified, of course, by Bishop Tutu.
Correct, because that would be too easy . . . for 'Muricans, because Other people might
benefit, and because it is too, too logical a solution for the Turd World USA.
In the Oxford English Dictionary you find that "profit" and "advantage" are close cousins
etymologically. Makes sense, since "profit" (the word for value you did not put into an
exchange) creates "advantage"---and then you use advantages to give even less and take even
more profit. Round and round she goes, and there's no bottom. "Advantage" of course is also
inherently relative to somebody else's "DIS-advantage": hence our planet full of
"disadvantaged" working people.
No, I think the Democrats are the ones most successful at diverting the people from their own
power in favor of the banks. The Republicans are far less successful by their own control,
instead benefitting only from luck such as Wasserman-Schultz denying Elizabeth Warren from
her rightful place in the Oval Office. Sanders was the consolation candidate for Warren
voters. Warren would have beaten Trump 50-nil.
Correct. Two equal evils from the same nest-egg, a political party with two right-wings. At
the least, the public know why the First Nazi of Great America has an aura of flies.
a colleague of mine asked if America was really at risk of becoming an oligarchy. Our
political system, he said, is a democracy. If the people don't want to be run by wealthy
elites, we can just vote them out.
Thanks for the cracking joke. That was hilariously funny.
full and transparent disclosure of all finical and gift transactions between elected official
and anyone not in govt.. this include "payments" to family, friends their charities.. etc..
if you cant see the lie no one fight to have the laws and rules changed... additionally
lobbyist must no longer be allowed to have the type of closed door access to our leaders..
all these conversations must be moderated or flat out banned and a new form of communication
is developed.... put it this way I have never been able to get a meeting with my leading
politician yet big business can at almost any time.. I'm glad this issues is being more
openly discussed.. we need more of the same
Karl Marx, in The Communist Manifesto , indentified this in his concept, "False
Consciousness", and Orwell, taking Stalinism to exemplify it, points to the same in Animal
Farm , though I bet they weren't the first, and hope they won't be the last.
Machiavelli was right, when you need political favors to get to the top, then you will always
owe the favor-givers when you get there. Machiavelli also said this:
Sortition works!
When the most powerful person has literally zero interest in the outcome, they will defer
to moral utilitarianism every time. Ask Canada's John Ralton Saul "The Unconcious
Civilization" and Australia's Ricky Muir from the Motoring Enthusiasts Party [seriously] who
scuppered Aussie right-wingers from bringing US-style education-loans to rent-seek our
economy to death.
The problem is that today's so-called "populists" have been so propagandized into despising
the liberalism that could fight the oligarchs, and buying into the very policies and
philosophies that allow the oligarchs to consolidate their power (endless tax cuts,
undermined government, deregulation, big money in politics, destruction of unions, etc, etc.)
that they play right into their hands.
They've mistaken a demagogue for a man of the people and continue to cheer on the
dismantling of the checks on oligarchy that our system provides.
This country is in a world of hurt and those who should be exercizing their democratic
power to diminish the power of the oligarchs are busy dismantling it, thanks to decades of
right wing media propaganda.
All I see is more oligarchy, more autoctacy, and less power to the people. We just keep
sticking it to ourselves.
When anyone could instantly become president, then everyone has to be
educated as much as possible. Right? Hey classical policy scholars, sortition worked in
Ancient Greece too! As well as everywhere else ever since. Ever heard of court juries?
Divide and rule - the oldest trick in the book, and incredibly easy, as long as people are
kept ignorant by propaganda (currently known as The Media) and education.
Hillary Clinton lost because the working class (correctly) perceived her to be a supporter of
oligarchy in the USA. Her ties to Wall Street, corporate power, and the upper class were too
obvious.
Yes, Trump fooled many voters into believing that he was populist, but their perception of
Clinton was still accurate.
If the Democratic party leaders had chosen Sanders as their candidate, they would have won
the election. But the "Democratic" party leaders (ironically) feared what he offered: real
democracy.
"The Bad Hayek emerged when he aimed to convert a wider public. Then, as often happens, he
tended to overreach, and to suggest more than he had legitimately argued. The Road to Serfdom
was a popular success but was not a good book. Leaving aside the irrelevant extremes, or even
including them, it would be perverse to read the history, as of 1944 or as of now, as
suggesting that the standard regulatory interventions in the economy have any inherent
tendency to snowball into "serfdom." The correlations often run the other way. Sixty-five
years later, Hayek's implicit prediction is a failure, rather like Marx's forecast of the
coming "immiserization of the working class.""
This of course is a simplified version and can't really touch on everything, however he
glaringly leaves out the deliberate human suffering results from the oligarchy protecting its
wealth and aggressively taking over ever more markets. Yes, of course, what today is called
"alignment of interests" among the oligarchy is necessary but that alone is not enough they
mus also be ruthless beyond that of others. Nothing stands in the way of profits nothing
stands in the way of ever greater control. The oligarchy has decided that nature itself is
just another obstacle profit making - there is no room for empathy in the world of the
oligarchy poverty suffering from curable disease mutilation from bombs are acceptable
external consequences to their obsessive accumulation of wealth.
The real reason the oligarchy wins is because they are willing to be ruthless in the
extreme and society rewards ruthlessness and ridicules the empathetic.
This may be true, they often seem so blinded by their raw greed that their powers of reason
become dysfunctional. I don't think, however, that the stupid things they do to slake their
greed means that they are stupid. When the chips are down, they are capable of bringing their
considerable powers of reason to bear.
However stupid or smart they might be, we surely must realize that they have been at least
smart enough to gain total ownership and control of all our mass media. They use this tool,
the most powerful tool of social control that has ever existed, with consummate skill in
pursuit of their agenda(s).
If you look at the overall content of our mass media, you can see an impressive level of
'mind' at work, 'behind the curtain'. This 'mind' is constantly manipulating our
consciousness, using very highly sophisticated, highly skilled techniques.Their understanding
of human psychology, and their ability to manipulate us using our most basic appetites and
desires, is characterized by true genius, even ig that genius is diabolical in its
designs.
'They' choose what movies get made. Which TV shows are produced. Which songs get airplay.
Which social and political issues are sensationalized and which are buried.
Most of the citizens of our ostensible 'democracy' have been 'trained', just as any
animals are trained to any behavior, to be 'consumers' rather than 'citizens'. We are well
trained by an omnipresent mass media that assaults us constantly. In any direction that we
turn our gaze, or our attention, 'they' are there, to direct our thoughts as they think
serves their purposes.
I sure wouldn't sell these people's intelligence short. They may often do stupid things to
serve their greed, but they did not acquire the power that they have through any lack of
intelligence.
what everyone seems to forget is that whilst ancient Greece was the cradle of democracy it
was not only a slave state (whose slaves had no rights to vote) but that only an elite
minority were eligible to vote themselves - power very much rested with the vested interests
of the few.
I agree that societies are a reflection of the 'will' of the people these days, even if
that will is ill informed, reactionary or, as seems to be the case, largely uninterested in
voting. You get the governments you deserve and people in the West have become lazy,
permanently distracted, often ignorant and usually in the grip of one addiction or another,
thus allowing 'democracy' to be subverted. The media have had their role in this by allowing
themselves to be manipulated and owned by vested interests, rarely reporting the truth and
doing as they are told by various govt offices and departments. Uninformed people make poor
decisions.
What the Black Lives Matter movement is telling us is that the Oligarch's enforce their rules
of 'law' precisely at the barrels of guns, and by the words of one man after one man, each
with a uniform on and a camera off.
Further, you stated above that you were "...responding to a poster who called for
imprisonment for those concerned", when in fact the quote shows they were complaining about
people calling for imprisonment, not calling for it.
That shows you are twisting what was said, it is incredibly disingenuous of you.
It's the divisions of the left that allow Tory and Republican minority rule to prevail. In
the US the divide is quite bitter between Hillary and Bernie wings of the Dems- at the moment
I don't really see where reconciliation can emerge. And of course in Great Britain you
actually have two major parties competing rather self-destructively for the available votes
on the left. (As well as the mighty Greens...). Divided and conquered, indeed. And such a
bloody cliche!
Democracy is vulnerable to oligarchy because democrats focus so much on guaranteeing
political equality that they overlook the indirect threat that emerges from economic
inequality
And yet Marx doesn't rate a single mention in the entire article...
No, even though you've quoted me you have misunderstood what was perfectly plain. I stated
'like everyone else who voted to cut even more from disabled people's benefits'. Perhaps the
OP was proposing prison for JRM for expressing a viewpoint, but that was not and is not where
I'm coming from.
At its core, oligarchy involves concentrating economic power and using it for political
purposes.
Here is the exact reason why the Democratic Party is lost now. The Clintons,
Wasserman-Schultz, and their new Goldman Sachs alumni hero in New Jersey, and now Kamala
Harris seeking the same money from the same bankers.
It's sort of worked against the right though. Take a look at the last election. Yes, the
Tories got most votes, but they've pretty much lost all ethnic minorities, including asian
professionals, hindus and sikhs. Why is this, especially when Labour moved to left and are
now more socialist than left liberal?
Purely because the right has been subsumed by angry grievance mentality, or aggreived
entitlement. The internet is awash by people who hate assertive blacks and asians, Dianne
Abbott received half of all abuse of female MPs. And so.. the Labour pick up votes that
Tories had gained under Cameron. If you are a prosperous hindu dentist or stockbroker, sure
you might have shrugged off your parents labour voting tendencies and might be Tory. But
also, you might be seeing this sort of stuff, the bile on the internet, the resentment
expressed behind internet anonymity. And you might be thinking that deep down underneath that
expensive suit of yours, you are your father and mother, a tentative, slightly frightened,
cheaply dressed immigrant who has arrived as an outsider and are visibly aware that half the
population likes you, but the other half doesn't.
And so you vote Labour.
Divisiveness actually divides the core group you are aiming to win. If you do white
chauvinism, well, you end up unite everyone who is not white. Black, brown, yellow, all
huddle together scared, back under the labour fold. And you end up dividing the whites into
the patriotic and the 'self hating libtard'.
"Just read the language of many in here...apparent JRM should be banished and locked away.
You don't need to look to far to find odeous beliefs."
Your reply to that:
"Not locked away. Prison is expensive for the taxpayer. Assets sequestered for the good of
the commons and put to work cleaning - streets, hospitals, care homes - on workfare. Like
everyone else who voted to cut even more from disabled people's benefits, causing what the UN
has described as a 'catastrophe' for disabled people in this country"
My reply to you:
"You are advocating confiscation of private property and forced physical labour for people
who hold different political views to you. Is Stalin a hero of yours?"
Yours is a call to punish people for holding different political views to you.
Yours is an extremist position and, like all extremists, you think it is justified.
e.g. Park Chung-hee sent thousands of homeless people to camps where they were used as
slave labour, many were were tortured and executed.
Like I said, benignish. He took a third world basket case (which is what South Korea was up
until his seizure of power) and set it on the way to becoming a first world economy.
One of the most interesting mini-discourses I've read anywhere. I would only add that the
'mob' currently in charge of the polity of the House is actually a minority that has gamed
the system.
They also tried to keep ordinary people dependent on individual oligarchs for their
economic survival, similar to how mob bosses in the movies have paternalistic relationships
in their neighborhoods
"Democracy is vulnerable to oligarchy because democrats focus so much on guaranteeing
political equality that they overlook the indirect threat that emerges from economic
inequality."
No democrat with two working brain cells to rub together could honestly suppose that great
concentrations of wealth, which necessarily confer political power on the wealthy class, can
fail to undermine democracy. A capitalist democracy is an oxymoron and a delusion.
They admire the rich, and the lifestyles of the rich, although it is out of their reach.
They do not admire the wise, and the experienced.
They don't know who are their state and federal representatives.
They don't know the reason for the Civil War.
They don't know much about our history, our constitution, or anything about civics.
They don't know much about world history.
They don't read much, and are suspicious of education, and the properly educated.
They are easy marks for lies, and negative influence, because they never question.
They refuse to address, or even admit, their own irrational prejudices.
They don't vote, but they do plenty of complaining, and like to blame others for the problems
of our nation.
I do not think that benign or even benign(ish) suits the majority of the above e.g. Park
Chung-hee sent thousands of homeless people to camps where they were used as slave labour,
many were were tortured and executed.
Not sure how Carl Mannerheim gets to be on your list? He was appointed Military chief
during the Finnish civil war and he was elected President of Finland
At the same time, they sought to destroy monuments that were symbols of democratic
success. Instead of public works projects, dedicated in the name of the people, they relied
on what we can think of as philanthropy to sustain their power.
That was more because there was no income tax regime - something difficult to impose when
there was no centralized collection from a single consistent professional government. So if
the Athenian navy wanted a ship, it got a rich chap to pay for it. Rather than out of general
taxation.
Athens got rich on levies it imposed on its allies by way of protection money, which
eventually collapsed in acrimony, but that's a different story.
Owen Jones ? ......a man of high minded principle and unblemished
virtue . Don't think he would object to a spot of terror........in defence
of his liberal principles , of course..
I guess we are seeing some of oligarchy break down. Many oligarchs support many socialist
policies to avoid tension between classes. For eg: many rich support universal basic income
and some even support single payer healthcare.
You make a good point but in my wide but less than comprehensive knowledge of rapid
development often occurrs in periods of oligarchy.
All those mills that drove the industrial revolution, created by oligarchy.
All those armies and aqueducts that drove the Roman Empire, created by oligarchy.
All those libraries and universities that drove Greek learning, funded by the
oligarchy.
The great library of Alexandria, oligarchy.
OK, I'll concede that. Which makes for an interesting perspective on things overall,
actually. One can see the advantage of an oligarchy - wealth and power is concentrated in few
enough hands to achieve great things, but not so few that, like in a monarchy or
dictatorship, the leader must spend most time and effort on keeping their power. Whereas a
more equal democracy lacks the capacity to make bold steps or drive through unpopular new
ideas. But this also means the oligarchs have the power to grind down those underneath them,
and therefore in order to enjoy the fruits of that development, the oligarchy needs to be
destroyed.
In other words, oligarchies deliver growth, democracies deliver prosperity. I would
certainly not like to live under an oligarchy (assuming I'm not an oligarch) but it would be
beneficial for a country to have had one in the past.
I have come to the conclusion that the oligarchy which rules the world are complete imbeciles
who haven't a clue that the whole Neoliberal system they built in the 1970's is collapsing
and they are clueless on how to handle it. Just because they are wealthy and greedy doesn't
mean they are intelligent.
In order to prevent the protests from going out over the airwaves Fox (sports) in all their
'logic' started excluding broadcast of the Anthem. Early on I said I would not watch any of
these sporting events with, as you say, these jingoistic displays going out and Fox has
obliged me but I wont say thanks.
Britain isn't different. Oligarchy is built into our system of governance, e.g. royals and
house of lords. We even have special oligarch schools where children are sent to be educated
for leadership
"An informed citizenry is at the heart of a dynamic democracy." - Thomas Jefferson
We have Americans who don't know when the Civil War was fought, or even who won, but
insist we must stand for the national anthem before a ballgame.
So much for 'the Land of the Free'.
And in the older grades, they prescribe (hand out) adderall, CSN stimulants, like chiclets to
help student study (cram) and with comprehensive test taking.
This is the rub.....and the mob does not value education while the rulers value propaganda.
Notice the close association between Autocratic and Oligarchic systems and religion,
historical mythology and hyper-patriotism!
Or that's the evil of it. Economic inequality rises until people die. Like homeless on the
streets, starving food banks, grenfell tower, waiting on hospital beds instead of famine and
pitchfork wars.
The idea is to progress and solve problems before they escalate to pitchfork wars. Praising
grotesque inequality is not part of the solution, it's the cause of the problems.
What emerges from Plutocracy is Oligarchy...what emerges from Oligarchy is Autocracy.
Autocracy is one form or another is the natural state of human society....all the others are
ephemeral systems...or systems that disguise the actual Oligarchy or Autocracy!
The biggest contributor to America's plutocracy is our abysmally uninformed electorate.
HL Mencken knew this nearly a century ago when he said:
"As democracy is perfected, the office of president represents, more and more closely, the
inner soul of the people. On some great and glorious day the plain folks of the land will
reach their heart's desire at last and the White House will be adorned by a downright moron."
Just exactly when was it that "democracy defeated oligarchy in ancient Greece"?
What proportion of the population in Ancient Athens, for example, were actually
citizens...and what proportion of those actually held the franchise?...I believe that you
would find the numbers surprising!
Also ...when these (and other) writers speaks of Ancient Greece.....it is usually Athens that
they are mythologizing....most the Ancient Greek world had little by way of representative
government...let alone "Democracy"!
No I wasn't. I already responded to you regarding this. To remind you, I said
when people in positions of power take £28 billion (at least) off one of the most
powerless and already impoverished groups in our country (disabled people), resulting in
hundreds of suicides, enormous suffering, worsened isolation, serious lack of care support,
and thousands dying soon after being found 'fit to work' (a situation the UN has described
as a 'catastrophe') then I think it perfectly reasonable to favour some punishment for
those politicians who inflicted such suffering on their fellow citizens
I was not suggesting punishment for 'thought crime' or for expressing views, but
for actions seriously damaging to our citizens.
I have worked in several of the American rich's schools where they charge $30k per kid,
families have 3-5 kids there, plus they donate another $30k per kid per year. These schools
shame their $50k/year teachers into donating hundreds and thousands per year to their own
schools in order to prompt further donations from parents, who expect the poor teachers to
prove their fidelity to these rich kids by giving their own money to them. I have seen these
schools' principals fire teachers who teach "how to change things". I have seen them promote
teachers who teach absolutely nothing, because then the rich kids enjoy insulting and
demeaning those teachers' weaknesses. I have heard rich $chool principals tell Harvard
psychology lecturers that grade inflation is a marketplace necessity. I have seen rich
principals tell school inspectors that the curriculum presented for verification is supplied
by a currently-employed teacher (who was awfully bad at teaching) when in fact it was written
and prepared by a teacher who had just been fired "for methodology problems"...
American rich schools are the sickest schools on earth, even sicker than British boarders,
even sicker than other countries' orphanages.
Yes, but we now have the consummate...emphasis on "con"...bullshit artist in the White House
whose first order of business has been to discredit the media whenever it exposes him for
what he truly is. Trump has thousands of people believing that any media story about him
which is negative is "fake."
I consider populism an important part of the process as it creates a balance for
oligarchy.
I would consider that the greedy big picture thinking of oligarchy drives growth while the
greedy small picture thinking of the plebs (of which I am one) tries to get that growth more
equally distributed.
It is perhaps unlikely that a radical Athenian democrat from ancient Greece would recognise
any current form of government as genuinely democratic.
The cleverest way to maintain a long term oligarchy in these enlightened times might be to
have an elective one, only dressed up as something like say a 'parliamentary democracy'.
Luckily no-one has come up with this idea yet.
Exactly that is going on now - we have 'workers' and 'benefit scroungers', British against
'immigrants' who exactly are not immigrants as having legal rights to live in the UK (EU
citizens), 'deserving' poor and 'undeserving' poor.
Divide and rule.
Without knowing the past, it is impossible to understand the true meaning of the present and
the goals of the future.
It's so annoying that is has been so easy to manipulate with our society - Tories and UKIP
say 'hate!' and people do as if they are trained animals - hate people on benefits, EU
citizens, immigrants, asylum seekers, a conflict between Brexiters/Remainers...
Benign(ish) dictators of the 20th Century:-
Tito (Yugoslavia)
Carl Mannerheim (Finland)
Kemal Ataturk (Turkey)
Fidel Castro (Cuba)
Nasser (Egypt)
Park Chung-hee (South Korea)
Like I said, benign(ish). Each one the subject for a debate within themselves.
There is always winners and losers but the worst loser in modern British society had a better
standard of living than a winner of a century ago.
The key to human development is driving sustainable progress not worrying about who losses
out today.
Of course there must be balance because morally we must consider who loses our today. The
question is how much do we hamstring the children of tomorrow to help the losers of
today.
The super rich conservative oligarchy, currently running the UK, get away with it because
enough of the British people vote against their own economic interest.
Parents, for example, effectively vote for the food to be taken from their children's
mouths, converted to cash and given in tax cuts to the super rich conservative elite so they
can send their children to £30k a year private schools.
Political economy and political science should be compulsory in primary and secondary
school so that the ripping-off of the British people is made obvious through education and
ended through democratic revolution.
.. it's scary though.. automation will eliminate the economic support line for many, while
companies like Google have eyes and ears in every household.
Definition of democracy: "a system of government by the whole population or all the eligible
members of a state, typically through elected representatives." You are presenting an
anti-Democratic party talking point, not an enlightened understanding of subtle political
differences. Of course, the intention was a democracy in the USA, as compromised as it was
and is. What we are not, and never have been, is an absolute direct democracy -- a form of
governance appropriate only to small communities.
Considering that "the people" are not that much more enlightened than they were in ancient
Greece, yes it is the will of the people that allowed the US to become an oligarchy.
Considering the voting turnout around 56%, that means that 44% decided that they didn't
care whether or not their leader would be a good or a bad one.
That's more than 1 in 3 people who couldn't care less about the outcome of the
elections.
Excerpt from the above link: the spread of pseudo-public space in London – large squares, parks and thoroughfares
that appear to be public but are actually owned and controlled by developers and their
private backers
And I'm also reminded of Attlee's great words about the attitudes of oligarchs in
general:
Excerpt from the above link: Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay
his taxes gladly, not dole out money at a whim. - Attlee
I know that it's just geography but it appears that the 'left coast (west coast) teams
(players))' are taking a leadership role in this struggle. Unlike other professional sports
systems, the NFL players are at a disadvantage in terms of career length and working
conditions (eg, head injuries). I believe they're going to need some outside help (in
whatever form) to be successful which doesn't give me hope. There are a bunch of chicken
s____ outfits and power players out there at present that, as an example, allowed
(contributed) the Executive Branch takeover by a Russian backed interloper.
You make a good point but in my wide but less than comprehensive knowledge of rapid
development often occurrs in periods of oligarchy.
All those mills that drove the industrial revolution, created by oligarchy.
All those armies and aqueducts that drove the Roman Empire, created by oligarchy.
All those libraries and universities that drove Greek learning, funded by the
oligarchy.
The great library of Alexandria, oligarchy.
I recognise that it takes a plebeian revolt now and again to get the wealth shared out
fairly but the engine that drives the wealth so it can be shared often seem to be
oligarchy.
how is it, then, that the wealthy control so much of government? ...consequence of a lap dog
media who lick the ass rather than expose and speak the truth to power elites.
The captured author/minions have obviously not had full access to the reading room
*And the secret writings of
Part of a small cache of loose leaf scrolls smuggled out of Alexandria before the fire
Last entrusted to a small elite 13th century band of chainsaw wielding warrior...
Comedy writing nuns
Is about education, oligarchy wins to ignorant people. In order to have a healthy democracy
the people must be informed and educated other wise oligarchies groups will inundate
everything with cheap adds, will manipulate and will win control, methinks
And all brought down when the elites forgot that they were only the top of a pyramid and that
they ultimately relied on those below. We at the foot of the monolith can see that the
oligarchs serve only themselves so no longer buy into their project. We see that it is one
big club and we - unlike our political masters - ain't in it. So empires fall.
The author demonstrates his ignorance of the American system of government. He uses the word
"democracy" no less than 8 times, yet American is not a democracy and never has been a
democracy. You will find no form of the word "democracy" in any of the founding documents.
The Founding Fathers knew very well the dangers of democracies, and so they created the
American government as a constitutional republic. Not once does the author mention that; I
doubt he even knows what it means, let alone the difference.
If you're complaining because prices are (inevitably) regressive on the "poor" (however
defined), what do you say to the obvious retort that this is indeed the main difference
between being "poor", being comfortable, being affluent and being rich?
What is the point of working and earning if it isn't aimed at making oneself less "poor"
or more affluent?
Or as Mayer Amschel Rothschild correctly summed up the situation in 1790 - "Let me issue
and control a nation's money and I care not who writes the laws"
What this article fails to draw our attention to , and they never do, is that private
banks CREATE 97% of our entire money supply (look up "fractional reserve banking"). Whilst
that remains the case the "oligarchy" will always have firm control over the rest of us.
There was a time when the deadliest military weapon was the longbow. It could only be handled
by men who had been trained up since infancy.
It enabled the English to rout a numerically superior French force at Agincourt, 1415.
The notion that the early 15th century was a period of democratic government is an
interesting reading of history.
imo
In the US today, the oligarchy cannot win without an assist from a significant segment -- not
necessarily a majority -- of the overall population.
9/11 taught us that many people are willing to give up freedoms for the myth of security.
The Trump presidency is teaching us that many people are willing to give up their voice --
democracy -- for the myth of returning to a perceived better way of life (group superiority
over racial, gender, religious, etc equality) from some bygone era.
imo
We are currently experiencing a destabalisation of our nation and fellow Western Nations by
the dominant Western Nation to try to halt the failure of this vastly endebted bigger
brother......how do we stop this?
On this NFL Sunday it is not hard to imagine the secret meetings that owners and/or their
representatives had to coalesce against Kaepernick's 'taking a knee' to stop this form of
protest in its tracks as a oligarchical institution. On Tuesday, when Dallas Cowboys owner,
Jerry Jones declared that any player taking a knee would not play today, the circle of the
objective to chill dissent was complete.
Democracy was always like this. What is that famous quote, by Earl Grey or Sandwich or
someone, in Parliament, about allowing peasants to have the vote? "I do this, not to weaken
our power, but to preserve it"
Democracy in the UK and the US has always been a forum for the oligarchy to resolve their
own disputes rather than rule for the people by the people. Brexit is an example, a
referendum held essentially because of the split in conservative party.
And conservatives are going to save us all from done minded feel good policies of the left,
is that it?
Since the 80's American politics had swing do far to the right liberals are capitalists
monied elites, but the right had an army of simple minded uneducated lemmings on thier side,
people that will be against thier own personal interests because of 12th century religious
horse spit or group think. Thier are more Right winners in State houses, leadership positions
then ever before, they control the Congress, the courts, the Presidency and yet dolts like
you still say the country is going in the wrong directions and listen to son misters tell you
its the fault of the left. Somewhere in your reptilian brain you know this makes no sense,
but you lack of depth, you inability to comprehend what you read or to shake free from the
group think or right wing ideology will never let you understand that the bet people you vote
in time after time are the very ones whom have sold your job to the Chinese, profited from
your child's illnesses, war, chaos in some far off land.
Keeping voting Republicans, it's working out so well for you tailer, Nascar types...
The article obfuscates a distinction laid out by Aristotle, in The Politics: aristocracy -
rule by the few, focused on the common good; and oligarchy - rule by the few (wealthy),
focused on their selfish good. He argues that aristocracy, rule by the best, inevitably turns
into oligarchy, rule by the wealthy. In Aristotle's three forms of government - rule by one,
by few, by many - the three legitimate forms (monarchy, aristocracy, polity) degenerate into
their evils twins (tyranny, oligarchy, democracy). For Aristotle, Democracy was not a
legitimate form of government, but a corrupted form: mob rule, we might call it. The US
Constitution deliberately set out to create a mixed form of government: monarchy (president);
aristocracy (Senate and Supreme Court); polity (House of Reps.). From the beginning,
Americans have focused on the potential for our "monarch" (president) to turn into a tyrant:
Trump is the poster child for a single executive ruling on his own, selfish behalf. We have
been less aware of the fact that the Senate has become a simple oligarchy, while the House
has degenerated into a bastion of deputies chosen by what Aristotle would have called
democracy, that is, a corrupted form of rule by the many. Aristotle's citizens - those who
rule and are ruled in turn - can constitute about 10% of the population; in today's US that
would mean 20+ million people actively and continuously involved in politics (i.e., not
simply showing up every four years to mark a ballot). Millions of Americans have long done
such things, and political life remains active at the local level in many areas. On the
national level, the Tea Party has shown how this level of enhanced involvement can transform
politics, and has further shown that a coherent, organized minority can demolish what we
think of as democratic norms. They are about to elect a Senator in Alabama who has twice been
removed as a judge on the state's Supreme Court (an elective body), for violations of
judicial norms. Here in the US, all three forms of our original government - monarchy,
aristocracy, polity - have degenerated into their evil twins. Yes, the wealthy 1% will always
game the system in their favor, but until we restore each of the parts of our forma mixta, we
can never reduce their advantages to a level consonant with a decent form of society. Under W
Bush, the oligarchs got the tax rates (above all on capital gains) reduced to their 1929
levels. That legislation had a time limit, and Obama chose not to continue it: indeed, he
raised capital gains rates a further 3.8% [making the rate 23.8% as against the 15% of Bush].
Now, the two greatest goals of the oligarchs are a return to the 15% rate and the abolition
of the estate tax, so all of the fantastically rich Baby Boomers (say, Sec'y of Commerce
Ross, net worth $2.5 billion) can leave their wealth unencumbered to their heirs, solidifying
the oligarchy's control. The Tea Party, through all the yahoos now in the House, can focus on
creationism, climate change denial, immigration, etc., while the oligarchs quietly change the
tax system to perpetuate their dominance. Over here, we are already in fiscal year 2018
(started on Oct 1), so tax changes would really go into effect in 2019, that is, after the
mid-term election. If Mnuchen and Co. get their changes to capital gains rates and other
technical loopholes aimed at the 0.1% [sic], and eliminate the estate tax, we'll know that
the oligarchs have eliminated any barriers to their collective dictatorship.
What's new is, like this article, we have the vocabulary to frame both the problem and the
solution. Oligarchy is no longer inevitable and whilst the means of control are greater, the
means for derogation are too and there are fewer oligarchs than plebs.
Its now easier to spot bad behaviour and harder to keep secrets. Oligarchs have to use
force more often to hold into power and that tips their hand.
This article has left me (an avowed pessimist) feeling rather more optimistic.
They learned their lessons well after the 60's, the last time the people really raised up
against the machine, so they have given us all the; junk food at a low cost, all the TV and
mindless sexually charged entertainment, all the "debt wealth", a simple minded, unread,
semi-literate, beer swilling fool could ever ask for. And we all gladly gobble it up and
follow the crowd, for who wants to be on the outside looking in...
There is always a ruling elite because power is the wellspring of all human actions. There is
also a certain moral consciousness that many people argue is innate in human nature, and that
consciousness is fairness. The fairness instinct survives where ordinary human sympathy may
fail. Based upon this basic morality of fairness those of us who are willing to take risks in
the interest of fairness need to prune and tend the ruling elites as soon as possible. We
proles need to act together.
Democracy is not enough and besides democracy we also need reason, facts,and fighting spirit.
Sparta was more than just militarism, and slavery was also practised in Athens, as well as in
Rome and quite much everywhere else in the ancient world.
Sparta did something that today's democracies have forgotten: it cared about protection of
its citizens. That's the most elementary reason why a State exists, not to provide health or
education.
Now, regarding a replacement, epistocracy has yet to be tried. And the same democracy, but
with census suffrage, or via election of electors, who in turn elect the ones who will hold
office, have worked quite well in many places, producing better politicians, less inclined to
populism (take the Venetian Republic, for example).
Waiting for the oligarchy to rot from within isn't what i would call a viable plan.
Not when there is a far better and far more sure way to get the job done.
Start with capping wealth accumulation.
One must have already broken, or at least sufficiently loosened, the oligarchic grip on
politics to institute such a policy.
Here in the UK, things are the darkest they have been in my lifetime, including the
Thatcher years, but we are in a moment of possibilities that can lead in opposite
directions.
The author is surely right when he says
With all the upheaval in today's politics, it's hard not to think that this moment is
one in which the future of the political system might be more up for grabs than it has been
in generations.
Dominance of oligarchic political power, through neoliberalism, over the last four decades
has effectively put such policies out of bounds.
We had a Labour government that won convincingly under Blair while declaring itself
relaxed about the accumulation of great wealth.
Greece had a long period of decline at the hands of democracy.
Plato wrote his Republic as a protest, and to put forward an alternative.
Eventually the romans took control.
There are indeed parallels with today but given the external challenges I for one believe
that western society will be overtaken by q new set of rules.
Very good, interesting article. You know, every now & then this paper, for all it's
faults, serves up an article that is quite enlightened/ing.
The last one I recall was an article by
Kenan Malik on identity politics . For what exists in this country, the UK, I have previously used the term "oligarchy by
profession" ... meaning a pool of the usually upper half of the middle class, or a group in whom that
group is disproportionally represented, who not only likely have a select education but who
go on to become part of certain professions - accountants, lawyers, journalists, bankers,
doctors etc. ... and of course, politicians tend to be drawn from these.
And revolving door arrangements is one of the ways this pool retains a certain cohesion,
or as in the article "homogeneity in culture and values".
As for division, how many times have I read, "oh, we are so divided .. blah, blah", as
though some journalists have an almost unconscious need to promote it.
Bit too late, really. Not to mention it's super easy to take what they want while we're all
so distracted by arguing about who is the most racist misogynist, defending ourselves from
the accusations or applauding comic book movies. Apparently we're so distracted that we're
also all genuinely shocked that Hollywood is rife with pedophilia and extreme sexual
harassment as though it's some revelation that we didn't know already, but that's another
conversation.
If we're all so distracted then it's not difficult for our political 'representatives' -- I
use that word very tentatively because they barely ever do -- to subject themselves to the
oligarchs for a few scraps more than we have ourselves.
Maybe if we didn't bicker like kids we'd beat them.
Either you've not read the article attentively enough or your bias is irremediable. Limiting govt still leaves economic power and the tendency towards monopoly untouched. The
genetic impulse you mention is a spurious concept in itself. If there were such a genetic
impulse we would not have seen such a change as the major advances of women in the last half
century. Culture is the key, much more than any genetic impulse, which is practically
meaningless and so explains nothing.
As wealth defense is so important to oligarchs, there is a constant pressure to cheat and
break the law. One solution therefore is to apply the law but also to construct legislation
with specific principles in mind. If the point of tax legislation is to contribute your share
towards the general good then those who avoid and evade tax would be guilty of a technical
breach but also a breach of the principle.
However our laws are skewed to allowing the wealthy to defend their wealth and so a party of
the people is always needed. Always.
Lastly private schooling needs to be looked at. I mean FFS Eton has charitable status!
"... In the 1970s a programming shop was legacy American, with only a thin scattering of foreigners like myself. Twenty years later programming had been considerably foreignized , thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American programmers are an endangered species. ..."
"... So a well-paid and mentally rewarding corner of the middle-class job market has been handed over to foreigners -- for the sole reason, of course, that they are cheaper than Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other five percent is sentimentality. ..."
"... Now they are brazen in their crime: you have heard, I'm sure, those stories about American workers being laid off, with severance packages conditional on their helping train their cheaper foreign replacements. That's our legal ..."
"... A "merit-based" points system won't fix that. It will quickly and easily be gamed by employers to lay waste yet more middle-class occupational zones for Americans. If it was restricted to the higher levels of "merit," we would just be importing a professional overclass of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy Americans. How would that ..."
"... Measured by the number of workers per year, the largest guestworker program in the entire immigration system is now student visas through the Optional Practical Training program (OPT). Last year over 154,000 aliens were approved to work on student visas. By comparison, 114,000 aliens entered the workforce on H-1B guestworker visas. ..."
"... A History of the 'Optional Practical Training' Guestworker Program , ..."
"... incredible amount ..."
"... on all sorts of subjects ..."
"... for all kinds of outlets. (This ..."
"... no longer includes ..."
"... National Review, whose editors had some kind of tantrum and ..."
"... and several other ..."
"... . He has had two books published by VDARE.com com: ..."
"... ( also available in Kindle ) and ..."
"... Has it ever occurred to anyone other than me that the cost associated with foreign workers using our schools and hospitals and pubic services for free, is more than off-set by the cheap price being paid for grocery store items like boneless chicken breast, grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even for the wealthy? ..."
Item-wise, the biggest heading there is the second one, "Interior Enforcement." That's very
welcome.
Of course we need improved border security so that people don't enter our country without
permission. That comes under the first heading. An equally pressing problem, though, is the
millions of foreigners who are living and working here, and using our schools and hospitals and
public services, who should not be here.
The President's proposals on interior enforcement cover all bases: Sanctuary
cities , visa
overstays , law-enforcement
resources , compulsory E-Verify , more
deportations , improved visa security.
This is a major, wonderful improvement in national policy, when you consider that less than
a year ago the
White House and
Justice Department were run by committed open-borders
fanatics. I thank the President and his staff for having put so much work into such a
detailed proposal for restoring American sovereignty and the rights of American workers and
taxpayers.
That said, here come the quibbles.
That third heading, "Merit-Based Immigration System," with just four items, needs work.
Setting aside improvements on visa controls under the other headings, this is really the only
part of the proposal that covers legal immigration. In my opinion, it does so imperfectly.
There's some good meat in there, mind. Three of the four items -- numbers one, three, and
four -- got a fist-pump from me:
cutting down chain
migration by limiting it to spouse and dependent children; eliminating the Diversity
Visa Lottery ; and limiting the number of refugees admitted, assuming this means severely
cutting back on the numbers, preferably all the way to
zero.
Good stuff. Item two, however, is a problem. Quote:
Establish a new, points-based system for the awarding of Green Cards (lawful permanent
residents) based on factors that allow individuals to successfully assimilate and support
themselves financially.
sounds OK, bringing in talented, well-educated, well-socialized people, rather than
what the late Lee
Kuan Yew referred to as " fruit-pickers ." Forgive
me if I have a rather jaundiced view of this merit-based approach.
For most of my adult life I made a living as a computer programmer. I spent four years
doing this in the U.S.A. through the mid-1970s. Then I came back in the late 1980s and
worked at the same trade here through the 1990s. (Pictured right–my actual H-1B visa ) That gave me two
clear snapshots twenty years apart, of this particular corner of skilled middle-class
employment in America.
In the 1970s a programming shop was legacy American, with only a thin scattering of
foreigners like myself. Twenty years later programming had been considerably foreignized ,
thanks to the H-1B visa program. Now, twenty years further on, I believe legacy-American
programmers are an endangered species.
So a well-paid and mentally rewarding corner of the middle-class job market has been
handed over to foreigners -- for the sole reason, of course, that they are cheaper than
Americans. The desire for cheap labor explains 95 percent of U.S. immigration policy. The other
five percent is sentimentality.
On so-called "merit-based immigration," therefore, you can count me a cynic. I have no doubt
that American firms could recruit all the computer programmers they need from among our legacy
population. They used to do so, forty years ago. Then they discovered how to game the
immigration system for cheaper labor.
A "merit-based" points system won't fix that. It will quickly and easily be gamed by
employers to lay waste yet more middle-class occupational zones for Americans. If it was
restricted to the higher levels of "merit," we would just be importing a professional overclass
of foreigners, most East and South Asians, to direct the labors of less-meritorious legacy
Americans. How would that contribute to social harmony?
With coming up to a third of a
billion people, the U.S.A. has all the talent, all the merit , it needs. You might
make a case for a handful of certified geniuses like Einstein or worthy dissidents like
Solzhenitsyn, but those cases aside, there is no reason at all to have guest-worker programs.
They should all be shut down.
Some of these cheap-labor rackets don't even need congressional action to shut them down; it
can be done by regulatory change via executive order. The scandalous OPT-visa scam, for
example, which brings in cheap workers under the guise of student visas.
Here is John Miano writing about the OPT program last month, quote:
Measured by the number of workers per year, the largest guestworker program in the
entire immigration system is now student visas through the Optional Practical Training
program (OPT). Last year over 154,000 aliens were approved to work on student visas. By
comparison, 114,000 aliens entered the workforce on H-1B guestworker visas.
Because there is no reporting on how long guestworkers stay in the country, we do not know
the total number of workers in each category. Nonetheless, the number of approvals for work
on student visas has grown by 62 percent over the past four years so their numbers will soon
dwarf those on H-1B visas.
End quote. (And a cheery wave of acknowledgement to John Miano here from one of the
other seventeen people in the U.S.A. that knows the correct placement of the hyphen in
"H-1B.")
Our legal immigration system is addled with these scams. Don't even get me started
on
the EB-5 investor's visa . It all needs sweeping away.
So for preference I would rewrite that third heading to include, yes, items one, three, and
four -- cutting down chain migration, ending the Diversity Visa Lottery, and ending refugee
settlement for anyone of less stature than Solzhenitsyn; but then, I'd replace item two with
the following:
End all guest-worker programs, with exceptions only for the highest levels of
talent and accomplishment, limit one hundred visas per annum .
So much for my amendments to the President's October 8th proposals. There is, though, one
glaring omission from that 70-item list. The proposal has no mention at all of birthright
citizenship.
Yes, yes, I know: some constitutional authorities argue that birthright citizenship is
implied in the
Fourteenth Amendment , although it is certain that the framers of that Amendment did not
have foreign tourists or illegal entrants in mind. Other scholars think Congress could
legislate against it.
The only way to find out is to have Congress legislate. If the courts strike down the
legislation as unconstitutional, let's then frame a constitutional amendment and put it to the
people.
Getting rid of birthright citizenship might end up a long and difficult process. We might
ultimately fail. The only way to find out is to get the process started . Failure to
mention this in the President's proposal is a very glaring omission.
I agree with ending birthright citizenship. But Trump should wait until he can put at
least one more strict constitutionalist in the supreme court. There will be a court
challenge, and we need judges who can understand that if the 14th Amendment didn't give
automatic citizenship to American Indians it doesn't give automatic citizenship to children
of Mexican citizens who jumped our border.
John's article, it seems to me, ignores the elephant in the room: the DACA colonists.
Trump is offering this proposal, more or less, in return for some sort of semi-permanent
regularization of their status. Bad trade, in my opinion. Ending DACA and sending those
illegals back where they belong will have more real effect on illegal and legal
immigration/colonization than all sorts of proposals to be implemented in the future, which
can and will be changed by subsequent Administrations and Congresses.
Trump would also be able to drive a much harder bargain with Congress (like maybe a
moratorium on any immigration) if he had kept his campaign promise, ended DACA the afternoon
of January 20, 2017, and busloads of DACA colonists were being sent south of the Rio
Grande.
The best hope for immigration patriots is that the Democrats are so wedded to Open Borders
that the entire proposal dies and Trump, in disgust, reenacts Ike's Operation Wetback.
Well, in the real world, things just don't work that way. It's pay me now or pay me
later. Once all the undocumented workers who are doing all the dirty, nasty jobs Americans
refuse to do are run out the country, then what?
Right, prior to 1965, Americans didn't exist. They had all starved to death because, as
everyone knows, no Americans will work to produce food and, even if they did, once Tyson
chicken plants stop making 50 percent on capital they just shut down.
If there were no Somalis in Minnesota, even Warren Buffett couldn't afford grapes.
Illegal immigrants picking American produce is a false economy.
Illegal immigrants are subsidized by the taxpayer in terms of public health, education,
housing, and welfare.
If businesses didn't have access to cheap and subsidized illegal alien labor, they would
be compelled to resort to more farm automation to reduce cost.
Cheap illegal alien labor delays the inevitable use of newer farm automation
technologies.
Many Americans would likely prefer a machine touch their food rather than a illegal alien
with strange hygiene practices.
In addition, anti-American Democrats and neocons prefer certain kinds of illegal aliens
because they bolster their diversity scheme.
@Realist "Once all the undocumented workers who are doing all the dirty, nasty jobs
Americans refuse to do are run out the country, then what?"
Eliminate welfare...then you'll have plenty of workers. Unfortunately, that train left the
station long ago. With or without welfare, there's simply no way soft, spoiled, lazy,
over-indulged Americans who have never hit a lick at anything their life, will ever perform
manual labor for anyone, including themselves.
@Randal Probably people other than you have worked out that once their wages are not
being continually undercut by cheap and easy immigrant competition, the American working
classes will actually be able to earn enough to pay the increased prices for grocery store
items, especially as the Americans who, along with machines, will replace those immigrants
doing the "jobs Americans won't do" will also be earning more and actually paying taxes on
it.
The "jobs Americans/Brits/etc won't do" myth is a deliberate distortion of reality that
ignores the laws of supply and demand. There are no jobs Americans etc won't do, only jobs
for which the employers are not prepared to pay wages high enough to make them worthwhile for
Americans etc to do.
Now of course it is more complicated than that. There are jobs that would not be
economically viable if the required wages were to be paid, and there are marginal
contributions to job creation by immigrant populations, but those aspects are in reality far
less significant than the bosses seeking cheap labour want people to think they are.
As a broad summary, a situation in which labour is tight, jobs are easy to come by and
staff hard to hold on to is infinitely better for the ordinary working people of any nation
than one in which there is a huge pool of excess labour, and therefore wages are low and
employees disposable.
You'd think anyone purporting to be on the "left", in the sense of supporting working
class people would understand that basic reality, but far too many on the left have been
indoctrinated in radical leftist anti-racist and internationalist dogmas that make them
functional stooges for big business and its mass immigration program.
Probably people other than you have worked out that once their wages are not being
continually undercut by cheap and easy immigrant competition, the American working classes
will actually be able to earn enough to pay the increased prices for grocery store items,
especially as the Americans who, along with machines, will replace those immigrants doing
the "jobs Americans won't do" will also be earning more and actually paying taxes on
it.
There might be some truth in this. When I was a student in England in the 60′s I
spent every summer working on farms, picking hops, apples, pears, potatoes and made some
money and had a lot of fun too and became an expert farm tractor operator.
No reason why US students and high school seniors should not pick up a lot of the slack.
Young people like camping in the countryside and sleeping rough, plus lots of
opportunity to meet others, have sex, smoke weed, drink beer, or whatever. If you get a free
vacation plus a nice check at the end, that makes the relatively low wages worthwhile. It is
not always a question of how much you are paid, but how much you can save.
We can fix the EB-5 visa scam. My suggestion: charge would-be "investors" $1 million to
enter the US. This $1 is not refundable under any circumstance. It is paid when the
"investor's" visa is approved. If the "investor" is convicted of a felony, he is deported. He
may bring no one with him. No wife, no child, no aunt, no uncle. Unless he pays $1 million
for that person.
We will get a few thousand Russian oligarchs and Saudi princes a year under this
program
As to fixing the H-1B visa program, we charge employer users of the program say $25,000
per year per employee. We require the employers to inform all employees that if any is asked
to train a replacement, he should inform the DOJ immediately. The DOJ investigates and if
true, charges managerial employees who asked that a replacement be trained with fraud.
As to birthright citizenship: I say make it a five-year felony to have a child while in
the US illegally. Make it a condition of getting a tourist visa that one not be pregnant. If
the tourist visa lasts say 60 days and the woman has a child while in the US, she gets
charged with fraud.
None of these suggestions requires a constitutional amendment.
In the United States middle class prosperity reached its apogee in 1965 – before the
disastrous (and eminently foreseeable) wage-lowering consequence of the Hart-Celler Open
Immigration Act's massive admission of foreigners increased the supply of labor which began
to lower middle class prosperity and to shrink and eradicate the middle class.
It was in 1965 that ordinary Americans, enjoying maximum employment because employers were
forced to compete for Americans' talents and labor, wielded their peak purchasing
power . Since 1970 wages have remained stagnant, and since 1965 the purchasing power of
ordinary Americans has gone into steep decline.
It is long past time to halt Perpetual Mass Immigration into the United States, to end
birthright citizenship, and to deport all illegal aliens – if, that is, our leaders
genuinely care about and represent us ordinary Americans instead of continuing their
legislative, policy, and judicial enrichment of the 1-percenter campaign donor/rentier class
of transnational Globali$t Open Border$ E$tabli$hment $ellout$.
Re the birthright citizenship argument, that is not settled law in that SCOTUS has never
ruled on the question of whether a child born in the US is thereby a citizen if the parents
are illegally present. Way back in 1897, SCOTUS did resolve the issue of whether a child born
to alien parents who were legally present was thereby a citizen. That case is U.S. vs Wong
Kim Ark 169 US 649. SCOTUS ruled in favor of citizenship. If that was a justiciable issue how
much more so is it when the parents are illegally present?
My thinking is that the result would be the same but, at least, the question would be
settled. I cannot see justices returning a toddler to Beijing or worse. They would never have
invitations to cocktail parties again for the shame heaped upon them for such uncaring
conduct. Today, the title of citizen is conferred simply by bureaucratic rule, not by
judicial order.
Arguments Against Fourteenth Amendment Anchor Baby Interpretation
J. Paige Straley
Part One. Anchor Baby Argument, Mexican Case.
The ruling part of the US Constitution is Amendment Fourteen: "All persons born or
naturalized in the United States, and subject to the jurisdiction thereof, are citizens of
the United States and of the State wherein they reside."
Here is the ruling part of the Mexican Constitution, Section II, Article Thirty:
Article 30
Mexican nationality is acquired by birth or by naturalization:
A. Mexicans by birth are:
I. Those born in the territory of the Republic, regardless of the nationality of
their parents:
II. Those born in a foreign country of Mexican parents; of a Mexican father and
a foreign mother; or of a Mexican mother and an unknown father;
III. Those born on Mexican vessels or airships, either war or merchant vessels. "
A baby born to Mexican nationals within the United States is automatically a Mexican
citizen. Under the anchor baby reasoning, this baby acquires US citizenship at the same time
and so is a dual citizen. Mexican citizenship is primary because it stems from a primary
source, the parents' citizenship and the law of Mexico. The Mexican Constitution states the
child of Mexican parents is automatically a Mexican citizen at birth no matter where the
birth occurs. Since the child would be a Mexican citizen in any country, and becomes an
American citizen only if born in America, it is clear that Mexico has the primary claim of
citizenry on the child. This alone should be enough to satisfy the Fourteenth Amendment
jurisdiction thereof argument. Since Mexican citizenship is primary, it has primary
jurisdiction; thus by the plain words of the Fourteenth such child is not an American citizen
at birth.
[MORE]
There is a second argument for primary Mexican citizenship in the case of anchor babies.
Citizenship, whether Mexican or American, establishes rights and duties. Citizenship is a
reciprocal relationship, thus establishing jurisdiction. This case for primary Mexican
citizenship is supported by the fact that Mexico allows and encourages Mexicans resident in
the US, either illegal aliens or legal residents, to vote in Mexican elections. They are
counted as Mexican citizens abroad, even if dual citizens, and their government provides
widespread consular services as well as voting access to Mexicans residing in the US. As far
as Mexico is concerned, these persons are not Mexican in name only, but have a civil
relationship strong enough to allow a political voice; in essence, full citizenship. Clearly,
all this is the expression of typical reciprocal civic relationships expressed in legal
citizenship, further supporting the establishment of jurisdiction.
Part Two: Wong Kim Ark (1898) case. (Birthright Citizenship)
The Wong Kim Ark (WKA) case is often cited as the essential legal reasoning and precedent
for application of the fourteenth amendment as applied to aliens. There has been plenty of
commentary on WKA, but the truly narrow application of the case is emphasized reviewing a
concise statement of the question the case was meant to decide, written by Hon. Horace Gray,
Justice for the majority in this decision.
"[W]hether a child born in the United States, of parents of Chinese descent, who, at the
time of his birth, are subjects of the Emperor of China, but have a permanent domicile and
residence in the United States, and are there carrying on business, and are not employed in
any diplomatic or official capacity under the Emperor of China, becomes at the time of his
birth a citizen of the United States by virtue of the first clause of the Fourteenth
Amendment of the Constitution." (Italics added.)
For WKA to justify birthright citizenship, the parents must have " permanent domicile and
residence " But how can an illegal alien have permanent residence when the threat of
deportation is constantly present? There is no statute of limitation for illegal presence in
the US and the passage of time does not eliminate the legal remedy of deportation. This alone
would seem to invalidate WKA as a support and precedent for illegal alien birthright
citizenship.
If illegal (or legal) alien parents are unemployed, unemployable, illegally employed, or
if they get their living by illegal means, then they are not ". . .carrying on business. .
.", and so the children of indigent or criminal aliens may not be eligible for birthright
citizenship
If legal aliens meet the two tests provided in WKA, birthright citizenship applies.
Clearly the WKA case addresses the specific situation of the children of legal aliens, and so
is not an applicable precedent to justify birthright citizenship for the children of illegal
aliens.
Part three. Birth Tourism
Occasionally foreign couples take a trip to the US during the last phase of the wife's
pregnancy so she can give birth in the US, thus conferring birthright citizenship on the
child. This practice is called "birth tourism." WKA provides two tests for birthright
citizenship: permanent domicile and residence and doing business, and a temporary visit
answers neither condition. WKA is therefore disqualified as justification for a "birth
tourism" child to be granted birthright citizenship.
@Carroll Price Unfortunately, that train left the station long ago. With or without
welfare, there's simply no way soft, spoiled, lazy, over-indulged Americans who have never
hit a lick at anything their life, will ever perform manual labor for anyone, including
themselves. Then let them starve to death. The Pilgrims nipped that dumb ass idea (welfare)
in the bud
An equally pressing problem, though, is the millions of foreigners who are living and
working here, and using our schools and hospitals and public services, who should not be
here.
Has it ever occurred to anyone other than me that the cost associated with
foreign workers using our schools and hospitals and pubic services for free, is more than
off-set by the cheap price being paid for grocery store items like boneless chicken breast,
grapes, apples, peaches, lettuce etc, which would otherwise be prohibitively expensive even
for the wealthy?
Let alone relatively poor people (like myself) and those on fixed incomes? What
un-thinking Americans want, is having their cake and eating it too. Well, in the real world,
things just don't work that way. It's pay me now or pay me later. Once all the undocumented
workers who are doing all the dirty, nasty jobs Americans refuse to do are run out the
country, then what? Please look up;History; United States; pre mid-twentieth century. I'm
pretty sure Americans were eating chicken, grapes, apples, peaches, lettuce, etc. prior to
that period. I don't think their diet consisted of venison and tree bark.
But since I wasn't there, maybe I'm wrong and that is actually what they were eating.
I know some people born in the 1920′s; I'll check with them and let you know what they
say.
"... The elite schools, and I have taught as a visiting professor at a few of them, such as Princeton and Columbia, replicate the structure and goals of corporations. If you want to even get through a doctoral committee, much less a tenure committee, you must play it really, really safe. You must not challenge the corporate-friendly stance that permeates the institution and is imposed through corporate donations and the dictates of wealthy alumni. Half of the members of most of these trustee boards should be in prison! ..."
"... Speculation in the 17th century in Britain was a crime. Speculators were hanged. And today they run the economy and the country. They have used the capturing of wealth to destroy the intellectual, cultural and artistic life in the country and snuff out our democracy. There is a word for these people: traitors. ..."
...The elite schools,
and I have taught as a visiting professor at a few of them, such as Princeton and Columbia, replicate
the structure and goals of corporations. If you want to even get through a doctoral committee, much
less a tenure committee, you must play it really, really safe. You must not challenge the corporate-friendly
stance that permeates the institution and is imposed through corporate donations and the dictates
of wealthy alumni. Half of the members of most of these trustee boards should be in prison!
Speculation in the 17th century in Britain was a crime. Speculators were hanged. And today they
run the economy and the country. They have used the capturing of wealth to destroy the intellectual,
cultural and artistic life in the country and snuff out our democracy. There is a word for these
people: traitors.
Chris Hedges published this book eight years ago and the things he predicted have sadly been
realized
Notable quotes:
"... his screed is a liberating tonic against the crazy-making double-speak and the lies Americans are sold by our country's elite in order to distract us from the true threat and nature of the Corporate State, from the cult of celebrity, to how our nation's Universities have been hijacked to serve the interests, not of the public, but of our corporate overlords. It explains the self-same conditions in all aspects of our society and culture that we now must face, the ever-shrinking flame of enlightenment being exchanged for the illusory shadows on a cave wall. ..."
"... He fearlessly and incisively calls us out on the obvious farce our democracy has become, how we got here, and highlights the rapidly closing window in which we have to do something to correct it. It is a revelation, and yet he merely states the obvious. The empire has no clothes. ..."
"... One of the most powerful aspects of this book was in regard to how our Universities are run these days. I may be in the minority, but I experienced a life-changing disillusionment when I gained entrance to a prestigious "elite" University. Instead of drawing the best and the brightest, or being a place where scholarship was valued, where students were taught critical thinking skills, the University I attended was nothing more than an expensive diploma mill for the children of the wealthy. In the eyes of the University, students were not minds to be empowered and developed, but walking dollar signs. ..."
"... Instead of critical thinking, students were taught to OBEY, not to question authority, and then handed a piece of paper admitting them to the ruling class that is destroying America without a moral compass. Selfishness, deceit, disregard for the common good, and a win-at-all-costs attitude were rewarded. Empathy, curiosity, dissent, and an honest, intellectually rigorous evaluation of ourselves and our world were punished. Obviously I am not the only one to whom this was cause to fear for the future of our country. ..."
Hedges cogently and systematically dismantles the most pernicious cultural delusions of
our era and lays bare the pitiful truths that they attempt to mask. This book is a
deprogramming manual that trims away the folly and noise from our troubled society so that
the reader can focus on the most pressing matters of our time.
Despite the dark reality Hedges excavates, his screed is a liberating tonic against
the crazy-making double-speak and the lies Americans are sold by our country's elite in order
to distract us from the true threat and nature of the Corporate State, from the cult of
celebrity, to how our nation's Universities have been hijacked to serve the interests, not of
the public, but of our corporate overlords. It explains the self-same conditions in all
aspects of our society and culture that we now must face, the ever-shrinking flame of
enlightenment being exchanged for the illusory shadows on a cave wall.
As a twenty-something caught in the death-throes of American Empire and culture, I have
struggled to anticipate where our country and our world are heading, why, and what sort of
life I can expect to build for myself. Hedges presents the reader with the depressing, yet
undeniable truth of the forces that have coalesced to shape the world in which we now find
ourselves. The light he casts is searing and relentless. He fearlessly and incisively
calls us out on the obvious farce our democracy has become, how we got here, and highlights
the rapidly closing window in which we have to do something to correct it. It is a
revelation, and yet he merely states the obvious. The empire has no clothes.
One of the most powerful aspects of this book was in regard to how our Universities
are run these days. I may be in the minority, but I experienced a life-changing
disillusionment when I gained entrance to a prestigious "elite" University. Instead of
drawing the best and the brightest, or being a place where scholarship was valued, where
students were taught critical thinking skills, the University I attended was nothing more
than an expensive diploma mill for the children of the wealthy. In the eyes of the
University, students were not minds to be empowered and developed, but walking dollar
signs.
Instead of critical thinking, students were taught to OBEY, not to question authority,
and then handed a piece of paper admitting them to the ruling class that is destroying
America without a moral compass. Selfishness, deceit, disregard for the common good, and a
win-at-all-costs attitude were rewarded. Empathy, curiosity, dissent, and an honest,
intellectually rigorous evaluation of ourselves and our world were punished. Obviously I am
not the only one to whom this was cause to fear for the future of our country.
Five stars is not enough. Ever since I began reading Empire of Illusion, I have insisted
friends and family pick up a copy, too. Everyone in America should read this incredibly
important book.
"... Billionaires in the commercial conglomerates, like Walmart, exploit workers by paying poverty wages and providing few, if any, benefits. Walmart earns $16 billion dollar a year in profits by paying its workers between $10 and $13 an hour and relying on state and federal assistance to provide services to the families of its impoverished workers through Medicaid and food stamps. ..."
"... Inequality is not a result of 'technology' and 'education'- contemporary euphemisms for the ruling class cult of superiority – as liberals and conservative economists and journalists like to claim. Inequalities are a result of low wages, based on big profits, financial swindles, multi-trillion dollar public handouts and multi-billion-dollar tax evasion. ..."
"... Workers pay disproportional taxes for education, health, social and public services and subsidies for billionaires ..."
"... First and foremost, billionaires and their political, legal and corporate associates dominate the political parties. They designate the leaders and key appointees, thus ensuring that budgets and policies will increase their profits, erode social benefits for the masses and weaken the political power of popular organizations ..."
"... As a result, wage and salary workers are less organized and less influential; they work longer and for less pay, suffer greater workplace insecurity and injuries – physical and mental – fall into decline and disability, drop out of the system, die earlier and poorer, and, in the process, provide unimaginable profits for the billionaire class ..."
"... The bulk of repatriated profits are directed to buy back stock to increase dividends for investors; they are not invested in the productive economy. Lower taxes and greater profits for conglomerates means more buy-outs and greater outflows to low wage countries. In real terms taxes are already less than half the headline rate and are a major factor heightening the concentration of income and power – both cause and effect. ..."
"... In other words, the capitalist class as a whole, globalist and domestic alike, pursues the same regressive policies, promoting inequalities while struggling over shares of the profits. One hundred and fifty million wage and salaried taxpayers are excluded from the political and social decisions that directly affect their income, employment, rates of taxation, and political representation. ..."
"... However, worker hostility and despair is directed against 'immigrants' and against the 'liberals' who have backed the import of cheap skilled and semi-skilled labor under the guise of 'freedom'. This 'politically correct' image of imported labor covers up a policy, which has served to lower wages, benefits and living standards for American workers, whether they are in technology, construction or production. ..."
"... The pro and anti-immigrant issue avoids the root cause for the economic exploitation and social degradation of the working class – the billionaire owners operating in alliance with the political elite. ..."
Billionaires in the commercial conglomerates, like Walmart, exploit workers by paying
poverty wages and providing few, if any, benefits. Walmart earns $16 billion dollar a year in
profits by paying its workers between $10 and $13 an hour and relying on state and federal
assistance to provide services to the families of its impoverished workers through Medicaid and
food stamps. Amazon plutocrat Jeff Bezos exploits workers by paying $12.50 an hour while he has
accumulated over $80 billion dollars in profits. UPS CEO David Albany takes $11 million a year
by exploiting workers at $11 an hour. Federal Express CEO, Fred Smith gets $16 million and pays
workers $11 an hour.
Inequality is not a result of 'technology' and 'education'- contemporary euphemisms for the
ruling class cult of superiority – as liberals and conservative economists and
journalists like to claim. Inequalities are a result of low wages, based on big profits,
financial swindles, multi-trillion dollar public handouts and multi-billion-dollar tax evasion.
The ruling class has mastered the 'technology' of exploiting the state, through its pillage of
the treasury, and the working class. Capitalist exploitation of low paid production workers
provides additional billions for the 'philanthropic' billionaire family foundations to polish
their public image – using another tax avoidance gimmick – self-glorifying
'donations'.
Workers pay disproportional taxes for education, health, social and public services and
subsidies for billionaires.
Billionaires in the arms industry and security/mercenary conglomerates receive over $700
billion dollars from the federal budget, while over 100 million US workers lack adequate health
care and their children are warehoused in deteriorating schools.
Workers and Bosses: Mortality Rates
Billionaires and multi-millionaires and their families enjoy longer and healthier lives than
their workers. They have no need for health insurance policies or public hospitals. CEO's live
on average ten years longer than a worker and enjoy twenty years more of healthy and pain-free
lives.
Private, exclusive clinics and top medical care include the most advanced treatment and safe
and proven medication which allow billionaires and their family members to live longer and
healthier lives. The quality of their medical care and the qualifications of their medical
providers present a stark contrast to the health care apartheid that characterizes the rest of
the United States.
Workers are treated and mistreated by the health system: They have inadequate and often
incompetent medical treatment, cursory examinations by inexperienced medical assistants and end
up victims of the widespread over-prescription of highly addictive narcotics and other
medications. Over-prescription of narcotics by incompetent 'providers' has significantly
contributed to the rise in premature deaths among workers, spiraling cases of opiate overdose,
disability due to addiction and descent into poverty and homelessness. These irresponsible
practices have made additional billions of dollars in profits for the insurance corporate
elite, who can cut their pensions and health care liabilities as injured, disabled and addicted
workers drop out of the system or die.
The shortened life expectancy for workers and their family members is celebrated on Wall
Street and in the financial press. Over 560,000 workers were killed by opioids between
1999-2015 contributing to the decline in life expectancy for working age wage and salary
earners and reduced pension liabilities for Wall Street and the Social Security
Administration.
Inequalities are cumulative, inter-generational and multi-sectorial.
Billionaire families, their children and grandchildren, inherit and invest billions. They
have privileged access to the most prestigious schools and medical facilities, and conveniently
fall in love to equally privileged, well-connected mates to join their fortunes and form even
greater financial empires. Their wealth buys favorable, even fawning, mass media coverage and
the services of the most influential lawyers and accountants to cover their swindles and tax
evasion.
Billionaires hire innovators and sweat shop MBA managers to devise more ways to slash wages,
increase productivity and ensure that inequalities widen even further. Billionaires do not have
to be the brightest or most innovative people: Such individuals can simply be bought or
imported on the 'free market' and discarded at will.
Billionaires have bought out or formed joint ventures with each other, creating interlocking
directorates. Banks, IT, factories, warehouses, food and appliance, pharmaceuticals and
hospitals are linked directly to political elites who slither through doors of rotating
appointments within the IMF, the World Bank, Treasury, Wall Street banks and prestigious law
firms.
Consequences of Inequalities
First and foremost, billionaires and their political, legal and corporate associates
dominate the political parties. They designate the leaders and key appointees, thus ensuring
that budgets and policies will increase their profits, erode social benefits for the masses and
weaken the political power of popular organizations .
Secondly, the burden of the economic crisis is shifted on to the workers who are fired and
later re-hired as part-time, contingent labor. Public bailouts, provided by the taxpayer, are
channeled to the billionaires under the doctrine that Wall Street banks are too big to fail and
workers are too weak to defend their wages, jobs and living standards.
Billionaires buy political elites, who appoint the World Bank and IMF officials tasked with
instituting policies to freeze or reduce wages, slash corporate and public health care
obligations and increase profits by privatizing public enterprises and facilitating corporate
relocation to low wage, low tax countries.
As a result, wage and salary workers are less organized and less influential; they work
longer and for less pay, suffer greater workplace insecurity and injuries – physical and
mental – fall into decline and disability, drop out of the system, die earlier and
poorer, and, in the process, provide unimaginable profits for the billionaire class . Even
their addiction and deaths provide opportunities for huge profit – as the Sackler Family,
manufacturers of Oxycontin, can attest.
The billionaires and their political acolytes argue that deeper regressive taxation would
increase investments and jobs. The data speaks otherwise. The bulk of repatriated profits
are directed to buy back stock to increase dividends for investors; they are not invested in
the productive economy. Lower taxes and greater profits for conglomerates means more buy-outs
and greater outflows to low wage countries. In real terms taxes are already less than half the
headline rate and are a major factor heightening the concentration of income and power –
both cause and effect.
Corporate elites, the billionaires in the Silicon Valley-Wall Street global complex are
relatively satisfied that their cherished inequalities are guaranteed and expanding under the
Demo-Republican Presidents- as the 'good times' roll on.
Away from the 'billionaire elite', the 'outsiders' – domestic capitalists –
clamor for greater public investment in infrastructure to expand the domestic economy, lower
taxes to increase profits, and state subsidies to increase the training of the labor force
while reducing funds for health care and public education. They are oblivious to the
contradiction.
In other words, the capitalist class as a whole, globalist and domestic alike, pursues the
same regressive policies, promoting inequalities while struggling over shares of the
profits. One hundred and fifty million wage and salaried taxpayers are excluded from the political
and social decisions that directly affect their income, employment, rates of taxation, and
political representation. They understand, or at least experience, how the class system works. Most workers know about
the injustice of the fake 'free trade' agreements and regressive tax regime, which weighs heavy
on the majority of wage and salary earners.
However, worker hostility and despair is directed against 'immigrants' and against the
'liberals' who have backed the import of cheap skilled and semi-skilled labor under the guise
of 'freedom'. This 'politically correct' image of imported labor covers up a policy, which has
served to lower wages, benefits and living standards for American workers, whether they are in
technology, construction or production. Rich conservatives, on the other hand, oppose
immigration under the guise of 'law and order' and to lower social expenditures – despite
that fact that they all use imported nannies, tutors, nurses, doctors and gardeners to service
their families. Their servants can always be deported when convenient.
The pro and anti-immigrant issue avoids the root cause for the economic exploitation and
social degradation of the working class – the billionaire owners operating in alliance
with the political elite.
In order to reverse the regressive tax practices and tax evasion, the low wage cycle and the
spiraling death rates resulting from narcotics and other preventable causes, which profit
insurance companies and pharmaceutical billionaires, class alliances need to be forged linking
workers, consumers, pensioners, students, the disabled, the foreclosed homeowners, evicted
tenants, debtors, the under-employed and immigrants as a unified political force.
Sooner said than done, but never tried! Everything and everyone is at stake: life, health
and happiness.
Ronald Reagan can be blamed for the excess of billionaires we now have. His lauding of the
entrepreneurial spirit and how we are all brave individual risk takers makes it seem you are
an envious chickensh$t if you advocate against unlimited assets.
But even Warren Buffet has come out for the estate tax saying something like now the
Forbes 400 now possesses total assets of 2.5 trillion in a 20 trillion economy when 40 years
ago they totaled in the millions. The legal rule against perpetuities generally used to limit
trusts to a lifetime of 100 years, now some states offer 1000 year trusts which will only
concretize an outlandishly high Gini coefficient(a measure of income inequality).
The rationale for lowering taxes and the untouchable rich is usually the trickle down theory
but, as one of these billionaires said, "How many pairs of pants can I buy?" It takes 274
years spending 10,000 a day to spend a billion dollars.
Better Henry Ford's virtuous circle than Ronald Reagan's entrepreneur.
Ban all billionaires. Bring back the union label. Otherwise .. what do we have to lose?
@Wally
"According to the US Internal Revenue Service, billionaire tax evasion amounts to $458
billion dollars in lost public revenues every year – almost a trillion dollars every
two years by this conservative estimate."
No, it's $458 billion that the government has not managed to steal.
https://www.ronpaul.com/taxes/
An income tax is the most degrading and totalitarian of all possible taxes. Its
implementation wrongly suggests that the government owns the lives and labor of the
citizens it is supposed to represent.
Tellingly, "a heavy progressive or graduated income tax" is Plank #2 of the Communist
Manifesto, which was written by Karl Marx and Friedrich Engels and first published in
1848.
To provide funding for the federal government, Ron Paul supports excise taxes,
non-protectionist tariffs, massive cuts in spending
"We could eliminate the income tax, replace it with nothing, and still fund the same
level of big government we had in the late 1990s. We don't need to "replace" the income tax
at all. I see a consumption tax as being a little better than the personal income tax, and
I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not
my goal. We can do better."
https://youtu.be/qI5lC4Z_T80
No, it's $458 billion that the government has not managed to steal.
There was a time that I would have agreed with that, and technically still get the point,
but what it really means is that the government merely allows the corporations which they
favor, subsidize, and bail out to keep the chump change they've stolen from the workers,
besides that which the government steals from the workers and hands to the corporations.
Corporations and government work hand in hand to fleece the herd and most of the herd
apparently think it's just fine.
Never forget that thanks to government, corporations socialize risk while privatizing
profit. They are partners in gangsterism.
Private, exclusive clinics and top medical care include the most advanced treatment and
safe and proven medication which allow billionaires and their family members to live longer
and healthier lives.
Sorry, I don't buy the notion that billionaires have access to some super-healthcare that
the rest of us don't know about. In the real world rich people notoriously waste a lot of
money on quackery, like the current fad of receiving plasma transfusions from young people as
a phony "anti-aging" treatment.
More likely the kinds of men who become billionaires just enjoy better health and
longevity for genetic reasons. They tend to have higher IQ's, for example, and some
scientists think that IQ correlates with "system integrity" in their bodies which just make
higher IQ people more resilient. Look up the growing body of research on cognitive
epidemiology.
I'm disappointed there was no mention of the "Billionaires" use of social media. They've
always controlled the press of course: startin' wars, hatin' on those guys, gettin' the blood
up, jailin' the 'bad guys', preaching an empty delusion of social justice propaganda, payin'
Ken Burns to propagandize and put a new coat of paint on the industrial scale killing of
Vietnam. Probably just in time for more violence.
Let's face it, many of the workin' stiff will blow a hedge fund manager and kneel before
the so-called free market corpse of Sam Walton but most importantly they'll grab their guns
outa' patriotic fervor and social media will be right there with 'em. "I love Elon Musk!"
It's a great thing we're watched and datamined for our own good – information is how
billionaires became billionaires along with a lot of help from the Government they usually
encourage you to dislike. Keep posting!
Rich conservatives, on the other hand, oppose immigration under the guise of 'law and
order' and to lower social expenditures – despite that fact that they all use imported
nannies, tutors, nurses, doctors and gardeners to service their families. Their servants can
always be deported when convenient.
BZZZZ – wrong. Rich conservative support massive immigration so they can get cheap
labor while simutaneously virtue signaling. I thought you just got done sayiong they don't
pay for the costs of the working poor? The middle class is who is against immigratioin. They
bear the burden and pay the taxes that support it.
But how "American" is the Brooks view, encapsulated in the sentence "The whole point of
America is that we are not a tribe. We are a universal nation, founded on universal principles,
attracting talented people from across the globe, active across the world on behalf of all
people who seek democracy and dignity"? Brooks holds up the American territorial frontier as a
hallmark of this ethos and of the American identity.
There are two problems with this. First, this conception of what it means to be American has
propelled the nation into a lot of folly, heartache, and international treachery. Consider the
implications of "founded on universal principles active across the world on behalf of all
people who seek democracy and dignity." Almost word for word, that's what was said when the
United States invaded Iraq, and how did that turn out? It unleashed a spate of instability and
violence in that country that have generated more than 175,000 civilian deaths.
Secondly, Brooks' description of the essence of the American identity is false. His
invocation of America's frontier -- as a proxy also for the country's "technological,
scientific, social and human frontiers" -- misses a fundamental reality of the American story.
America was in fact a tribal enterprise.
Brooks would have us believe that the United States began as a pristine crusader state on
behalf of global democracy and internationalism, a "universal nation" devoted to "diverse
hopefulness" as opposed to "fear-driven homogeneity." No, the people who ventured onto these
shores and then pushed westward inexorably were highly conscious not only of their religious
provenance but also of their cultural and ethnic heritage. They brutally pushed aside the
aboriginal peoples, declined to mix with them, and created societies that mirrored those of the
Old Country, even naming their towns and cities after those inhabited by their overseas
ancestors.
As more and more people arrived from places removed from the English Motherland and other
English-speaking regions (but almost entirely from Europe), those newcomers were abjured to
accept the established Anglo-Saxon elite and bend to its mores and sensibilities. In return the
elite gave the nation a relatively gentle and more or less disinterested stewardship based on a
strong sense of national service inculcated at WASP prep schools and universities such as Yale
and Harvard.
No one expressed more forcefully than Theodore Roosevelt this sentiment that newcomers must
assimilate into prevailing American culture, for that culture had no intention of adjusting to
the newcomers. "We freely extend the hand of welcome and good fellowship to every man," wrote
Roosevelt, "no matter what his creed and birthplace, who comes here honestly intent on becoming
a good United States citizen like the rest of us; but we have a right, and it is our duty, to
demand that he shall indeed become so, and shall not confuse the issues with which we are
struggling by introducing among us Old-World quarrels and prejudices."
As late as the early postwar period, the elite represented by Roosevelt still dominated many
of America's major national institutions -- the big banks, the media, the universities, the
foreign policy apparatus. Extensive academic treatment has been given to the ways by which the
waning Anglo-Saxon elite of America, still dominating foreign policy at the end of World War
II, created the postwar global structure that maintained stability for decades throughout the
world.
But there were frictions, of course, as new arrivals began to chafe under America's ancient
elite, and most of it was tribal. When the Irish of Boston reached such numbers that they could
upend the old WASP establishment of that city, it was tribal. When American Jews thrilled to
the creation of Israel and sought to bend U.S. policy toward today's special relationship, it
was tribal. Ethnic politics is tribal politics, and ethnic politics has become an ever more
powerful force within the American polity.
Brooks is not wrong when he says that much of the Trump constituency is driven by tribal
impulses. But he is wrong to say that these sensibilities are un-American and the result of
bigotry. Tribalism is a part of the American story, and Brooks can't shame it away. That he
wants to is encapsulated in this paragraph:
Today, the main enemy is not aliens; it's division -- between rich and poor, white and
black, educated and less educated, right and left. Where there is division there are fences.
Mobility is retarded and the frontier is destroyed. Trumpist populists want to widen the
divisions and rearrange the fences. They want to turn us into an old, settled and fearful
nation.
Aha, the true Brooks herein steps forward. It is the Trump constituency that is responsible
for all the divisions between rich and poor, white and black, educated and less educated, right
and left. He doesn't quite call these people deplorable, but he comes close. If they would just
stand down and give up their tribal ways, we could get back to being the America of our past
and our heritage -- a "universal nation" drawing unlimited immigrants to our shores in the
service of a national mission to spread "democracy and dignity" around the world. Sounds like a
return to George W. Bush.
This is policy folly based upon a myth of America. The divisions Brooks laments with such
invidious intent won't vanish until the fears and concerns of Trump voters are addressed in
ways that can alleviate, at least to some extent, those grievances. That's a reality that David
Brooks, for all his clever locutions, can't wish away.
Robert W. Merry, longtime Washington, D.C., journalist and publishing executive, is
editor of The American Conservative . His next book,President McKinley: Architect of the American Century, is due
out from Simon & Schuster in November.
IT is probably one of the most "neoliberalized" industry (even in comparison with
finance). So atomization of labor and "plantation economy" is a norm in IT. It occurs on
rather high level of wages, but with influx of foreign programmers and IT specialists (in the past)
and mass outsourcing (now) this is changing. Completion for good job positions is fierce. Dog eats
dog competition, the dream of neoliberals. Entry level jobs are already paying $15 an hour, if not
less.
Programming is a relatively rare talent, much like ability to play violin. Even amateur level is
challenging. On high level (developing large complex programs in a team and still preserving your individuality
and productivity ) it is extremely rare. Most of "commercial" programmers are able to produce only a
mediocre code (which might be adequate). Only a few programmers can excel if complex software projects.
Sometimes even performing solo. There is also a pathological breed of "programmer junkie"
( graphomania happens in programming
too ) who are able sometimes to destroy something large projects singlehandedly. That often happens
with open source projects after the main developer lost interest and abandoned the project.
It's good to allow children the chance to try their hand at coding when they otherwise may not had
that opportunity, But in no way that means that all of them can became professional programmers. No
way. Again the top level of programmers required position of a unique talent, much like top musical
performer talent.
Also to get a decent entry position you iether need to be extremely talented or graduate from Ivy
League university. When applicants are abundant, resume from less prestigious universities are not even
considered. this is just easier for HR to filter applications this way.
Also under neoliberalism cheap labor via H1B visas flood the market and depresses wages. Many Silicon
companies were so to say "Russian speaking in late 90th after the collapse of the USSR. Not offshoring
is the dominant way to offload the development to cheaper labor.
Notable quotes:
"... As software mediates more of our lives, and the power of Silicon Valley grows, it's tempting to imagine that demand for developers is soaring. The media contributes to this impression by spotlighting the genuinely inspiring stories of those who have ascended the class ladder through code. You may have heard of Bit Source, a company in eastern Kentucky that retrains coalminers as coders. They've been featured by Wired , Forbes , FastCompany , The Guardian , NPR and NBC News , among others. ..."
"... A former coalminer who becomes a successful developer deserves our respect and admiration. But the data suggests that relatively few will be able to follow their example. Our educational system has long been producing more programmers than the labor market can absorb. ..."
"... More tellingly, wage levels in the tech industry have remained flat since the late 1990s. Adjusting for inflation, the average programmer earns about as much today as in 1998. If demand were soaring, you'd expect wages to rise sharply in response. Instead, salaries have stagnated. ..."
"... Tech executives have pursued this goal in a variety of ways. One is collusion – companies conspiring to prevent their employees from earning more by switching jobs. The prevalence of this practice in Silicon Valley triggered a justice department antitrust complaint in 2010, along with a class action suit that culminated in a $415m settlement . Another, more sophisticated method is importing large numbers of skilled guest workers from other countries through the H1-B visa program. These workers earn less than their American counterparts, and possess little bargaining power because they must remain employed to keep their status. ..."
"... Guest workers and wage-fixing are useful tools for restraining labor costs. But nothing would make programming cheaper than making millions more programmers. ..."
"... Silicon Valley has been unusually successful in persuading our political class and much of the general public that its interests coincide with the interests of humanity as a whole. But tech is an industry like any other. It prioritizes its bottom line, and invests heavily in making public policy serve it. The five largest tech firms now spend twice as much as Wall Street on lobbying Washington – nearly $50m in 2016. The biggest spender, Google, also goes to considerable lengths to cultivate policy wonks favorable to its interests – and to discipline the ones who aren't. ..."
"... Silicon Valley is not a uniquely benevolent force, nor a uniquely malevolent one. Rather, it's something more ordinary: a collection of capitalist firms committed to the pursuit of profit. And as every capitalist knows, markets are figments of politics. They are not naturally occurring phenomena, but elaborately crafted contraptions, sustained and structured by the state – which is why shaping public policy is so important. If tech works tirelessly to tilt markets in its favor, it's hardly alone. What distinguishes it is the amount of money it has at its disposal to do so. ..."
"... The problem isn't training. The problem is there aren't enough good jobs to be trained for ..."
"... Everyone should have the opportunity to learn how to code. Coding can be a rewarding, even pleasurable, experience, and it's useful for performing all sorts of tasks. More broadly, an understanding of how code works is critical for basic digital literacy – something that is swiftly becoming a requirement for informed citizenship in an increasingly technologized world. ..."
"... But coding is not magic. It is a technical skill, akin to carpentry. Learning to build software does not make you any more immune to the forces of American capitalism than learning to build a house. Whether a coder or a carpenter, capital will do what it can to lower your wages, and enlist public institutions towards that end. ..."
"... Exposing large portions of the school population to coding is not going to magically turn them into coders. It may increase their basic understanding but that is a long way from being a software engineer. ..."
"... All schools teach drama and most kids don't end up becoming actors. You need to give all kids access to coding in order for some can go on to make a career out of it. ..."
"... it's ridiculous because even out of a pool of computer science B.Sc. or M.Sc. grads - companies are only interested in the top 10%. Even the most mundane company with crappy IT jobs swears that they only hire "the best and the brightest." ..."
"... It's basically a con-job by the big Silicon Valley companies offshoring as many US jobs as they can, or "inshoring" via exploitation of the H1B visa ..."
"... Masters is the new Bachelors. ..."
"... I taught CS. Out of around 100 graduates I'd say maybe 5 were reasonable software engineers. The rest would be fine in tech support or other associated trades, but not writing software. Its not just a set of trainable skills, its a set of attitudes and ways of perceiving and understanding that just aren't that common. ..."
"... Yup, rings true. I've been in hi tech for over 40 years and seen the changes. I was in Silicon Valley for 10 years on a startup. India is taking over, my current US company now has a majority Indian executive and is moving work to India. US politicians push coding to drive down wages to Indian levels. ..."
This month, millions of children returned to school. This year, an unprecedented number of them
will learn to code.
Computer science courses for children have proliferated rapidly in the past few years. A 2016
Gallup
report found that 40% of American schools now offer coding classes – up from only 25% a few years
ago. New York, with the largest public school system in the country, has
pledged to offer computer science to all 1.1 million students by 2025. Los Angeles, with the
second largest,
plans to do the same by 2020. And Chicago, the fourth largest, has gone further,
promising to make computer science a high school graduation requirement by 2018.
The rationale for this rapid curricular renovation is economic. Teaching kids how to code will
help them land good jobs, the argument goes. In an era of flat and falling incomes, programming provides
a new path to the middle class – a skill so widely demanded that anyone who acquires it can command
a livable, even lucrative, wage.
This narrative pervades policymaking at every level, from school boards to the government. Yet
it rests on a fundamentally flawed premise. Contrary to public perception, the economy doesn't actually
need that many more programmers. As a result, teaching millions of kids to code won't make them all
middle-class. Rather, it will proletarianize the profession by flooding the market and forcing wages
down – and that's precisely the point.
At its root, the campaign for code education isn't about giving the next generation a shot at
earning the salary of a Facebook engineer. It's about ensuring those salaries no longer exist, by
creating a source of cheap labor for the tech industry.
As software mediates more of our lives, and the power of Silicon Valley grows, it's tempting to
imagine that demand for developers is soaring. The media contributes to this impression by spotlighting
the genuinely inspiring stories of those who have ascended the class ladder through code. You may
have heard of Bit Source, a company in eastern Kentucky that retrains coalminers as coders. They've
been featured by
Wired
,
Forbes ,
FastCompany ,
The Guardian ,
NPR and
NBC
News , among others.
A former coalminer who becomes a successful developer deserves our respect and admiration. But
the data suggests that relatively few will be able to follow their example. Our educational system
has long been producing more programmers than the labor market can absorb. A
study by the Economic Policy Institute found that the supply of American college graduates with
computer science degrees is 50% greater than the number hired into the tech industry each year. For
all the talk of a tech worker shortage, many qualified graduates simply can't find jobs.
More tellingly, wage levels in the tech industry have remained flat since the late 1990s. Adjusting
for inflation, the average programmer earns about as much today as in 1998. If demand were soaring,
you'd expect wages to rise sharply in response. Instead, salaries have stagnated.
Still, those salaries are stagnating at a fairly high level. The Department of Labor estimates
that the median annual wage for computer and information technology occupations is $82,860 – more
than twice the national average. And from the perspective of the people who own the tech industry,
this presents a problem. High wages threaten profits. To maximize profitability, one must always
be finding ways to pay workers less.
Tech executives have pursued this goal in a variety of ways. One is collusion – companies conspiring
to prevent their employees from earning more by switching jobs. The prevalence of this practice in
Silicon Valley triggered a justice department
antitrust complaint in 2010, along with a class action suit that culminated in a $415m
settlement . Another, more sophisticated method is importing
large numbers of skilled guest workers from other countries through the H1-B visa program. These
workers earn less than their
American counterparts, and possess little bargaining power because they must remain employed to keep
their status.
Guest workers and wage-fixing are useful tools for restraining labor costs. But nothing would
make programming cheaper than making millions more programmers. And where better to develop
this workforce than America's schools? It's no coincidence, then, that the campaign for code education
is being orchestrated by the tech industry itself. Its primary instrument is Code.org, a nonprofit
funded by Facebook, Microsoft, Google and
others . In 2016, the organization spent
nearly $20m on training teachers, developing curricula, and lobbying policymakers.
Silicon Valley has been unusually successful in persuading our political class and much of the
general public that its interests coincide with the interests of humanity as a whole. But tech is
an industry like any other. It prioritizes its bottom line, and invests heavily in making public
policy serve it. The five largest tech firms now
spend twice as much as Wall Street on lobbying Washington – nearly $50m in 2016. The biggest
spender, Google, also goes to considerable lengths to
cultivate policy wonks favorable to its interests – and to
discipline the ones who aren't.
Silicon Valley
is not a uniquely benevolent force, nor a uniquely malevolent one. Rather, it's something more ordinary:
a collection of capitalist firms committed to the pursuit of profit. And as every capitalist knows,
markets are figments of politics. They are not naturally occurring phenomena, but elaborately crafted
contraptions, sustained and structured by the state – which is why shaping public policy is so important.
If tech works tirelessly to tilt markets in its favor, it's hardly alone. What distinguishes it is
the amount of money it has at its disposal to do so.
Money isn't Silicon Valley's only advantage in its
crusade to remake American education, however. It also enjoys a favorable ideological climate.
Its basic message – that schools alone can fix big social problems – is one that politicians of both
parties have been repeating for years. The far-fetched premise of neoliberal school reform is that
education can mend our disintegrating social fabric. That if we teach students the right skills,
we can solve poverty, inequality and stagnation. The school becomes an engine of economic transformation,
catapulting young people from challenging circumstances into dignified, comfortable lives.
This argument is immensely pleasing to the technocratic mind. It suggests that our core economic
malfunction is technical – a simple asymmetry. You have workers on one side and good jobs
on the other, and all it takes is training to match them up. Indeed, every president since Bill Clinton
has talked about training American workers to fill the "skills gap". But gradually, one mainstream
economist after another has come to realize what most workers have known for years: the gap doesn't
exist. Even Larry Summers has
concluded it's a myth.
The problem isn't training. The problem is there aren't enough good jobs to be trained for
. The solution is to make bad jobs better, by raising the minimum wage and making it easier for workers
to form a union, and to create more good jobs by investing for growth. This involves forcing business
to put money into things that actually grow the productive economy rather than
shoveling profits out to shareholders. It also means increasing public investment, so that people
can make a decent living doing socially necessary work like decarbonizing our energy system and restoring
our decaying infrastructure.
Everyone should have the opportunity to learn how to code. Coding can be a rewarding, even pleasurable,
experience, and it's useful for performing all sorts of tasks. More broadly, an understanding of
how code works is critical for basic digital literacy – something that is swiftly becoming a requirement
for informed citizenship in an increasingly technologized world.
But coding is not magic. It is a technical skill, akin to carpentry. Learning to build software
does not make you any more immune to the forces of American capitalism than learning to build a house.
Whether a coder or a carpenter, capital will do what it can to lower your wages, and enlist public
institutions towards that end.
Silicon Valley has been extraordinarily adept at converting previously uncommodified portions
of our common life into sources of profit. Our schools may prove an easy conquest by comparison.
"Everyone should have the opportunity to learn how to code. " OK, and that's what's being done.
And that's what the article is bemoaning. What would be better: teach them how to change tires
or groom pets? Or pick fruit? Amazingly condescending article.
However, training lots of people to be coders won't automatically result in lots of people
who can actually write good code. Nor will it give managers/recruiters the necessary skills
to recognize which programmers are any good.
A valid rebuttal but could I offer another observation? Exposing large portions of the school
population to coding is not going to magically turn them into coders. It may increase their basic
understanding but that is a long way from being a software engineer.
Just as children join art, drama or biology classes so they do not automatically become artists,
actors or doctors. I would agree entirely that just being able to code is not going to guarantee
the sort of income that might be aspired to. As with all things, it takes commitment, perseverance
and dogged determination. I suppose ultimately it becomes the Gattaca argument.
Fair enough, but, his central argument, that an overabundance of coders will drive wages in that
sector down, is generally true, so in the future if you want your kids to go into a profession
that will earn them 80k+ then being a "coder" is not the route to take. When coding is - like
reading, writing, and arithmetic - just a basic skill, there's no guarantee having it will automatically
translate into getting a "good" job.
This article lumps everyone in computing into the 'coder' bin, without actually defining what
'coding' is. Yes there is a glut of people who can knock together a bit of HTML and
JavaScript, but that is not really programming as such.
There are huge shortages of skilled
developers however; people who can apply computer science and engineering in terms of
analysis and design of software. These are the real skills for which relatively few people
have a true aptitude.
The lack of really good skills is starting to show in some terrible
software implementation decisions, such as Slack for example; written as a web app running in
Electron (so that JavaScript code monkeys could knock it out quickly), but resulting in awful
performance. We will see more of this in the coming years...
My brother is a programmer, and in his experience these coding exams don't test anything but
whether or not you took (and remember) a very narrow range of problems introduce in the first
years of a computer science degree. The entire hiring process seems premised on a range of
ill-founded ideas about what skills are necessary for the job and how to assess them in
people. They haven't yet grasped that those kinds of exams mostly test test-taking ability,
rather than intelligence, creativity, diligence, communication ability, or anything else that
a job requires beside coughing up the right answer in a stressful, timed environment without
outside resources.
I'm an embedded software/firmware engineer. Every similar engineer I've ever met has had the same
background - starting in electronics and drifting into embedded software writing in C and assembler.
It's virtually impossible to do such software without an understanding of electronics. When it
goes wrong you may need to get the test equipment out to scope the hardware to see if it's a hardware
or software problem. Coming from a pure computing background just isn't going to get you a job
in this type of work.
All schools teach drama and most kids don't end up becoming actors. You need to give all kids
access to coding in order for some can go on to make a career out of it.
Coding salaries will inevitably fall over time, but such skills give workers the option, once
they discover that their income is no longer sustainable in the UK, of moving somewhere more affordable
and working remotely.
Completely agree. Coding is a necessary life skill for 21st century but there are levels to every
skill. From basic needs for an office job to advanced and specialised.
Lots of people can code but very few of us ever get to the point of creating something new that
has a loyal and enthusiastic user-base. Everyone should be able to code because it is or will
be the basis of being able to create almost anything in the future. If you want to make a game
in Unity, knowing how to code is really useful. If you want to work with large data-sets, you
can't rely on Excel and so you need to be able to code (in R?). The use of code is becoming so
pervasive that it is going to be like reading and writing.
All the science and engineering graduates I know can code but none of them have ever sold a
stand-alone software. The argument made above is like saying that teaching everyone to write will
drive down the wages of writers. Writing is useful for anyone and everyone but only a tiny fraction
of people who can write, actually write novels or even newspaper columns.
Immigrants have always a big advantage over locals, for any company, including tech companies:
the government makes sure that they will stay in their place and never complain about low salaries
or bad working conditions because, you know what? If the company sacks you, an immigrant may be
forced to leave the country where they live because their visa expires, which is never going to
happen with a local. Companies always have more leverage over immigrants. Given a choice between
more and less exploitable workers, companies will choose the most exploitable ones.
Which is something that Marx figured more than a century ago, and why he insisted that socialism
had to be international, which led to the founding of the First International Socialist. If worker's
fights didn't go across country boundaries, companies would just play people from one country
against the other. Unfortunately, at some point in time socialists forgot this very important
fact.
SO what's wrong with having lots of people able to code? The only argument you seem to have is
that it'll lower wages. So do you think that we should stop teaching writing skills so that journalists
can be paid more? And no one os going to "force" kids into high-level abstract coding practices
in kindergarten, fgs. But there is ample empirical proof that young children can learn basic principles.
In fact the younger that children are exposed to anything, the better they can enhance their skills
adn knowlege of it later in life, and computing concepts are no different.
You're completely missing the point. Kids are forced into the programming field (even STEM as
a more general term), before they evolve their abstract reasoning. For that matter, you're not
producing highly skilled people, but functional imbeciles and a decent labor that will eventually
lower the wages.
Conspiracy theory? So Google, FB and others paying hundreds of millions of dollars for forming
a cartel to lower the wages is not true? It sounds me that you're sounding more like a 1969 denier
that Guardian is. Tech companies are not financing those incentives because they have a good soul.
Their primary drive has always been money, otherwise they wouldn't sell your personal data to
earn money.
But hey, you can always sleep peacefully when your kid becomes a coder. When he is 50, everyone
will want to have a Cobol, Ada programmer with 25 years of experience when you can get 16 year
old kid from a high school for 1/10 of a price. Go back to sleep...
it's ridiculous because even out of a pool of computer science B.Sc. or M.Sc. grads - companies
are only interested in the top 10%. Even the most mundane company with crappy IT jobs swears that
they only hire "the best and the brightest."
It's basically a con-job by the big Silicon Valley companies offshoring as many US jobs as
they can, or "inshoring" via exploitation of the H1B visa - so they can say "see, we don't
have 'qualified' people in the US - maybe when these kids learn to program in a generation." As
if American students haven't been coding for decades -- and saw their salaries plummet as the
H1B visa and Indian offshore firms exploded......
Dude, stow the attitude. I've tested code from various entities, and seen every kind of crap peddled
as gold.
But I've also seen a little 5-foot giggly lady with two kids, grumble a bit and save a $100,000
product by rewriting another coder's man-month of work in a few days, without any flaws or cracks.
Almost nobody will ever know she did that. She's so far beyond my level it hurts.
And yes, the author knows nothing. He's genuinely crying wolf while knee-deep in amused wolves.
The last time I was in San Jose, years ago , the room was already full of people with Indian
surnames. If the problem was REALLY serious, a programmer from POLAND was called in.
If you think fighting for a violinist spot is hard, try fighting for it with every spare violinist
in the world . I am training my Indian replacement to do my job right now
. At least the public can appreciate a good violin. Can you appreciate
Duff's device ?
So by all means, don't teach local kids how to think in a straight line, just in case they
make a dent in the price of wages IN INDIA.... *sheesh*
That's the best possible summarisation of this extremely dumb article. Bravo.
For those who don't know how to think of coding, like the article author, here's a few analogies
:
A computer is a box that replays frozen thoughts, quickly. That is all.
Coding is just the art of explaining. Anyone who can explain something patiently and clearly,
can code. Anyone who can't, can't.
Making hardware is very much like growing produce while blind. Making software is very much
like cooking that produce while blind.
Imagine looking after a room full of young eager obedient children who only do exactly, *exactly*,
what you told them to do, but move around at the speed of light. Imagine having to try to keep
them from smashing into each other or decapitating themselves on the corners of tables, tripping
over toys and crashing into walls, etc, while you get them all to play games together.
The difference between a good coder and a bad coder is almost life and death. Imagine a broth
prepared with ingredients from a dozen co-ordinating geniuses and one idiot, that you'll mass
produce. The soup is always far worse for the idiot's additions. The more cooks you involve, the
more chance your mass produced broth will taste bad.
People who hire coders, typically can't tell a good coder from a bad coder.
No you do it in your own time. If you're not prepared to put in long days IT is not for you in
any case. It was ever thus, but more so now due to offshoring - rather than the rather obscure
forces you seem to believe are important.
Sorry, offworldguy, but you're losing this one really badly. I'm a professional software engineer
in my 60's and I know lots of non-professionals in my age range who write little programs,
scripts and apps for fun. I know this because they often contact me for help or advice.
So you've now been told by several people in this thread that ordinary people do code for fun
or recreation. The fact that you don't know any probably says more about your network of friends
and acquaintances than about the general population.
This is one of the daftest articles I've come across in a long while.
If it's possible that so many kids can be taught to code well enough so that wages come down,
then that proves that the only reason we've been paying so much for development costs is the scarcity
of people able to do it, not that it's intrinsically so hard that only a select few could anyway.
In which case, there is no ethical argument for keeping the pools of skilled workers to some select
group. Anyone able to do it should have an equal opportunity to do it.
What is the argument for not teaching coding (other than to artificially keep wages high)? Why
not stop teaching the three R's, in order to boost white-collar wages in general?
Computing is an ever-increasingly intrinsic part of life, and people need to understand it at
all levels. It is not just unfair, but tantamount to neglect, to fail to teach children all the
skills they may require to cope as adults.
Having said that, I suspect that in another generation or two a good many lower-level coding jobs
will be redundant anyway, with such code being automatically generated, and "coders" at this level
will be little more than technicians setting various parameters. Even so, understanding the basics
behind computing is a part of understanding the world they live in, and every child needs that.
Suggesting that teaching coding is some kind of conspiracy to force wages down is well, it makes
the moon-landing conspiracy looks sensible by comparison.
I think it is important to demystify advanced technology, I think that has importance in its own
right.Plus, schools should expose kids to things which may spark their interest. Not everyone
who does a science project goes on years later to get a PhD, but you'd think that it makes it
more likely. Same as giving a kid some music lessons. There is a big difference between serious
coding and the basic steps needed to automate a customer service team or a marketing program,
but the people who have some mastery over automation will have an advantage in many jobs. Advanced
machines are clearly going to be a huge part of our future. What should we do about it, if not
teach kids how to understand these tools?
This is like arguing that teaching kids to write is nothing more than a plot to flood the market
for journalists. Teaching first aid and CPR does not make everyone a doctor.
Coding is an essential skill for many jobs already: 50 years ago, who would have thought you needed
coders to make movies? Being a software engineer, a serious coder, is hard. IN fact, it takes
more than technical coding to be a software engineer: you can learn to code in a week. Software
Engineering is a four year degree, and even then you've just started a career. But depriving kids
of some basic insights may mean they won't have the basic skills needed in the future, even for
controlling their car and house. By all means, send you kids to a school that doesn't teach coding.
I won't.
Did you learn SNOBOL, or is Snowball a language I'm not familiar with? (Entirely possible, as
an American I never would have known Extended Mercury Autocode existed we're it not for a random
book acquisition at my home town library when I was a kid.)
The tide that is transforming technology jobs from "white collar professional" into "blue collar
industrial" is part of a larger global economic cycle.
Successful "growth" assets inevitably transmogrify into "value" and "income" assets as they
progress through the economic cycle. The nature of their work transforms also. No longer focused
on innovation; on disrupting old markets or forging new ones; their fundamental nature changes
as they mature into optimising, cost reducing, process oriented and most importantly of all --
dividend paying -- organisations.
First, the market invests. And then, .... it squeezes.
Immature companies must invest in their team; must inspire them to be innovative so that they
can take the creative risks required to create new things. This translates into high skills, high
wages and "white collar" social status.
Mature, optimising companies on the other hand must necessarily avoid risks and seek variance-minimising
predictability. They seek to control their human resources; to eliminate creativity; to to make
the work procedural, impersonal and soulless. This translates into low skills, low wages and "blue
collar" social status.
This is a fundamental part of the economic cycle; but it has been playing out on the global
stage which has had the effect of hiding some of its' effects.
Over the past decades, technology knowledge and skills have flooded away from "high cost" countries
and towards "best cost" countries at a historically significant rate. Possibly at the maximum
rate that global infrastructure and regional skills pools can support. Much of this necessarily
inhumane and brutal cost cutting and deskilling has therefore been hidden by the tide of outsourcing
and offshoring. It is hard to see the nature of the jobs change when the jobs themselves are changing
hands at the same time.
The ever tighter ratchet of dehumanising industrialisation; productivity and efficiency continues
apace, however, and as our global system matures and evens out, we see the seeds of what we have
sown sail home from over the sea.
Technology jobs in developed nations have been skewed towards "growth" activities since for
the past several decades most "value" and "income" activities have been carried out in developing
nations. Now, we may be seeing the early preparations for the diffusion of that skewed, uneven
and unsustainable imbalance.
The good news is that "Growth" activities are not going to disappear from the world. They just
may not be so geographically concentrated as they are today. Also, there is a significant and
attention-worthy argument that the re-balancing of skills will result in a more flexible and performant
global economy as organisations will better be able to shift a wider variety of work around the
world to regions where local conditions (regulation, subsidy, union activity etc...) are supportive.
For the individuals concerned it isn't going to be pretty. And of course it is just another
example of the race to the bottom that pits states and public sector purse-holders against one
another to win the grace and favour of globally mobile employers.
As a power play move it has a sort of inhumanly psychotic inevitability to it which is quite
awesome to observe.
I also find it ironic that the only way to tame the leviathan that is the global free-market
industrial system might actually be effective global governance and international cooperation
within a rules-based system.
Both "globalist" but not even slightly both the same thing.
not just coders, it put even IT Ops guys into this bin. Basically good old - so you are working
with computers sentence I used to hear a lot 10-15 years ago.
You can teach everyone how to code but it doesn't necessarily mean everyone will be able to work
as one. We all learn math but that doesn't mean we're all mathematicians. We all know how to write
but we're not all professional writers.
I have a graduate degree in CS and been to a coding bootcamp. Not everyone's brain is wired
to become a successful coder. There is a particular way how coders think. Quality of a product
will stand out based on these differences.
Very hyperbolic is to assume that the profit in those companies is done by decreasing wages. In
my company the profit is driven by ability to deliver products to the market. And that is limited
by number of top people (not just any coder) you can have.
You realise that the arts are massively oversupplied and that most artists earn very little, if
anything? Which is sort of like the situation the author is warning about. But hey, he knows nothing.
Congratulations, though, on writing one of the most pretentious posts I've ever read on CIF.
So you know kids, college age people and software developers who enjoy doing it in their leisure
time? Do you know any middle aged mothers, fathers, grandparents who enjoy it and are not
software developers?
Sorry, I don't see coding as a leisure pursuit that is going to take off
beyond a very narrow demographic and if it becomes apparent (as I believe it will) that there
is not going to be a huge increase in coding job opportunities then it will likely wither in schools
too, perhaps replaced by music lessons.
No, because software developer probably fail more often than they succeed. Building anything worthwhile
is an iterative process. And it's not just the compiler but the other devs, oyur designer, your
PM, all looking at your work.
It's not shallow or lazy. I also work at a tech company and it's pretty common to do that across
job fields. Even in HR marketing jobs, we hire students who can't point to an internship or other
kind of experience in college, not simply grades.
A lot of people do find it fun. I know many kids - high school and young college age - who code
in the leisure time because they find it pleasurable to make small apps and video games. I myself
enjoy it too. Your argument is like saying since you don't like to read books in your leisure
time, nobody else must.
The point is your analogy isn't a good one - people who learn to code can not only enjoy it
in their spare time just like music, but they can also use it to accomplish all kinds of basic
things. I have a friend who's a software developer who has used code to program his Roomba to
vacuum in a specific pattern and to play Candy Land with his daughter when they lost the spinner.
Creativity could be added to your list. Anyone can push a button but only a few can invent a new
one.
One company in the US (after it was taken over by a new owner) decided it was more profitable
to import button pushers from off-shore, they lost 7 million customers (gamers) and had to employ
more of the original American developers to maintain their high standard and profits.
So similar to 500k a year people going to university ( UK) now when it used to be 60k people a
year( 1980). There was never enough graduate jobs in 1980 so can't see where the sudden increase
in need for graduates has come from.
They aren't really crucial pieces of technology except for their popularity
It's early in the day for me, but this is the most ridiculous thing I've read so far, and I
suspect it will be high up on the list by the end of the day.
There's no technology that is "crucial" unless it's involved in food, shelter or warmth. The
rest has its "crucialness" decided by how widespread its use is, and in the case of those 3 languages,
the answer is "very".
You (or I) might not like that very much, but that's how it is.
My benchmark would be if the average new graduate in the discipline earns more or less than one
of the "professions", Law, medicine, Economics etc. The short answer is that they don't. Indeed,
in my experience of professions, many good senior SW developers, say in finance, are paid markedly
less than the marketing manager, CTO etc. who are often non-technical.
My benchmark is not "has a car, house etc." but what does 10, 15 20 years of experience in
the area generate as a relative income to another profession, like being a GP or a corporate solicitor
or a civil servant (which is usually the benchmark academics use for pay scaling). It is not to
denigrate, just to say that markets don't always clear to a point where the most skilled are the
highest paid.
I was also suggesting that even if you are not intending to work in the SW area, being able
to translate your imagination into a program that reflects your ideas is a nice life skill.
Your assumption has no basis in reality. In my experience, as soon as Clinton ramped up H1Bs,
my employer would invite 6 same college/degree/curriculum in for interviews, 5 citizen,
1 foreign student and default offer to foreign student without asking interviewers a single question
about the interview. Eventually, the skipped the farce of interviewing citizens all together.
That was in 1997, and it's only gotten worse. Wall St's been pretty blunt lately. Openly admits
replacing US workers for import labor, as it's the "easiest" way to "grow" the economy, even though
they know they are ousting citizens from their jobs to do so.
"People who get Masters and PhD's in computer science" Feed western universities money, for degree
programs that would otherwise not exist, due to lack of market demand. "someone has a Bachelor's
in CS" As citizens, having the same college/same curriculum/same grades, as foreign grad. But
as citizens, they have job market mobility, and therefore are shunned. "you can make something
real and significant on your own" If someone else is paying your rent, food and student loans
while you do so.
While true, it's not the coders' fault. The managers and execs above them have intentionally created
an environment where these things are secondary. What's primary is getting the stupid piece of
garbage out the door for Q profit outlook. Ship it amd patch it.
Do most people find it fun? I can code. I don't find it 'fun'. Thirty years ago as a young graduate
I might have found it slightly fun but the 'fun' wears off pretty quick.
In my estimation PHP is an utter abomination. Python is just a little better but still very bad.
Ruby is a little better but still not at all good.
Languages like PHP, Python and JS are popular for banging out prototypes and disposable junk,
but you greatly overestimate their importance. They aren't really crucial pieces of technology
except for their popularity and while they won't disappear they won't age well at all. Basically
they are big long-lived fads. Java is now over 20 years old and while Java 8 is not crucial, the
JVM itself actually is crucial. It might last another 20 years or more. Look for more projects
like Ceylon, Scala and Kotlin. We haven't found the next step forward yet, but it's getting more
interesting, especially around type systems.
A strong developer will be able to code well in a half dozen languages and have fairly decent
knowledge of a dozen others. For me it's been many years of: Z80, x86, C, C++, Java. Also know
some Perl, LISP, ANTLR, Scala, JS, SQL, Pascal, others...
This makes people like me with 35 years of experience shipping products on deadlines up and down
every stack (from device drivers and operating systems to programming languages, platforms and
frameworks to web, distributed computing, clusters, big data and ML) so much more valuable. Been
there, done that.
It's just not true. In SV there's this giant vacuum created by Apple, Google, FB, etc. Other good
companies struggle to fill positions. I know from being on the hiring side at times.
Plenty of people? I don't know of a single person outside of my work which is teaming with programmers.
Not a single friend, not my neighbours, not my wife or her extended family, not my parents. Plenty
of people might do it but most people don't.
Agreed: by gifted I did not meant innate. It's more of a mix of having the interest, the persistence,
the time, the opportunity and actually enjoying that kind of challenge.
While some of those
things are to a large extent innate personality traits, others are not and you don't need max
of all of them, you just need enough to drive you to explore that domain.
That said, somebody that goes into coding purelly for the money and does it for the money alone
is extremely unlikelly to become an exceptional coder.
I'm as senior as they get and have interviewed quite a lot of programmers for several positions,
including for Technical Lead (in fact, to replace me) and so far my experience leads me to believe
that people who don't have a knack for coding are much less likely to expose themselves to many
different languages and techniques, and also are less experimentalist, thus being far less likely
to have those moments of transcending merely being aware of the visible and obvious to discover
the concerns and concepts behind what one does. Without those moments that open the door to the
next Universe of concerns and implications, one cannot do state transitions such as Coder to Technical
Designer or Technical Designer to Technical Architect.
Sure, you can get the title and do the things from the books, but you will not get WHY are
those things supposed to work (and when they will not work) and thus cannot adjust to new conditions
effectively and will be like a sailor that can't sail away from sight of the coast since he can't
navigate.
All this gets reflected in many things that enhance productivity, from the early ability to
quickly piece together solutions for a new problem out of past solutions for different problems
to, later, conceiving software architecture designs fittted to the typical usage pattern in the
industry for which the software is going to be made.
From the way our IT department is going, needing millions of coders is not the future. It'll be
a minority of developers at the top, and an army of low wage monkeys at the bottom who can troubleshoot
from a script - until AI comes along that can code faster and more accurately.
Interesting piece that's fundamentally flawed. I'm a software engineer myself. There is a reason
a University education of a minimum of three years is the base line for a junior developer or
'coder'.
Software engineering isn't just writing code. I would say 80% of my time is spent designing
and structuring software before I even touch the code.
Explaining software engineering as a discipline at a high level to people who don't understand
it is simple.
Most of us who learn to drive learn a few basics about the mechanics of a car. We know that
brake pads need to be replaced, we know that fuel is pumped into an engine when we press the gas
pedal. Most of us know how to change a bulb if it blows.
The vast majority of us wouldn't be able to replace a head gasket or clutch though. Just knowing
the basics isn't enough to make you a mechanic.
Studying in school isn't enough to produce software engineers. Software engineering isn't just
writing code, it's cross discipline. We also need to understand the science behind the computer,
we need too understand logic, data structures, timings, how to manage memory, security, how databases
work etc.
A few years of learning at school isn't nearly enough, a degree isn't enough on its own due
to the dynamic and ever evolving nature of software engineering. Schools teach technology that
is out of date and typically don't explain the science very well.
This is why most companies don't want new developers, they want people with experience and
multiple skills.
Programming is becoming cool and people think that because of that it's easy to become a skilled
developer. It isn't. It takes time and effort and most kids give up.
French was on the national curriculum when I was at school. Most people including me can't
hold a conversation in French though.
Ultimately there is a SKILL shortage. And that's because skill takes a long time, successes
and failures to acquire. Most people just give up.
This article is akin to saying 'schools are teaching basic health to reduce the wages of Doctors'.
It didn't happen.
There is a difference. When you teach people music you teach a skill that can be used for a lifetimes
enjoyment. One might sit at a piano in later years and play. One is hardly likely to 'do a bit
of coding' in ones leisure time.
The other thing is how good are people going to get at coding and how long will they retain
the skill if not used? I tend to think maths is similar to coding and most adults have pretty
terrible maths skills not venturing far beyond arithmetic. Not many remember how to solve a quadratic
equation or even how to rearrange some algebra.
One more thing is we know that if we teach people music they will find a use for it, if only
in their leisure time. We don't know that coding will be in any way useful because we don't know
if there will be coding jobs in the future. AI might take over coding but we know that AI won't
take over playing piano for pleasure.
If we want to teach logical thinking then I think maths has always done this and we should
make sure people are better at maths.
Am I missing something here? Being able to code is a skill that is a useful addition to the skill
armoury of a youngster entering the work place. Much like reading, writing, maths... Not only
is it directly applicable and pervasive in our modern world, it is built upon logic.
The important point is that American schools are not ONLY teaching youngsters to code, and
producing one dimensional robots... instead coding makes up one part of their overall skill set.
Those who wish to develop their coding skills further certainly can choose to do so. Those who
specialise elsewhere are more than likely to have found the skills they learnt whilst coding useful
anyway.
I struggle to see how there is a hidden capitalist agenda here. I would argue learning the
basics of coding is simply becoming seen as an integral part of the school curriculum.
The word "coding" is shorthand for "computer programming" or "software development" and it masks
the depth and range of skills that might be required, depending on the application.
This subtlety is lost, I think, on politicians and perhaps the general public. Asserting that
teaching lots of people to code is a sneaky way to commodotise an industry might have some truth
to it, but remember that commodotisation (or "sharing and re-use" as developers might call it)
is nothing new. The creation of freely available and re-usable software components and APIs has
driven innovation, and has put much power in the hands of developers who would not otherwise have
the skill or time to tackle such projects.
There's nothing to fear from teaching more people to "code", just as there's nothing to fear
from teaching more people to "play music". These skills simply represent points on a continuum.
There's room for everyone, from the kid on a kazoo all the way to Coltrane at the Village Vanguard.
I taught CS. Out of around 100 graduates I'd say maybe 5 were reasonable software engineers.
The rest would be fine in tech support or other associated trades, but not writing software. Its
not just a set of trainable skills, its a set of attitudes and ways of perceiving and understanding
that just aren't that common.
I can't understand the rush to teach coding in schools. First of all I don't think we are going
to be a country of millions of coders and secondly if most people have the skills then coding
is hardly going to be a well paid job. Thirdly you can learn coding from scratch after school
like people of my generation did. You could argue that it is part of a well rounded education
but then it is as important for your career as learning Shakespeare, knowing what an oxbow lake
is or being able to do calculus: most jobs just won't need you to know.
While you roll on the floor laughing, these countries will slowly but surely get their act together.
That is how they work. There are top quality coders over there and they will soon promoted into
a position to organise the others.
You are probably too young to remember when people laughed at electronic products when they
were made in Japan then Taiwan. History will repeat it's self.
Yes it's ironic and no different here in the UK. Traditionally Labour was the party focused on
dividing the economic pie more fairly, Tories on growing it for the benefit of all. It's now completely
upside down with Tories paying lip service to the idea of pay rises but in reality supporting
this deflationary race to the bottom, hammering down salaries and so shrinking discretionary spending
power which forces price reductions to match and so more pressure on employers to cut costs ...
ad infinitum.
Labour now favour policies which would cause an expansion across the entire economy through pay
rises and dramatically increased investment with perhaps more tolerance of inflation to achieve
it.
Not surprising if they're working for a company that is cold-calling people - which should be
banned in my opinion. Call centres providing customer support are probably less abuse-heavy since
the customer is trying to get something done.
I taught myself to code in 1974. Fortran, COBOL were first. Over the years as a aerospace engineer
I coded in numerous languages ranging from PLM, Snowball, Basic, and more assembly languages than
I can recall, not to mention deep down in machine code on more architectures than most know even
existed. Bottom line is that coding is easy. It doesn't take a genius to code, just another way
of thinking. Consider all the bugs in the software available now. These "coders", not sufficiently
trained need adult supervision by engineers who know what they are doing for computer systems
that are important such as the electrical grid, nuclear weapons, and safety critical systems.
If you want to program toy apps then code away, if you want to do something important learn engineering
AND coding.
Laughable. It takes only an above-average IQ to code. Today's coders are akin to the auto mechanics
of the 1950s where practically every high school had auto shop instruction . . . nothing but a
source of cheap labor for doing routine implementations of software systems using powerful code
libraries built by REAL software engineers.
I disagree. Technology firms are just like other firms. Why then the collusion not to pay more
to workers coming from other companies? To believe that they are anything else is naive. The author
is correct. We need policies that actually grow the economy and not leaders who cave to what the
CEOs want like Bill Clinton did. He brought NAFTA at the behest of CEOs and all it ended up doing
was ripping apart the rust belt and ushering in Trump.
So the media always needs some bad guys to write about, and this month they seem to have it in
for the tech industry. The article is BS. I interview a lot of people to join a large tech company,
and I can guarantee you that we aren't trying to find cheaper labor, we're looking for the best
talent.
I know that lots of different jobs have been outsourced to low cost areas, but these days the
top companies are instead looking for the top talent globally.
I see this article as a hit piece against Silicon Valley, and it doesn't fly in the face of
the evidence.
This has got to be the most cynical and idiotic social interest piece I have ever read in the
Guardian. Once upon a time it was very helpful to learn carpentry and machining, but now, even
if you are learning those, you will get a big and indispensable headstart if you have some logic
and programming skills. The fact is, almost no matter what you do, you can apply logic and programming
skills to give you an edge. Even journalists.
Yup, rings true. I've been in hi tech for over 40 years and seen the changes. I was in Silicon
Valley for 10 years on a startup. India is taking over, my current US company now has a majority
Indian executive and is moving work to India. US politicians push coding to drive down wages to
Indian levels.
On the bright side I am old enough and established enough to quit tomorrow,
its someone else's problem, but I still despise those who have sold us out, like the Clintons,
the Bushes, the Googoids, the Zuckerboids.
Sure markets existed before governments, but capitalism didn't, can't in fact. It needs the organs
of state, the banking system, an education system, and an infrastructure.
Then teach them other things but not coding! Here in Australia every child of school age has to
learn coding. Now tell me that everyone of them will need it? Look beyond computers as coding
will soon be automated just like every other job.
If you have never coded then you will not appreciate how labour intensive it is. Coders effectively
use line editors to type in, line by line, the instructions. And syntax is critical; add a comma
when you meant a semicolon and the code doesn't work properly. Yeah, we use frameworks and libraries
of already written subroutines, but, in the end, it is all about manually typing in the code.
Which is an expensive way of doing things (hence the attractions of 'off-shoring' the coding
task to low cost economies in Asia).
And this is why teaching kids to code is a waste of time.
Already, AI based systems are addressing the task of interpreting high level design models
and simply generating the required application.
One of the first uses templates and a smart chatbot to enable non-tech business people to build
their websites. By describe in non-coding terms what they want, the chatbot is able to assemble
the necessary components and make the requisite template amendments to build a working website.
Much cheaper than hiring expensive coders to type it all in manually.
It's early days yet, but coding may well be one of the big losers to AI automation along with
all those back office clerical jobs.
Teaching kids how to think about design rather than how to code would be much more valuable.
Thick-skinned? Just because you might get a few error messages from the compiler? Call centre
workers have to put up with people telling them to fuck off eight hours a day.
Spot on. Society will never need more than 1% of its people to code. We will need far more garbage
men. There are only so many (relatively) good jobs to go around and its about competing to get
them.
I'm a professor (not of computer science) and yet, I try to give my students a basic understanding
of algorithms and logic, to spark an interest and encourage them towards programming. I have no
skin in the game, except that I've seen unemployment first-hand, and want them to avoid it. The
best chance most of them have is to learn to code.
Educating youth does not drive wages down. It drives our economy up. China, India, and other
countries are training youth in programming skills. Educating our youth means that they will
be able to compete globally.
This is the standard GOP stand that we don't need to educate our youth, but instead fantasize
about high-paying manufacturing jobs miraculously coming back.
Many jobs, including new manufacturing jobs have an element of coding because they are
automated. Other industries require coding skills to maintain web sites and keep computer
systems running. Learning coding skills opens these doors.
Coding teaches logic, an essential thought process. Learning to code, like learning anything,
increases the brains ability to adapt to new environments which is essential to our survival
as a species.
We must invest in educating our youth.
"Contrary to public perception, the economy doesn't actually need that many more
programmers." This really looks like a straw man introducing a red herring. A skill can be
extremely valuable for those who do not pursue it as a full time profession.
The economy doesn't actually need that many more typists, pianists, mathematicians,
athletes, dietitians. So, clearly, teaching typing, the piano, mathematics, physical
education, and nutrition is a nefarious plot to drive down salaries in those professions.
None of those skills could possibly enrich the lives or enhance the productivity of builders,
lawyers, public officials, teachers, parents, or store managers.
A study by the Economic Policy Institute found that the supply of American college
graduates with computer science degrees is 50% greater than the number hired into the tech
industry each year.
You're assuming that all those people are qualified to work in software because they have
a piece of paper that says so, but that's not a valid assumption. The quality of computer
science degree courses is generally poor, and most people aren't willing or able to teach
themselves. Universities are motivated to award degrees anyway because if they only awarded
degrees to students who are actually qualified then that would reflect very poorly on their
quality of teaching.
A skills shortage doesn't mean that everyone who claims to have a skill gets hired and
there are still some jobs left over that aren't being done. It means that employers are
forced to hire people who are incompetent in order to fill all their positions. Many people
who get jobs in programming can't really do it and do nothing but create work for everyone
else. That's why most of the software you use every day doesn't work properly. That's why
competent programmers' salaries are still high in spite of the apparently large number of
"qualified" people who aren't employed as programmers.
Her income from teaching comes to $40,000 a year. Thats significantly more than most
adjuncts: a 2014 survey
found that the median income for adjuncts is only $22,041 a year, whereas for full-time faculty
it is $47,500. We take a kind of vow of poverty
Recentreports have revealed the
extent of poverty among professors, but the issue is longstanding. Several years ago, it was
thrust into the headlines in dramatic fashion when Mary-Faith Cerasoli, an adjunct professor of
Romance languages in her 50s, revealed she was homeless and protested outside the New York
state education department.
We take a kind of vow of poverty to continue practicing our profession, Debra Leigh Scott,
who is working on a documentary about
adjuncts , said in an email. We do it because we are dedicated to scholarship, to learning,
to our students and to our disciplines.
ass="inline-quote inline-icon inline-tone-fill">
A quarter of part-time college academics are said to be enrolled in public assistance
programs
Adjuncting has grown as funding for public universities has fallen by more
than a quarter between 1990 and 2009. Private institutions also recognize the allure of
part-time professors: generally they are cheaper than full-time staff, dont receive benefits or
support for their personal research, and their hours can be carefully limited so they do not
teach enough to qualify for health insurance.
This is why adjuncts have been called
the fast-food workers of the academic world : among labor experts adjuncting is defined as
precarious employment, a growing category that includes temping and sharing-economy gigs such
as driving for Uber. An American Sociological Association taskforce focusing on precarious
academic jobs, meanwhile, has suggested that faculty
employment is no longer a stable middle-class career .
... ... ...
If she were to lose her home her only hope, she says, would be
government-subsidized housing.
Most of my colleagues are unjustifiably ashamed, she said. They take this personally, as if
theyve failed, and Im always telling them, you havent failed, the system has failed
you."
A precarious situation
Even more desperate are those adjuncts in substandard living spaces who cannot afford to fix
them. Mindy Percival, 61, a lecturer with a doctorate from Columbia, teaches history at a state
college in Florida and, in her words, lives in a shack which is in the woods in middle of
nowhere.
"... Following Frances Fox Piven, "neoliberal economic policies" refers to the set of policies carried out, in the name of individualism and unfettered markets, for "the deregulation of corporations, and particularly of financial institutions; the rollback of public services and benefit programs; curbing labor unions; 'free trade' policies that would pry open foreign markets; and wherever possible the replacement of public programs with private markets" (Piven, 2007: 13). ..."
"... The case of the United States is particularly useful to examine because its elites have projected themselves as "first among equals" of the globalization project ( Bello , 2006), and it is the place of the Global North where the neoliberal project has been pursued most resolutely and has advanced the farthest. In other words, the experiences of American workers illuminate the affects of the neoliberal project in the Global North to the greatest extent, and suggest what will happen to working people in other northern countries should they accept their respective government's adoption of such policies. ..."
"... However, it is believed that the implementation of these neoliberal economic policies and the cultural wars to divert public attention are part of a larger, conscious political program by the elites within this country that is intended to prevent re-emergence of the collective solidarity among the American people that we saw during the late 1960s-early 1970s (see Piven, 2004, 2007) -- of which the internal breakdown of discipline within the US military, in Vietnam and around the world, was arguably the most crucial (see Moser, 1996; Zeiger, 2006) -- that ultimately challenged, however inchoately, the very structure of the established social order, both internationally and in the United States itself. ..."
Most contemporary discussions of globalization, and especially of the impact of neoliberal economic
policies, focus on the countries of the Global South (see, for example, Bond, 2005; Ellner and Hellinger,
eds., 2003; a number of articles in Harris, ed., 2006; Klein, 2007; Monthly Review, 2007;
and, among others, see Scipes, 1999, 2006b). Recent articles arguing that the globalization project
has receded and might be taking different approaches (Bello, 2006; Thornton, 2007) have also focused
on the Global South. What has been somewhat discussed (see Giroux, 2004; Piven, 2004; Aronowitz,
2005) but not systematically addressed, however, is what has been the impact of globalization and
especially related neoliberal economic policies on working people in a northern country?
[i]
This paper specifically addresses this question by looking at the impact of neoliberal economic
policies on working people in the United States . Following Frances Fox Piven, "neoliberal economic
policies" refers to the set of policies carried out, in the name of individualism and unfettered
markets, for "the deregulation of corporations, and particularly of financial institutions; the rollback
of public services and benefit programs; curbing labor unions; 'free trade' policies that would pry
open foreign markets; and wherever possible the replacement of public programs with private markets"
(Piven, 2007: 13).
The case of the United States is particularly useful to examine because its elites have projected
themselves as "first among equals" of the globalization project ( Bello , 2006), and it is the place
of the Global North where the neoliberal project has been pursued most resolutely and has advanced
the farthest. In other words, the experiences of American workers illuminate the affects of the neoliberal
project in the Global North to the greatest extent, and suggest what will happen to working people
in other northern countries should they accept their respective government's adoption of such policies.
However, care must be taken as to how this is understood. While sociologically-focused textbooks
(e.g., Aguirre and Baker, eds., 2008; Hurst, 2007) have joined together some of the most recent thinking
on social inequality -- and have demonstrated that inequality not only exists but is increasing --
this has been generally presented in a national context; in this case, within the United States.
And if they recognize that globalization is part of the reason for increasing inequality, it is generally
included as one of a set of reasons.
This paper argues that we simply cannot understand what is happening unless we put developments
within a global context: the United States effects, and is affected by, global processes.
Thus, while some of the impacts can be understood on a national level, we cannot ask related questions
as to causes -- or future consequences -- by confining our examination to a national level: we absolutely
must approach this from a global perspective (see Nederveen Pieterse, 2004, 2008).
This also must be put in historical perspective as well, although the focus in this piece will
be limited to the post-World War II world. Inequality within what is now the United States today
did not -- obviously -- arise overnight. Unquestionably, it began at least 400 years ago in Jamestown
-- with the terribly unequal and socially stratified society of England's colonial Virginia before
Africans were brought to North America (see Fischer, 1989), much less after their arrival in
1619, before the Pilgrims. Yet, to understand the roots of development of contemporary social
inequality in the US , we must understand the rise of " Europe " in relation to the rest of the world
(see, among others, Rodney, 1972; Nederveen Pieterse, 1989). In short, again, we have to understand
that the development of the United States has been and will always be a global project and, without
recognizing that, we simply cannot begin to understand developments within the United States .
We also have to understand the multiple and changing forms of social stratification and resulting
inequalities in this country. This paper prioritizes economic stratification, although is not limited
to just the resulting inequalities. Nonetheless, it does not focus on racial, gender or any other
type of social stratification. However, this paper is not written from the perspective that economic
stratification is always the most important form of stratification, nor from the perspective
that we can only understand other forms of stratification by understanding economic stratification:
all that is being claimed herein is that economic stratification is one type of social stratification,
arguably one of the most important types yet only one of several, and investigates the issue of economic
stratification in the context of contemporary globalization and the neoliberal economic policies
that have developed to address this phenomenon as it affects the United States.
Once this global-historical perspective is understood and after quickly suggesting in the "prologue"
why the connection between neoliberal economic policies and the affects on working people
in the United States has not been made usually, this paper focuses on several interrelated issues:
(1) it reports the current economic situation for workers in the United States; (2) it provides a
historical overview of US society since World War II; (3) it analyzes the results of US Government
economic policies; and (4) it ties these issues together. From that, it comes to a conclusion about
the affects of neoliberal economic policies on working people in the United States .
Prologue: Origins of neoliberal economic policies in the United States
As stated above, most of the attention directed toward understanding the impact of neoliberal
economic policies on various countries has been confined to the countries of the Global South. However,
these policies have been implemented in the United States as well. This arguably began in 1982, when
the Chairman of the US Federal Reserve, Paul Volcker, launched a vicious attack on inflation -- and
caused the deepest US recession since the Great Depression of the late 1920s-1930s.
However, these neoliberal policies have been implemented in the US perhaps more subtly than in
the Global South. This is said because, when trying to understand changes that continue to take place
in the United States, these economic policies are hidden "under" the various and sundry "cultural
wars" (around issues such as drugs, premarital sex, gun control, abortion, marriages for gays and
lesbians) that have been taking place in this country and, thus, not made obvious: most Americans,
and especially working people, are not aware of the changes detailed below.
[ii]
However, it is believed that the implementation of these neoliberal economic policies and
the cultural wars to divert public attention are part of a larger, conscious political program
by the elites within this country that is intended to prevent re-emergence of the collective solidarity
among the American people that we saw during the late 1960s-early 1970s (see Piven, 2004, 2007) --
of which the internal breakdown of discipline within the US military, in Vietnam and around
the world, was arguably the most crucial (see Moser, 1996; Zeiger, 2006) -- that ultimately challenged,
however inchoately, the very structure of the established social order, both internationally and
in the United States itself. Thus, we see both Democratic and Republican Parties in agreement
to maintain and expand the US Empire (in more neutral political science-ese, a "uni-polar world"),
but the differences that emerge within each party and between each party are generally confined to
how this can best be accomplished. While this paper focuses on the economic and social changes going
on, it should be kept in mind that these changes did not "just happen": conscious political decisions
have been made that produced social results (see Piven, 2004) that make the US experience -- at the
center of a global social order based on an "advanced" capitalist economy -- qualitatively different
from experiences in other more economically-developed countries.
So, what has been the impact of these policies on workers in the US?
1) The current situation for workers and growing economic inequality
Steven Greenhouse of The New York Times published a piece on September 4, 2006, writing
about entry-level workers, young people who were just entering the job market. Mr. Greenhouse noted
changes in the US economy; in fact, there have been substantial changes since early 2000, when the
economy last created many jobs.
Median incomes for families with one parent age 25-34 fell 5.9 per cent between 2000-2005.
It had jumped 12 per cent during the late '90s. (The median annual income for these families today
is $48,405.)
Between 2000-2005, entry-level wages for male college graduates fell by 7.3 per cent (to $19.72/hr)
Entry-level wages for female college graduates fell by 3.5 per cent (to $17.08)
Entry-level wages for male high school graduates fell by 3.3 per cent (to $10.93)
Entry-level wages for female high school graduates fell by 4.9 per cent (to $9.08)
Yet, the percentage drop in wages hides the growing gap between college and high school graduates.
Today, on average, college grads earn 45 per cent more than high school graduates, where the gap
had "only" been 23 per cent in 1979: the gap has doubled in 26 years (Greenhouse, 2006b).
A 2004 story in Business Week found that 24 per cent of all working Americans received
wages below the poverty line ( Business Week , 2004).
[iii] In January 2004, 23.5 million
Americans received free food from food pantries. "The surge for food demand is fueled by several
forces -- job losses, expired unemployment benefits, soaring health-care and housing costs, and the
inability of many people to find jobs that match the income and benefits of the jobs they had." And
43 million people were living in low-income families with children (Jones, 2004).
A 2006 story in Business Week found that US job growth between 2001-2006 was really based
on one industry: health care. Over this five-year period, the health-care sector has added 1.7 million
jobs, while the rest of the private sector has been stagnant. Michael Mandel, the economics editor
of the magazine, writes:
information technology, the great electronic promise of the 1990s, has turned into one of
the greatest job-growth disappointments of all time. Despite the splashy success of companies
such as Google and Yahoo!, businesses at the core of the information economy -- software, semi-conductors,
telecom, and the whole range of Web companies -- have lost more than 1.1 million jobs in the past
five years. These businesses employ fewer Americans today than they did in 1998, when the Internet
frenzy kicked into high gear (Mandel, 2006: 56) .
In fact, "take away health-care hiring in the US, and quicker than you can say cardiac bypass,
the US unemployment rate would be 1 to 2 percentage points higher" (Mandel, 2006: 57).
There has been extensive job loss in manufacturing. Over 3.4 million manufacturing jobs have been
lost since 1998, and 2.9 million of them have been lost since 2001. Additionally, over 40,000 manufacturing
firms have closed since 1999, and 90 per cent have been medium and large shops. In labor-import intensive
industries, 25 per cent of laid-off workers remain unemployed after six months, two-thirds of them
who do find new jobs earn less than on their old job, and one-quarter of those who find new jobs
"suffer wage losses of more than 30 percent" (AFL-CIO, 2006a: 2).
The AFL-CIO details the US job loss by manufacturing sector in the 2001-05 period:
Computer and electronics: 543,000 workers or 29.2 per cent
Semiconductor and electronic components: 260,100 or 36.7 per cent
Electrical equipment and appliances: 152,500 or 26 per cent
Vehicle parts: 153,400 or 18.6 per cent
Machinery: 289,400 or 19.9 per cent
Fabricated metal products: 235,200 or 13.3 per cent
Primary metals: 144,800 or 23.5 per cent
Transportation equipment: 246,300 or 12.1 per cent
Furniture products: 58,500 or 13.4 per cent
Textile mills: 158,500 or 43.1 per cent
Apparel 220,000 or 46.6 per cent
Leather products: 24,700 or 38.3 per cent
Printing: 159,300 or 19.9 per cent
Paper products: 122,600 or 20.4 per cent
Plastics and rubber products: 141,400 or 15 per cent
Chemicals: 94,900 or 9.7 per cent
Aerospace: 46,900 or 9.1 per cent
Textiles and apparel declined by 870,000 jobs 1994-2006, a decline of 65.4 per cent (AFL-CIO,
2006a: 2).
As of the end of 2005, only 10.7 per cent of all US employment was in manufacturing -- down from
21.6 per cent at its height in 1979 -- in raw numbers, manufacturing employment totaled 19.426 million
in 1979, 17.263 million in 2000, and 14.232 million in 2005.
[iv] The number of production workers
in this country at the end of 2005 was 9.378 million.
[v] This was only slightly above
the 9.306 million production workers in 1983, and was considerably below the 11.463 million as recently
as 2000 (US Bureau of Labor Statistics, 2006b). As one writer puts it, this is "the biggest long-term
trend in the economy: the decline of manufacturing." He notes that employment in the durable goods
(e.g., cars and cable TV boxes) category of manufacturing has declined from 19 per cent of all employment
in 1965 to 8 per cent in 2005 (Altman, 2006). And at the end of 2006, only 11.7 per cent of all manufacturing
workers were in unions (US Bureau of Labor Statistics, 2007).
In addition, in 2004 and 2005, "the real hourly and weekly wages of US manufacturing workers have
fallen 3 per cent and 2.2 per cent respectively" (AFL-CIO, 2006a: 2).
The minimum wage level went unchanged for nine years: until recently when there was a small increase
-- to $5.85 an hour on July 24, 2007 -- US minimum wage had remained at $5.15 an hour since September
1, 1997 . During that time, the cost of living rose 26 percent. After adjusting for inflation, this
was the lowest level of the minimum wage since 1955. At the same time, the minimum wage was only
31 per cent of the average pay of non-supervisory workers in the private sector, which is the lowest
share since World War II (Bernstein and Shapiro, 2006).
In addition to the drop in wages at all levels, fewer new workers get health care benefits with
their jobs: [vi] in 2005, 64 per
cent of all college grads got health coverage in entry-level jobs, where 71 per cent had gotten it
in 2000 -- a 7 per cent drop in just five years. Over a longer term, we can see what has happened
to high school grads: in 1979, two-thirds of all high school graduates got health care coverage in
entry-level jobs, while only one-third do today (Greenhouse, 2006b). It must be kept in mind that
only about 28 per cent of the US workforce are college graduates -- most of the work force only has
a high school degree, although a growing percentage of them have some college, but not college degrees.
Because things have gotten so bad, many young adults have gotten discouraged and given up. The
unemployment rate is 4.4 per cent for ages 25-34, but 8.2 per cent for workers 20-24. (Greenhouse,
2006b).
Yet things are actually worse than that. In the US , unemployment rates are artificially low.
If a person gets laid off and gets unemployment benefits -- which fewer and fewer workers even get
-- they get a check for six months. If they have not gotten a job by the end of six months -- and
it is taking longer and longer to get a job -- and they have given up searching for work, then not
only do they loose their unemployment benefits, but they are no longer counted as unemployed: one
doesn't even count in the statistics!
A report from April 2004 provides details. According to the then-head of the US Federal Reserve
System, Alan Greenspan, "the average duration of unemployment increased from twelve weeks in September
2000 to twenty weeks in March [2004]" (quoted in Shapiro, 2004: 4). In March 2004, 354,000 jobs workers
had exhausted their unemployment benefits, and were unable to get any additional federal unemployment
assistance: Shapiro (2004: 1) notes, "In no other month on record, with data available back to 1971,
have there been so many 'exhaustees'."
Additionally, although it's rarely reported, unemployment rates vary by racial grouping. No matter
what the unemployment rate is, it really only reflects the rate of whites who are unemployed because
about 78 per cent of the workforce is white. However, since 1954, the unemployment rate of African-Americans
has always been more than twice that of whites, and Latinos are about 1 1/2 times that of whites.
So, for example, if the overall rate is five percent, then it's at least ten per cent for African-Americans
and 7.5 per cent for Latinos.
However, most of the developments presented above -- other than the racial affects of unemployment
-- have been relatively recent. What about longer term? Paul Krugman, a Nobel Prize-winning Princeton
University economist who writes for The New York Times, pointed out these longer term affects:
non-supervisory workers make less in real wages today (2006) than they made in 1973! So, after inflation
is taken out, non-supervisory workers are making less today in real terms that their contemporaries
made 33 years ago (Krugman, 2006b). Figures provided by Stephen Franklin -- obtained from the US
Bureau of Statistics, and presented in 1982 dollars -- show that a production worker in January 1973
earned $9.08 an hour -- and $8.19 an hour in December 2005 (Franklin, 2006). Workers in 2005 also
had less long-term job security, fewer benefits, less stable pensions (when they have them), and
rising health care costs. [vii]
In short, the economic situation for "average Americans" is getting worse. A front-page story
in the Chicago Tribune tells about a worker who six years ago was making $29 an hour, working
at a nuclear power plant. He got laid off, and now makes $12.24 an hour, working on the bottom tier
of a two-tiered unionized factory owned by Caterpillar, the multinational earth moving equipment
producer, which is less than half of his old wages. The article pointed out, "Glued to a bare bones
budget, he saved for weeks to buy a five-pack of $7 T-shirts" ( Franklin , 2006).
As Foster and Magdoff point out:
Except for a small rise in the late 1990s, real wages have been sluggish for decades. The
typical (median-income) family has sought to compensate for this by increasing the number of jobs
and working hours per household. Nevertheless, the real (inflation-adjusted) income of the typical
household fell for five years in a row through 2004 (Foster and Magdoff, 2009: 28).
A report by Workers Independent News (WIN) stated that while a majority of metropolitan
areas have regained the 2.6 million jobs lost during the first two years of the Bush Administration,
"the new jobs on average pay $9,000 less than the jobs replaced," a 21 per cent decline from $43,629
to $34,378. However, WIN says that "99 out of the 361 metro areas will not recover jobs before 2007
and could be waiting until 2015 before they reach full recovery" (Russell, 2006).
At the same time, Americans are going deeper and deeper into debt. At the end of 2000, total US
household debt was $7.008 trillion, with home mortgage debt being $4.811 trillion and non-mortgage
debt $1.749 trillion; at the end of 2006, comparable numbers were a total of $12.817 trillion; $9.705
trillion (doubling since 2000); and $2.431 trillion (US Federal Reserve, 2007-rounding by author).
Foster and Magdoff (2009: 29) show that this debt is not only increasing, but based on figures from
the Federal Reserve, that debt as a percentage of disposable income has increased overall from 62%
in 1975 to 96.8% in 2000, and to 127.2% in 2005.
Three polls from mid-2006 found "deep pessimism among American workers, with most saying that
wages were not keeping pace with inflation, and that workers were worse off in many ways than a generation
ago" (Greenhouse, 2006a). And, one might notice, nothing has been said about increasing gas prices,
lower home values, etc. The economic situation for most working people is not looking pretty.
In fact, bankruptcy filings totaled 2.043 million in 2005, up 31.6 per cent from 2004 (Associated
Press, 2006), before gas prices went through the ceiling and housing prices began falling in mid-2006.
Yet in 1998, writers for the Chicago Tribune had written, " the number of personal bankruptcy
filings skyrocketed 19.5 per cent last year, to an all-time high of 1,335,053, compared with 1,117,470
in 1996" (Schmeltzer and Gruber, 1998).
And at the same time, there were 37 million Americans in poverty in 2005, one of out every eight.
Again, the rates vary by racial grouping: while 12.6 per cent of all Americans were in poverty, the
poverty rate for whites was 8.3 percent; for African Americans, 24.9 per cent were in poverty, as
were 21.8 per cent of all Latinos. (What is rarely acknowledged, however, is that 65 per cent of
all people in poverty in the US are white.) And 17.6 per cent of all children were in poverty (US
Census Bureau, 2005).
What about the "other half"? This time, Paul Krugman gives details from a report by two Northwestern
University professors, Ian Dew-Becker and Robert Gordon, titled "Where Did the Productivity Growth
Go?" Krugman writes:
Between 1973 and 2001, the wage and salary income of Americans at the 90th percentile
of the income distribution rose only 34 percent, or about 1 per cent per year. But income at the
99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income
at the 99.99th percentile rose 497 percent. No, that's not a misprint. Just to give you a sense
of who we're talking about: the nonpartisan Tax Policy Center estimates that this year, the 99th
percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of
$1,672,726. The Center doesn't give a number for the 99.99th percentile, but it's probably well
over $6 million a year (Krugman, 2006a) .
But how can we understand what is going on? We need to put take a historical approach to understand
the significance of the changes reported above.
(2) A historical look at the US social order since World War II
When considering the US situation, it makes most sense to look at "recent" US developments, those
since World War II. Just after the War, in 1947, the US population was about six per cent of the
world's total. Nonetheless, this six per cent produced about 48 per cent of all goods and services
in the world! [viii] With Europe
and Japan devastated, the US was the only industrialized economy that had not been laid waste. Everybody
needed what the US produced -- and this country produced the goods, and sent them around the world.
At the same time, the US economy was not only the most productive, but the rise of the industrial
union movement in the 1930s and '40s -- the CIO (Congress of Industrial Organizations) -- meant that
workers had some power to demand a share of the wealth produced. In 1946, just after the war, the
US had the largest strike wave in its history: 116,000,000 production days were lost in early 1946,
as industry-wide strikes in auto, steel, meat packing, and the electrical industry took place across
the United States and Canada , along with smaller strikes in individual firms. Not only that, but
there were general strikes that year in Oakland , California and Stamford , Connecticut . Workers
had been held back during the war, but they demonstrated their power immediately thereafter (Lipsitz,
1994; Murolo and Chitty, 2001). Industry knew that if it wanted the production it could sell, it
had to include unionized workers in on the deal.
It was this combination -- devastated economic markets around the world and great demand for goods
and services, the world's most developed industrial economy, and a militant union movement -- that
combined to create what is now known as the "great American middle class."
[ix]
To understand the economic impact of these factors, changes in income distribution in US society
must be examined. The best way to illuminate this is to assemble family data on income or wealth
[x] -- income data is more available,
so that will be used; arrange it from the smallest amount to the largest; and then to divide the
population into fifths, or quintiles. In other words, arrange every family's annual income from the
lowest to the highest, and divide the total number of family incomes into quintiles or by 20 percents
(i.e., fifths). Then compare changes in the top incomes for each quintile. By doing so, one can then
observe changes in income distribution over specified time periods.
The years between 1947 and 1973 are considered the "golden years" of the US society.
[xi] The values are presented
in 2005 dollars, so that means that inflation has been taken out: these are real dollar values,
and that means these are valid comparisons.
Figure 1: US family income, in US dollars, growth and istribution, by quintile, 1947-1973 compared
to 1973-2001, in 2005 dollars
Source: US Commerce Department, Bureau of the Census (hereafter, US Census Bureau) at
www.census.gov/hhes/www/income/histinc/f01ar.html
. All dollar values converted to 2005 dollars by US Census Bureau, removing inflation and comparing
real values. Differences and percentages calculated by author. Percentages shown in both rows labeled
"Difference" show the dollar difference as a percentage of the first year of the comparison.
Data for the first period, 1947-1973 -- the data above the grey line -- shows there was
considerable real economic growth for each quintile . Over the 26-year period, there was approximately
100 per cent real economic growth for the incomes at the top of each quintile, which meant incomes
doubled after inflation was removed; thus, there was significant economic growth in the society.
And importantly, this real economic growth was distributed fairly evenly . The data in
the fourth line (in parentheses) is the percentage relationship between the difference between 1947-1973
real income when compared to the 1947 real income, with 100 per cent representing a doubling of real
income: i.e., the difference for the bottom quintile between 1947 and 1973 was an increase
of $11,386, which is 97 per cent more than $11,758 that the top of the quintile had in 1947. As can
be seen, other quintiles also saw increases of roughly comparable amounts: in ascending order, 100
percent, 107 percent, 101 percent, and 91 percent. In other words, the rate of growth by quintile
was very similar across all five quintiles of the population.
When looking at the figures for 1973-2001, something vastly different can be observed. This is
the section below the grey line. What can be seen? First, economic growth has slowed considerably:
the highest rate of growth for any quintile was that of 58 per cent for those who topped the
fifth quintile, and this was far below the "lagger" of 91 per cent of the earlier period.
Second, of what growth there was, it was distributed extremely unequally . And the growth
rates for those in lower quintiles were generally lower than for those above them: for the bottom
quintile, their real income grew only 14 per cent over the 1973-2001 period; for the second quintile,
19 percent; for the third, 29 percent; for the fourth, 42 percent; and for the 80-95 percent, 58
percent: loosely speaking, the rich are getting richer, and the poor poorer.
Why the change? I think two things in particular. First, as industrialized countries recovered
from World War II, corporations based in these countries could again compete with those from the
US -- first in their own home countries, and then through importing into the US , and then ultimately
when they invested in the United States . Think of Toyota : they began importing into the US in the
early 1970s, and with their investments here in the early '80s and forward, they now are the largest
domestic US auto producer.
Second cause for the change has been the deterioration of the American labor movement: from 35.3
per cent of the non-agricultural workforce in unions in 1954, to only 12.0 per cent of all American
workers in unions in 2006 -- and only 7.4 per cent of all private industry workers are unionized,
which is less than in 1930!
This decline in unionization has a number of reasons. Part of this deterioration has been the
result of government policies -- everything from the crushing of the air traffic controllers when
they went on strike by the Reagan Administration in 1981, to reform of labor law, to reactionary
appointments to the National Labor Relations Board, which oversees administration of labor law. Certainly
a key government policy, signed by Democratic President Bill Clinton, has been the North American
Free Trade Act or NAFTA. One analyst came straight to the point:
Since [NAFTA] was signed in 1993, the rise in the US trade deficit with Canada and Mexico
through 2002 has caused the displacement of production that supported 879,280 US jobs. Most of
these lost jobs were high-wage positions in manufacturing industries. The loss of these jobs is
just the most visible tip of NAFTA's impact on the US economy. In fact, NAFTA has also contributed
to rising income inequality, suppressed real wages for production workers, weakened workers' collective
bargaining powers and ability to organize unions, and reduced fringe benefits (Scott, 2003:
1).
These attacks by elected officials have been joined by the affects due to the restructuring of
the economy. There has been a shift from manufacturing to services. However, within manufacturing,
which has long been a union stronghold, there has been significant job loss: between July 2000 and
January 2004, the US lost three million manufacturing jobs, or 17.5 percent, and 5.2 million since
the historical peak in 1979, so that "Employment in manufacturing [in January 2004] was its lowest
since July 1950" (CBO, 2004). This is due to both outsourcing labor-intensive production overseas
and, more importantly, technological displacement as new technology has enabled greater production
at higher quality with fewer workers in capital-intensive production (see Fisher, 2004). Others have
blamed burgeoning trade deficits for the rise: " an increasing share of domestic demand for manufacturing
output is satisfied by foreign rather than domestic producers" (Bivens, 2005).
[xiii] Others have even attributed
it to changes in consumer preferences (Schweitzer and Zaman, 2006). Whatever the reason, of the 50
states, only five (Nevada, North Dakota, Oregon, Utah, and Wyoming) did not see any job loss in manufacturing
between 1993-2003, yet 37 lost between 5.6 and 35.9 per cent of their manufacturing jobs during this
period (Public Policy Institute, 2004).
However, part of the credit for deterioration of the labor movement must be given to the labor
movement itself: the leadership has been simply unable to confront these changes and, at the same
time, they have consistently worked against any independent action by rank-and-file members.
[xiv]
However, it must be asked: are the changes in the economy presented herein merely statistical
manipulations, or is this indicating something real?
This point can be illustrated another way: by using CAGR, the Compound Annual Growth Rate. This
is a single number that is computed, based on compounded amounts, across a range of years, to come
up with an average number to represent the rate of increase or decrease each year across the entire
period. This looks pretty complex, but it is based on the same idea as compound interest used in
our savings accounts: you put in $10 today and (this is obviously not a real example) because you
get ten per cent interest, so you have $11 the next year. Well, the following year, interest is not
computed off the original $10, but is computed on the $11. So, by the third year, from your $10,
you now have $12.10. Etc. And this is what is meant by the Compound Annual Growth Rate: this is average
compound growth by year across a designated period.
Based on the numbers presented above in Figure 1, the author calculated the Compound Annual Growth
Rate by quintiles (Figure 2). The annual growth rate has been calculated for the first period, 1947-1973,
the years known as the "golden years" of US society. What has happened since then? Compare results
from the 1947-73 period to the annual growth rate across the second period, 1973-2001, again calculated
by the author.
Figure 2: Annual percentage of family income growth, by quintile, 1947-1973 compared to 1973-2001
What we can see here is that while everyone's income was growing at about the same rate in the
first period -- between 2.51 and 2.84 per cent annually -- by the second period, not only had growth
slowed down across the board, but it grew by very different rates: what we see here, again,
is that the rich are getting richer, and the poor poorer.
If these figures are correct, a change over time in the percentage of income received by each
quintile should be observable. Ideally, if the society were egalitarian, each 20 per cent of the
population would get 20 per cent of the income in any one year. In reality, it differs. To understand
Figure 3, below, one must not only look at the percentage of income held by a quintile across the
chart, comparing selected year by selected year, but one needs to look to see whether a quintile's
share of income is moving toward or away from the ideal 20 percent.
Figure 3: Percentage of family income distribution by quintile, 1947, 1973, 2001.
Population by quintiles
1947
1973
2001
Top fifth (lower limit of top 5percent, or 95th Percentile)-- $184,500
[xv]
Unfortunately, much of the data available publicly ended in 2001. However, in the summer of 2007,
after years of not releasing data any later than 2001, the Census Bureau released income data up
to 2005. It allows us to examine what has taken place regarding family income inequality during the
first four years of the Bush Administration.
Figure 4: US family income, in US dollars, growth and distribution, by quintile,
2001-2005, 2005 US dollars
Lowest 20%
Second 20%
Middle 20%
Fourth 20%
Lowest level of top 5%
2001
$26,467
$45,855
$68,925
$103,828
$180,973
2005
$25,616
$45,021
$68,304
$103,100
$184,500
Difference
(4 years)
-$851
(-3.2%)
-$834
(-1.8%)
-$621
(-.01%)
-$728
(-.007%)
$3,527
(1.94%)
Source: US Census Bureau at
www.census.gov/hhes/www/income/histinc/f01ar.html
. (Over time, the Census Bureau refigures these amounts, so they have subsequently converted
amounts to 2006 dollar values. These values are from their 2005 dollar values, and were calculated
by the Census Bureau.) Differences and percentages calculated by author.
Thus, what we've seen under the first four years of the Bush Administration is that for at most
Americans, their economic situation has worsened: not only has over all economic growth for any quintile
slowed to a minuscule 1.94 per cent at the most, but that the bottom 80 per cent actually lost income;
losing money (an absolute loss), rather than growing a little but falling further behind the top
quintile (a relative loss). Further, the decrease across the bottom four quintiles has been suffered
disproportionately by those in the lowest 40 per cent of the society.
This can perhaps be seen more clearly by examining CAGR rates by period.
We can now add the results of the 2001-2005 period share of income by quintile to our earlier
chart:
Figure 5: Percentage of income growth per year by percentile, 1947-2005
As can be seen, the percentage of family income at each of the four bottom quintiles is less in
2005 than in 1947; the only place there has been improvement over this 58-year period is at the 95th
percentile (and above).
Figure 6: Percentage of family income distribution by quintile, 1947, 1973, 2001, 2005.
Population by quintiles
1947
1973
2001
2005
Top fifth (lower limit of top 5percent, or 95th Percentile)-- $184,500
What has been presented so far, regarding changes in income distribution, has been at the group
level; in this case, quintile by quintile. It is time now to see how this has affected the society
overall.
Sociologists and economists use a number called the Gini index to measure inequality. Family income
data has been used so far, and we will continue using it. A Gini index is fairly simple to use. It
measures inequality in a society. A Gini index is generally reported in a range between 0.000 and
1.000, and is written in thousandths, just like a winning percentage mark: three digits after the
decimal. And the higher the Gini score, the greater the inequality.
Looking at the Gini index, we can see two periods since 1947, when the US Government began computing
the Gini index for the country. From 1947-1968, with yearly change greater or smaller, the trend
is downward, indicating reduced inequality: from .376 in 1947 to .378 in 1950, but then downward
to .348 in 1968. So, again, over the first period, the trend is downward.
What has happened since then? From the low point in 1968 of .348, the trend has been upward. In
1982, the Gini index hit .380, which was higher than any single year between 1947-1968, and the US
has never gone below .380 since then. By 1992, it hit .403, and we've never gone back below .400.
In 2001, the US hit .435. But the score for 2005 has only recently been published: .440 (source:
http://www.census.gov/hhes/www/income/histinc/f04.html
). So, the trend is getting worse, and with the policies established under George W. Bush, I
see them only continuing to increase in the forthcoming period. [And by the way, this increasing
trend has continued under both the Republicans and the Democrats, but since the Republicans have
controlled the presidency for 18 of the last 26 years (since 1981), they get most of the credit --
but let's not forget that the Democrats have controlled Congress across many of those years, so they,
too, have been an equal opportunity destroyer!]
However, one more question must be asked: how does this income inequality in the US, compare to
other countries around the world? Is the level of income inequality comparable to other "developed"
societies, or is it comparable to "developing" countries?
We must turn to the US Central Intelligence Agency (CIA) for our data. The CIA computes Gini scores
for family income on most of the countries around the world, and the last time checked in 2007 (August
1), they had data on 122 countries on their web page and these numbers had last been updated on July
19, 2007 (US Central Intelligence Agency, 2007). With each country listed, there is a Gini score
provided. Now, the CIA doesn't compute Gini scores yearly, but they give the last year it was computed,
so these are not exactly equivalent but they are suggestive enough to use. However, when they do
assemble these Gini scores in one place, they list them alphabetically, which is not of much comparative
use (US Central Intelligence Agency, 2007).
However, the World Bank categorizes countries, which means they can be compared within category
and across categories. The World Bank, which does not provide Gini scores, puts 208 countries into
one of four categories based on Gross National Income per capita -- that's total value of goods and
services sold in the market in a year, divided by population size. This is a useful statistic, because
it allows us to compare societies with economies of vastly different size: per capita income removes
the size differences between countries.
The World Bank locates each country into one of four categories: lower income, lower middle income,
upper middle income, and high income (World Bank, 2007a). Basically, those in the lower three categories
are "developing" or what we used to call "third world" countries, while the high income countries
are all of the so-called developed countries.
The countries listed by the CIA with their respective Gini scores were placed into the specific
World Bank categories in which the World Bank had previously located them (World Bank, 2007b). Once
grouped in their categories, median Gini scores were computed for each group. When trying to get
one number to represent a group of numbers, median is considered more accurate than an average, so
the median was used, which means half of the scores are higher, half are lower -- in other words,
the data is at the 50th percentile for each category.
The Gini score for countries, by Gross National Income per capita, categorized by the World Bank:
Figure 7: Median Gini Scores by World Bank income categories (countries selected by US Central
Intelligence Agency were placed in categories developed by the World Bank) and compared to 2004 US
Gini score as calculated by US Central Intelligence Agency (CIA)
Income category
Median Gini score
Gini score, US (2004)
Low income countries (less than $875/person/year)
.406
.450
Lower-middle income countries (between $876-3,465/person/year)
.414
.450
Upper-middle income countries (between $3,466-10,725/person/year
.370
.450
Upper-income countries (over $10,726/person/year
.316
.450
As can be seen, with the (CIA-calculated) Gini score of .450, the US family income is more
unequal than the medians for each category, and is more unequal than some of the poorest countries
on earth, such as Bangladesh (.318 -- calculated in 2000), Cambodia (.400, 2004 est.), Laos (.370-1997),
Mozambique (.396, 1996-97), Uganda (.430-1999) and Vietnam (.361, 1998). This same finding also holds
true using the more conservative Census Bureau-calculated Gini score of .440.
Thus, the US has not only become more unequal over the 35 years, as has been demonstrated above,
but has attained a level of inequality that is much more comparable to those of developing countries
in general and, in fact, is more unequal today than some of the poorest countries on Earth. There
is nothing suggesting that this increasing inequality will lessen anytime soon. And since this increasing
income inequality has taken place under the leadership of both major political parties, there is
nothing on the horizon that suggests either will resolutely address this issue in the foreseeable
future regardless of campaign promises made.
However, to move beyond discussion of whether President Obama is likely to address these and related
issues, some consideration of governmental economic policies is required. Thus, he will be constrained
by decisions made by previous administrations, as well as by the ideological blinders worn by those
he has chosen to serve at the top levels of his administration.
3) Governmental economic policies
There are two key points that are especially important for our consideration: the US Budget and
the US National Debt. They are similar, but different -- and consideration of each of them enhances
understanding.
A) US budget. Every year, the US Government passes a budget, whereby governmental officials
estimate beforehand how much money needs to be taken in to cover all expenses. If the government
actually takes in more money than it spends, the budget is said to have a surplus; if it takes in
less than it spends, the budget is said to be in deficit.
Since 1970, when Richard Nixon was President, the US budget has been in deficit every year
except for the last four years under Clinton (1998-2001), where there was a surplus. But this
surplus began declining under Clinton -- it was $236.2 billion in 2000, and only $128.2 billion in
2001, Clinton 's last budget. Under Bush, the US has gone drastically into deficit: -$157.8 billion
in 2002; -$377.6 billion in 2003; -$412.7 billion in 2004; -$318.3 billion in 2005; and "only"-$248.2
billion in 2006 (Economic Report of the President, 2007: Table B-78).
Now, that is just yearly surpluses and deficits. They get combined with all the other surpluses
and deficits since the US became a country in 1789 to create to create a cumulative amount, what
is called the National Debt.
B) US national debt. Between 1789 and1980 -- from Presidents Washington through
Carter -- the accumulated US National Debt was $909 billion or, to put it another way, $.909 trillion.
During Ronald Reagan's presidency (1981-89), the National Debt tripled, from $.9 trillion to $2.868
trillion. It has continued to rise. As of the end of 2006, 17 years later and after a four-year period
of surpluses where the debt was somewhat reduced, National Debt (or Gross Federal Debt) was $8.451
trillion (Economic Report of the President, 2007: Table B-78).
To put it into context: the US economy, the most productive in the world, had a Gross Domestic
Product (GDP) of $13.061 trillion in 2006, but the National Debt was $8.451 trillion -- 64.7 per
cent of GDP -- and growing (Economic Report of the President, 2007: Table B-1).
In April 2006, one investor reported that "the US Treasury has a hair under $8.4 trillion in outstanding
debt. How much is that? He put it into this context: " if you deposited one million dollars into
a bank account every day, starting 2006 years ago, that you would not even have ONE trillion dollars
in that account" (Van Eeden, 2006).
Let's return to the budget deficit: like a family budget, when one spends more than one brings
in, they can do basically one of three things: (a) they can cut spending; (b) they can increase taxes
(or obviously a combination of the two); or (c) they can take what I call the "Wimpy" approach.
For those who might not know this, Wimpy was a cartoon character, a partner of "Popeye the Sailor,"
a Saturday morning cartoon that was played for over 30 years in the United States . Wimpy had a great
love for hamburgers. And his approach to life was summed up in his rap: "I'll gladly give you two
hamburgers on Tuesday, for a hamburger today."
What is argued is that the US Government has been taking what I call the Wimpy approach to its
budgetary problems: it does not reduce spending, it does not raise taxes to pay for the increased
expenditures -- in fact, President Bush has cut taxes for the wealthiest Americans
[xvi] -- but instead it sells
US Government securities, often known as Treasuries, to rich investors, private corporations or,
increasingly, to other countries to cover the budget deficit. In a set number of years, the US Government
agrees to pay off each bond -- and the difference between what the purchaser bought them for and
the increased amount the US Government pays to redeem them is the cost of financing the Treasuries,
a certain percentage of the total value. By buying US Treasuries, other countries have helped keep
US interest rates low, helping to keep the US economy in as good of shape as it has been (thus, keeping
the US market flourishing for them), while allowing the US Government not to have to confront its
annual deficits. At the end of 2006, the total value of outstanding Treasuries -- to all investors,
not just other countries -- was $8.507 trillion (Economic Report of the President, 2007: Table B-87).
It turns out that at in December 2004, foreigners owned approximately 61 per cent of all outstanding
US Treasuries. Of that, seven per cent was held by China ; these were valued at $223 billion (Gundzik,
2005).
The percentage of foreign and international investors' purchases of the total US public debt since
1996 has never been less than 17.7 percent, and it has reached a high of 25.08 per cent in September
2006. In September 2006, foreigners purchased $2.134 trillion of Treasuries; these were 25.08 per
cent of all purchases, and 52.4 per cent of all privately-owned purchases (Economic Report of the
President, 2007: Table B-89). [xvii]
Altogether, "the world now holds financial claims amounting to $3.5 trillion against the United
States , or 26 per cent of our GDP" (Humpage and Shenk, 2007: 4).
Since the US Government continues to run deficits, because the Bush Administration has refused
to address this problem, the United States has become dependent on other countries buying Treasuries.
Like a junky on heroin, the US must get other investors (increasingly countries) to finance
its budgetary deficits.
To keep the money flowing in, the US must keep interest rates high -- basically, interest rates
are the price that must be paid to borrow money. Over the past year or so, the Federal Reserve has
not raised interest rates, but prior to that, for 15 straight quarterly meetings, they did. And,
as known, the higher the interest rate, the mostly costly it is to borrow money domestically, which
means increasingly likelihood of recession -- if not worse. In other words, dependence on foreigners
to finance the substantial US budget deficits means that the US must be prepared to raise interests
rates which, at some point, will choke off domestic borrowing and consumption, throwing the US economy
into recession. [xviii]
Yet this threat is not just to the United States -- according to the International Monetary Fund
(IMF), it is a threat to the global economy. A story about a then-recently issued report by the IMF
begins, "With its rising budget deficit and ballooning trade imbalance, the United States is running
up a foreign debt of such record-breaking proportions that it threatens the financial stability of
the global economy ." The report suggested that net financial obligations of the US to the rest of
the world could equal 40 per cent of its total economy if nothing was done about it in a few years,
"an unprecedented level of external debt for a larger industrial country" according to the report.
What was perhaps even more shocking than what the report said was which institution said it: "The
IMF has often been accused of being an adjunct of the United States , its largest shareholder" (Becker
and Andrews, 2004).
Other analysts go further. After discussing the increasingly risky nature of global investing,
and noting that "The investor managers of private equity funds and major banks have displaced national
banks and international bodies such as the IMF," Gabriel Kolko (2007) quotes Stephen Roach, Morgan
Stanley's chief economist, on April 24, 2007: "a major financial crisis seemed imminent and that
the global institutions that could forestall it, including the IMF, the World Bank and other mechanisms
of the international financial architecture, were utterly inadequate." Kolko recognizes that things
may not collapse immediately, and that analysts could be wrong, but still concludes, "the transformation
of the global financial system will sooner or later lead to dire results" (Kolko, 2007: 5).
What might happen if investors decided to take their money out of US Treasuries and, say, invest
in Euro-based bonds? The US would be in big trouble, would be forced to raise its interest
rates even higher than it wants -- leading to possibly a severe recession -- and if investors really
shifted their money, the US could be observably bankrupt; the curtain hiding the "little man" would
be opened, and he would be observable to all.
Why would investors rather shift their investment money into Euro-bonds instead of US Treasuries?
Well, obviously, one measure is the perceived strength of the US economy. To get a good idea of how
solid a country's economy is, one looks at things such as budget deficits, but perhaps even more
importantly balance of trade: how well is this economy doing in comparison with other countries?
The US international balance of trade is in the red and is worsening: -$717 billion in
2005. In 1991, it was -$31 billion. Since 1998, the US trade balance has set a new record for being
in the hole every year, except during 2001, and then breaking the all time high the very next
year! -$165 B in 1998; -$263 B in 1999; -$378 B in 2000; only -$362 B in 2001; -$421 B in 2002;
-$494 B in 2003; -$617 B in 2004; and - $717 B in 2005 (Economic Report of the President, 2007: Table
B-103). According to the Census Department, the balance of trade in 2006 was -$759 billion (US Census
Bureau, 2007).
And the US current account balance, the broadest measure of a country's international financial
situation -- which includes investment inside and outside the US in addition to balance of trade
-- is even worse: it was -$805 B in 2005, or 6.4 per cent of national income. "The bottom line is
that a current account deficit of this unparalleled magnitude is unsustainable and there is no hope
of it being painlessly resolved through higher exports alone," according to one analyst (quoted in
Swann, 2006). Scott notes that the current account deficit in 2006 was -$857 billion (Scott, 2007a:
8, fn. 1). "In effect, the United States is living beyond its means and selling off national assets
to pay its bills" (Scott, 2007b: 1).
[xix]
In addition, during mid-2007, there was a bursting of a domestic "housing bubble," which has threatened
domestic economic well-being but that ultimately threatens the well-being of global financial markets.
There had been a tremendous run-up in US housing values since 1995 -- with an increase of more than
70 per cent after adjusting for the rate of inflation -- and this had created "more than $8 trillion
in housing wealth compared with a scenario in which house prices had continued to rise at the same
rate of inflation," which they had done for over 100 years, between 1890 and 1995 (Baker, 2007: 8).
This led to a massive oversupply of housing, accompanied with falling house prices: according
to Dean Baker, "the peak inventory of unsold new homes of 573,000 in July 2006 was more than 50 per
cent higher than the previous peak of 377,000 in May of 1989" (Baker, 2007: 12-13). This caused massive
problems in the sub-prime housing market -- estimates are that almost $2 trillion in sub-prime loans
were made during 2005-06, and that about $325 billion of these loans will default, with more than
1 million people losing their homes (Liedtke, 2007) -- but these problems are not confined to the
sub-prime loan category: because sub-prime and "Alt-A" mortgages (the category immediately above
sub-prime) financed 40 per cent of the housing market in 2006, "it is almost inevitable that the
problems will spill over into the rest of the market" (Baker, 2007: 15). And Business Week
agrees: "Subprime woes have moved far beyond the mortgage industry." It notes that at least five
hedge funds have gone out of business, corporate loans and junk bonds have been hurt, and the leveraged
buyout market has been hurt (Goldstein and Henry, 2007).
David Leonhardt (2007) agrees with the continuing threat to the financial industry. Discussing
"adjustable rate mortgages" -- where interest rates start out low, but reset to higher rates, resulting
in higher mortgage payments to the borrower -- he points out that about $50 billion of mortgages
will reset during October 2007, and that this amount of resetting will remain over $30 billion monthly
through September 2008. "In all," he writes," the interest rates on about $1 trillion worth of mortgages
or 12 per cent of the nation's total, will reset for the first time this year or next."
Why all of this is so important is because bankers have gotten incredibly "creative" in creating
new mortgages, which they sell to home buyers. Then they bundle these obligations and sell to other
financial institutions and which, in turn, create new securities (called derivatives) based on these
questionable new mortgages. Yes, it is basically a legal ponzi scheme, but it requires the continuous
selling and buying of these derivatives to keep working: in early August 2007, however, liquidity
-- especially "financial instruments backed by home mortgages" -- dried up, as no one wanted to buy
these instruments (Krugman, 2007). The US Federal Research and the European Central Bank felt it
necessary to pump over $100 billion into the financial markets in mid-August 2007 to keep the international
economy solvent (Norris, 2007).
So, economically, this country is in terrible shape -- with no solution in sight.
On top of this -- as if all of this is not bad enough -- the Bush Administration is asking for
another $481.4 billion for the Pentagon's base budget, which it notes is "a 62 per cent increase
over 2001." Further, the Administration seeks an additional $93.4 billion in supplemental funds for
2007 and another $141.7 billion for 2008 to help fund the "Global War on Terror" and US operations
in Iraq and Afghanistan (US Government, 2007). According to Stockholm International Peace Research
Institute (SIPRI), in 2006, the US "defense" spending was equivalent to 46 per cent of all military
spending in the world, meaning that almost more money is provided for the US military in one year
than is spent by the militaries of all the other countries in the world combined (SIPRI, 2007).
And SIPRI's accounting doesn't include the $500 billion spent so far, approximately, on wars in
Afghanistan and Iraq .
In short, not only have things gotten worse for American working people since 1973 -- and especially
after 1982, with the imposition of neoliberal economic policies by institutions of the US Government
-- but on-going Federal budget deficits, the escalating National Debt, the need to attract foreign
money into US Treasuries, the financial market "meltdown" as well as the massive amounts of money
being channeled to continue the Empire, all suggest that not only will intensifying social problems
not be addressed, but will get worse for the foreseeable future.
4) Synopsis
This analysis provides an extensive look at the impact of neoliberal economic policies enacted
in the United States on American working people. These neoliberal economic policies have been enacted
as a conscious strategy by US corporate leaders and their governmental allies in both major political
parties as a way to address intensifying globalization while seeking to maintain US dominance over
the global political economy.
While it will be a while before anyone can determine success or failure overall of this elite
strategy but, because of is global-historical perspective, sufficient evidence is already available
to evaluate the affects of these policies on American working people. For the non-elites of this
country, these policies have had a deleterious impact and they are getting worse. Employment data
in manufacturing, worsening since 1979 but especially since 2000 (see Aronowitz, 2005), has been
horrific -- and since this has been the traditional path for non-college educated workers to be able
to support themselves and their families, and provide for their children, this data suggests social
catastrophe for many -- see Rubin (1995), Barnes (2005), and Bageant (2007), and accounts in Finnegan
(1998) and Lipper (2004) that support this -- because comparable jobs available to these workers
are not being created. Thus, the problem is not just that people are losing previously stable, good-paying
jobs -- as bad as that is -- but that there is nothing being created to replace these lost jobs,
and there is not even a social safety net in many cases that can generally cushion the blow (see
Wilson, 1996; Appelbaum, Bernhardt, and Murnane, eds., 2003).
Yet the impact of these social changes has not been limited to only blue-collar workers, although
the impact has been arguably greatest upon them. The overall economic growth of the society has been
so limited since 1973, and the results increasingly being unequally distributed since then, that
the entire society is becoming more and more unequal: each of the four bottom quintiles -- the bottom
80 per cent of families -- has seen a decrease in the amount of family income available to each quintile
between 2001-05. This not only increases inequality and resulting resentments -- including criminal
behaviors -- but it also produces deleterious affects on individual and social health (Kawachi, Kennedy
and Wilkinson, eds., 1999; Eitzen and Eitzen Smith, 2003). And, as shown above, this level of inequality
is much more comparable internationally to "developing" countries rather than "developed" ones.
When this material is joined with material on the US budget, and especially the US National Debt,
it is clear that these "problems" are not the product of individual failure, but of a social order
that is increasingly unsustainable. While we have no idea of what it will take before the US economy
will implode, all indications are that US elites are speeding up a run-away train of debt combined
with job-destroying technology and off-shoring production, creating a worsening balance of trade
with the rest of the world and a worsening current account, with an unstable housing market and intensifying
militarism and an increasingly antagonistic foreign policy: it is like they are building a bridge
over an abyss, with a train increasingly speeding up as it travels toward the bridge, and crucial
indicators suggest that the bridge cannot be completed in time.
Whether the American public will notice and demand a radical change in time is not certain --
it will not be enough to simply slow the train down, but it must turn down an alternative track (see
Albert, 2003; Woodin and Lucas, 2004; Starr, 2005) -- but it is almost certain that foreign investors
will. Should they not be able to get the interest rates here available elsewhere in the "developed"
parts of the world, investors will shift their investments, causing more damage to working people
in the United States .
And when this economic-focused analysis is joined with an environmental one -- George Monbiot
(2007) reports that the best science available argues that industrialized countries have to reduce
their carbon dioxide emissions by 90 per cent by the year 2030 if we are to have a chance to stop
global warming -- then it is clear that US society is facing a period of serious social instability.
5) Conclusion
This article has argued that the situation for working people in the United States, propelled
by the general governmental adoption of neoliberal economic policies, is getting worse -- and there
is no end in sight. The current situation and historical change have been presented and discussed.
Further, an examination and analysis of directly relevant US economic policies have been presented,
and there has been nothing in this analysis that suggests a radical, but necessary, change by US
elected officials is in sight. In other words, working people in this country are in bad shape generally
-- and it is worse for workers of color than for white workers -- and there is nothing within the
established social order that suggests needed changes will be effected.
The neoliberal economic policies enacted by US corporate and government leaders has been a social
disaster for increasing numbers of families in the United States .
Globalization for profit -- or what could be better claimed to be "globalization from above" --
and its resulting neoliberal economic policies have long-been recognized as being a disaster for
most countries in the Global South. This study argues that this top-down globalization and the accompanying
neoliberal economic policies has been a disaster for working people in northern countries as well,
and most particularly in the United States .
The political implications from these findings remains to be seen. Surely, one argument is not
only that another world is possible, but that it is essential.
[Kim Scipes is assistant professor of sociology , Purdue University, North Central, Westville
, IN 46391. The author's web site is at
http://faculty.pnc.edu/kscipes .This paper was given at the 2009 Annual Conference of the United
Association for Labor Education at the National Labor College in Silver Spring , MD. It has been
posted at Links International Journal of Socialist
Renewal with Kim Scipes' permission.]
* * *
Note to labor educators: This is a very different approach than you usually take. While
presenting a "big picture," this does not suggest what you are doing is "wrong" or "bad." What it
suggests, however, is that the traditional labor education approach is too limited: this suggests
that your work is valuable but that you need to put it into a much larger context than is generally
done, and that it is in the interaction between your work and this that we each can think out the
ways to go forward. This is presented in the spirit of respect for the important work that each of
you do on a daily basis.
"... I've always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor. ..."
"... In many respects the project was a counterrevolutionary project. It would nip in the bud what, at that time, were revolutionary movements in much of the developing world ..."
"... So in that situation there was, in effect, a global threat to the power of the corporate capitalist class and therefore the question was, What to do?. The ruling class wasn't omniscient but they recognized that there were a number of fronts on which they had to struggle: the ideological front, the political front, and above all they had to struggle to curb the power of labor by whatever means possible. Out of this there emerged a political project which I would call neoliberalism. ..."
"... The ideological front amounted to following the advice of a guy named Lewis Powell . He wrote a memo saying that things had gone too far, that capital needed a collective project. The memo helped mobilize the Chamber of Commerce and the Business Roundtable. ..."
"... Ideas were also important to the ideological front. The judgment at that time was that universities were impossible to organize because the student movement was too strong and the faculty too liberal-minded, so they set up all of these think tanks like the Manhattan Institute, the Heritage Foundation, the Ohlin Foundation. These think tanks brought in the ideas of Freidrich Hayek and Milton Friedman and supply-side economics. ..."
"... This process took a long time. I think now we've reached a point where you don't need something like the Heritage Foundation anymore. Universities have pretty much been taken over by the neoliberal projects surrounding them. ..."
"... With respect to labor, the challenge was to make domestic labor competitive with global labor. One way was to open up immigration. In the 1960s, for example, Germans were importing Turkish labor, the French Maghrebian labor, the British colonial labor. But this created a great deal of dissatisfaction and unrest. ..."
"... Instead they chose the other way -- to take capital to where the low-wage labor forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labor. ..."
"... At the same time, ideological projects to privatize and deregulate created unemployment. So, unemployment at home and offshoring taking the jobs abroad, and a third component: technological change , deindustrialization through automation and robotization. That was the strategy to squash labor. ..."
"... It was an ideological assault but also an economic assault. To me this is what neoliberalism was about: it was that political project ..."
"... I think they just intuitively said, We gotta crush labor, how do we do it? And they found that there was a legitimizing theory out there, which would support that. ..."
I've always treated neoliberalism as a political project carried out by the corporate
capitalist class as they felt intensely threatened both politically and economically towards
the end of the 1960s into the 1970s. They desperately wanted to launch a political project that
would curb the power of labor.
In many respects the project was a counterrevolutionary project. It would nip in the bud
what, at that time, were revolutionary movements in much of the developing world -- Mozambique,
Angola, China etc. -- but also a rising tide of communist
influences in countries like Italy and France and, to a lesser degree, the threat of a
revival of that in Spain.
Even in the United States, trade unions had produced a Democratic Congress that was quite
radical in its intent. In the early 1970s they, along with other social movements, forced a
slew of reforms and reformist initiatives which were anti-corporate: the
Environmental Protection Agency , the Occupational Safety and Health Administration,
consumer protections, and a whole set of things around empowering labor even more than it had
been empowered before.
So in that situation there was, in effect, a global threat to the power of the corporate
capitalist class and therefore the question was, What to do?. The ruling class wasn't omniscient
but they recognized that there were a number of fronts on which they had to struggle: the
ideological front, the political front, and above all they had to struggle to curb the power of
labor by whatever means possible. Out of this there emerged a political project which I would
call neoliberalism.
BSR Can you talk a
bit about the ideological and political fronts and the attacks on labor? DH The ideological front amounted to following the advice of a guy
named Lewis
Powell . He wrote a memo saying that things had gone too far, that capital needed a
collective project. The memo helped mobilize the Chamber of Commerce and the Business
Roundtable.
Ideas were also important to the ideological front. The judgment at that time was that
universities were impossible to organize because the student movement was too strong and the
faculty too liberal-minded, so they set up all of these think tanks like the Manhattan
Institute, the Heritage Foundation, the Ohlin Foundation. These think tanks brought in the
ideas of Freidrich Hayek and Milton Friedman and supply-side economics.
The idea was to have these think tanks do serious research and some of them did -- for
instance, the National Bureau of Economic
Research was a privately funded institution that did extremely good and thorough research.
This research would then be published independently and it would influence the press and bit by
bit it would surround and infiltrate the universities.
This process took a long time. I think now we've reached a point where you don't need
something like the Heritage Foundation anymore. Universities have pretty much been taken over
by the neoliberal projects surrounding them.
With respect to labor, the challenge was to make domestic labor competitive with global
labor. One way was to open up immigration. In the 1960s, for example, Germans were importing
Turkish labor, the French Maghrebian labor, the British colonial labor. But this created a
great deal of dissatisfaction and unrest.
Instead they chose the other way -- to take capital to where the low-wage labor forces
were. But for globalization to work you had to reduce tariffs and
empower finance capital, because finance capital is the most mobile form of capital. So
finance capital and things like floating currencies became critical to curbing labor.
At the same time, ideological projects to privatize and deregulate created unemployment.
So, unemployment at home and offshoring taking the jobs abroad, and a third component:
technological change ,
deindustrialization through automation and robotization. That was the strategy to squash
labor.
It was an ideological assault but also an economic assault. To me this is what neoliberalism
was about: it was that political project, and I think the bourgeoisie or the corporate
capitalist class put it into motion bit by bit.
I don't think they started out by reading Hayek or anything, I think they just intuitively
said, We gotta crush labor, how do we do it? And they found that there was a legitimizing
theory out there, which would support that.
(wired.com)
Posted by EditorDavid on Saturday September 23, 2017 @09:30PM from the looking-inside dept.
Amazon aggressively recruited thousands of retirees living in mobile homes to migrate to
Amazon's warehouses for seasonal work, according to a story shared by nightcats . Wired reports: From a hiring perspective,
the RVers were a dream labor force. They showed up on demand and dispersed just before
Christmas in what the company cheerfully called a "taillight parade." They asked for
little in the way of benefits or protections . And though warehouse jobs were physically
taxing -- not an obvious fit for older bodies -- recruiters came to see CamperForce workers'
maturity as an asset. These were diligent, responsible employees. Their attendance rates were
excellent. "We've had folks in their eighties who do a phenomenal job for us," noted Kelly
Calmes, a CamperForce representative, in one online recruiting seminar... In a company
presentation, one slide read, "Jeff Bezos has predicted that, by the year 2020, one out of
every four workampers in the United States will have worked for Amazon." The article is
adapted from a new book called " Nomadland
," which also describes seniors in mobile homes being recruited for sugar beet harvesting and
jobs at an Iowa amusement park, as well as work as campground hsots at various national parks.
Many of them "could no longer afford traditional housing," especially after the financial
downturn of 2008. But at least they got to hear stories from their trainers at Amazon about the
occasional "unruly" shelf-toting "Kiva" robot: They told us how one robot had tried to drag
a worker's stepladder away. Occasionally, I was told, two Kivas -- each carrying a tower of
merchandise -- collided like drunken European soccer fans bumping chests. And in April of that
year, the Haslet fire department responded to an accident at the warehouse involving a can of
"bear repellent" (basically industrial-grade pepper spray). According to fire department
records, the can of repellent was run over by a Kiva and the warehouse had to be
evacuated.
"... Karen Panetta, the dean of graduate engineering education at Tufts University and the vice president of communications and public relations at the IEEE-USA, believes the outcome for tech will be Logan's Run -like, where age sets a career limit... ..."
"... It's great to get the new hot shot who just graduated from college, but it's also important to have somebody with 40 years of experience who has seen all of the changes in the industry and can offer a different perspective." ..."
Will the median age of tech firms rise as the Millennial generation
grows older...? The median age range at Google, Facebook, SpaceX, LinkedIn,
Amazon, Salesforce, Apple and Adobe, is 29 to 31, according to a study last
year by PayScale, which analyzes self-reported data...
Karen Panetta, the dean
of graduate engineering education at Tufts University and the vice president
of communications and public relations at the IEEE-USA, believes the outcome
for tech will be Logan's Run -like, where age sets a career limit...
Tech firms want people with the current skills sets and those "without those
skills will be pressured to leave or see minimal career progression," said Panetta...
The idea that the tech industry may have an age bias is not scaring the new
college grads away. "They see retirement so far off, so they are more interested
in how to move up or onto new startup ventures or even business school," said
Panetta.
"The reality sets in when they have families and companies downsize
and it's not so easy to just pick up and go on to another company," she said.
None of this may be a foregone conclusion.
Millennials may see the experience
of today's older workers as a cautionary tale, and usher in cultural changes... David Kurtz, a labor relations partner at Constangy, Brooks, Smith & Prophete,
suggests tech firms should be sharing age-related date about their workforce,
adding "The more of a focus you place on an issue the more attention it gets
and the more likely that change can happen.
It's great to get the new hot shot
who just graduated from college, but it's also important to have somebody with
40 years of experience who has seen all of the changes in the industry and can
offer a different perspective."
"... This peace-keeping aspect of affirmative action understood, perhaps we ought to view those smart Asians unfairly rejected from Ivy League schools as sacrificial lambs. ..."
The argument is that admitting academically unqualified blacks to elite schools is, at core, a
policy to protect the racial peace and, as such, has nothing to do with racial justice, the putative
benefits of diversity or any other standard justification. It is this peace- keeping function that
explains why the entire establishment, from mega corporations to the military, endorses
constitutionally
iffy racial discrimination and why questioning diversity's benefits is the most grievous of all
PC sins. Stated in cost-benefit terms, denying a few hundred (even a few thousand) high-SAT scoring
Asians an Ivy League diploma and instead forcing them attend Penn State is a cheap price to pay for
social peace.
This argument rests on an indisputable reality that nearly all societies contain distinct ethnic
or religious groups who must be managed for the sake of collective peace. They typically lack the
ability to economically compete, may embrace values that contravene the dominant ethos, or otherwise
just refuse to assimilate. What makes management imperative is the possibility of violence either
at an individual level, for example, randomly stabbing total strangers, or on a larger scale, riots
and insurrections. Thus, in the grand scheme of modern America's potentially explosive race relations,
academically accomplished Asians, most of whom are politically quiescent, are expendable, collateral
damage in the battle to sustain a shaky status quo.
Examples of such to-be-managed groups abound. Recall our own tribulations with
violent Indian tribes
well into the 19 th century or what several European nations currently face with Muslims
or today's civil war in Burma
with the Karen People. Then there's Turkey's enduring conflict with the Kurds and long before the
threat of Islamic terrorism, there were Basque separatists (the
ETA ), and the
Irish Republican Army
. In the past 45 years, there have been more than 16,000 terror attacks in Western Europe according
to the
Global Terrorism Database . At a lower levels add the persistently criminal Gypsies who for 500
years have resisted all efforts to assimilate them. This listing is, of course, only a tiny sampling
of distinct indigestible violence-prone groups.
The repertoire of remedies, successful and failed, is also extensive. Our native-American problem
has, sad to say, been largely solved by the use of apartheid-like reservations and incapacitating
a once war-like people with drugs and alcohol. Elsewhere generous self-rule has done the trick, for
example, the Basques in Spain. A particularly effective traditional solution is to promote passivity
by encouraging religious acceptance of one's lowly state.
Now to the question at hand: what is to be done regarding American blacks, a group notable for
its penchant for violence whose economic advancement over the last half-century has largely stalled
despite tens of billions and countless government uplift programs.
To appreciate the value of affirmative action recall the urban riots of the 1960s. They have almost
been forgotten but their sheer number during that decade would shock those grown accustomed to today's
relative tranquility. A sampling
of cities with major riots includes Rochester, NY, New York City, Philadelphia, PA, Los Angeles,
CA, Cleveland, OH, Newark, NJ, Detroit, MI, Chicago, IL, Washington, DC and several smaller cities.
The damage from these riots! "uprisings" or "rebellions" according to some!was immense. For example,
the Detroit riot of 1967
lasted five days and quelling it required the intervention of the Michigan Army National Guard and
both the 82 nd and 101 st Airborne divisions. When it finally ended, the death
toll was 43, some 7200 were arrested and more than 2000 buildings destroyed. Alas, much of this devastation
remains visible today and should be a reminder of what could happen absent a policy of cooling out
black anger.
To correctly understand how racial preferences at elite colleges serves as a cost-effective solution
to potential domestic violence, recall the quip by comedian
Henny Youngman when asked
"How's your wife?" He responded with, "Compared to what?" This logic reflects a hard truth: when
confronting a sizable, potentially disruptive population unable or unwilling to assimilate, a perfect
solution is beyond reach. Choices are only among the lesser of evils and, to repeat, under current
conditions, race-driven affirmative action is conceivably the best of the worst. A hard-headed realist
would draw a parallel with how big city merchants survive by paying off the police, building and
food inspectors, and the Mafia. Racial preferences are just one more item on the cost-of-doing business
list–the Danegeld .
In effect, racial preferences in elite higher education (and beneficiaries includes students,
professors and the diversity-managing administrators) separates the
top 10% measured in cognitive ability from their more violent down market racial compatriots.
While this manufactured caste-like arrangement hardly guarantees racial peace (as the black-on-white
crime rate, demonstrates) but it pretty much dampens the possibility of more collective, well-organized
related upheavals, the types of disturbances that truly terrify the white establishment. Better to
have the handsomely paid Cornel West pontificating
about white racism at Princeton where he is a full professor than fulminating at some Ghetto street
corner. This status driven divide just reflects human nature. Why would a black Yalie on Wall Street
socialize with the bro's left behind in the Hood? This is the strategy of preventing a large-scale,
organized rebellion by decapitating its potential leadership. Violence is now just Chicago
or Baltimore-style gang-banger intra-racial mayhem or various lone-wolf criminal attacks on whites.
Co-optation is a staple in the political management repertoire. The Soviet Union adsorbed what
they called the "leading edge" into the Party (anyone exceptionally accomplished, from chess grandmasters
or world-class athletes) to widen the divide the dominant elite, i.e., the Party, and hoi polloi.
Election systems can be organized to guarantee a modicum of power to a handful of potential disruptors
and with this position comes ample material benefits (think Maxine Waters). Monarchies have similarly
managed potential strife by bestowing honors and titles on commoners. It is no accident that many
radicals are routinely accused of "selling out" by their former colleagues in arms. In most instances
the accusation is true, and this is by design.
To appreciate the advantages of the racial preferences in higher education consider Henny's "compared
to what"? part of his quip. Certainly what successfully worked for quelling potential Native American
violence, e.g., forced assimilation in "Indian Schools" or confinement in pathology-breeding reservations,
is now totally beyond the pale though, to be sure, some inner-cities dominated by public housing
are increasingly coming to resemble pathology-inducing Indian reservations. Even less feasible is
some legally mandated homeland of the types advocated by Black Muslims.
I haven't done the math but I would guess that the entire educational racial spoils system is
far more cost effective than creating a
garrison state or a DDR-like police state where thousands of black trouble-makers were quickly
incarcerated. Perhaps affirmative action in general should be viewed as akin to a nuisance tax, probably
less than 5% of our GDP.
To be sure, affirmative action at elite universities is only one of today's nostrums to quell
potential large scale race-related violence. Other tactics include guaranteeing blacks elected offices,
even if this requires turning a blind eye toward election fraud, and quickly surrendering to blacks
who demand
awards and honors on the basis of skin color. Perhaps a generous welfare system could be added
to this keep-the-peace list. Nevertheless, when all added up, the costs would be far lowers than
dealing with widespread 1960s style urban violence.
This peace-keeping aspect of affirmative action understood, perhaps we ought to view those
smart Asians unfairly rejected from Ivy League schools as sacrificial lambs. Now, given all
the billions that have been saved, maybe a totally free ride at lesser schools would be a small price
to pay for their dissatisfaction (and they would also be academic stars at such schools). Of course
this "Asian only" compensatory scholarship might be illegal under the color blind requirements of
1964 Civil Right Act, but fear not, devious admission officers will figure out a way around the law.
1) Asians will grow in power, and either force more fairness towards themselves, or return
to Asia.
2) WN idiots happy about Asians returning to Asia fail to see that Asians will return only when
they control enough of America to manage large parts of it from afar (like the tech industry).
3) 2-3 million top caliber white male Western Expats might just move to Asia, since they may like
Asian women more, and want to be free of SJW idiocy. This is all it takes to fill the alleged
gap Asia has in creativity, marketing, and sales expertise. Asia effectively decapitates the white
West by taking in their best young men and giving them a great life in Asia.
4) America becomes like Brazil with all economic value colonized by Asians and the white expats
in Asia with mixed-race children. White trashionalists left behind are swiftly exterminated by
blacks, and white women mix with the blacks. America becomes a Brazil minus the fun culture, good
weather, and attractive women.
@Carlton Meyer At first, I was surprised that they listened to him.
After a while, I realized that many negros are stupid enough to think that Hispanics and Asians
would like to be in some anti-white alliance with blacks as a senior partner. In reality, they
have an even lower opinion of blacks than whites do. US blacks have zero knowledge of the world
outside America, so this reality just doesn't register with them.
John Derbyshire has made similar arguments–racial preferences are the price for social peace.
But, as Steve Sailer has pointed out, we're running out of white and Asian children to buffer
black dysfunction and Asians are going to get less and less willing to be "sacrificial lambs"
for a black underclass that they did nothing to create and that they despise.
There are other ways to control the black underclass. You can force the talented ones to remain
in their community and provide what leadership they can. Black violence can be met with instant
retributive counter-violence. (Prior to the 1960s most race riots were white on black.) Whites
can enforce white norms on the black community, who will sort-of conform to them as best they
are able.
Finally, Rudyard Kipling had a commentary on Danegeld. It applies to paying off dysfunctional
domestic minorities just as much to invading enemies.
"We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that pays it is lost!"
Could care less about your smart Asians The smart Asians are enthusiastivally voting Whitey
into a racial minority on Nov 3 2020 They don't belong on Native Born White American Living and
Breeding Space
Hell with those 'smart Asians'. They are among the biggest Proglob a-holes.
Asians have servile genes that seek approval from the power. They are status-freaks.
They make perfect collaborators with the Glob.
Under communism, they made the most conformist commies.
Under Japanese militarism, they made the most mindless military goons who did Nanking.
Under Khmer Rouge, they were biggest looney killers.
Under PC, they make such goody good PC dogs.
If the prevailing culture of US was patriotic and conservatives, Asians would try to conform
to that, and that wouldn't be so bad.
But since the prevailing culture is PC, these yellow dogs are among the biggest homomaniacal
PC tards.
Hell with them. Yellow dogs voted for Obama and Hillary in high numbers. They despise, hate,
and feel contempt for white masses and working class. They are servitors of the empire as Darrell
Hamamoto said. He's one of the few good guys.
Just look at that Francis Fukuyama, that slavish dog of Soros. He's so disgusting. And then,
you got that brown Asian tard Fareed Zakaria. What a vile lowlife. And that fat Jeer Heet who
ran from dirty browns shi ** ing all over the place outdoors to live with white people but bitches
about 'white supremacy'. Well, the fact that he ran from his own kind to live with whites must
mean his own choice prefers white folks. His immigration choice was 'white supremacism'. After
all, he could have moved to black Africa. Why didn't he?
PS. The best way of Affirmative Action is to limit it only to American Indians and Blacks of
slave ancestry. That's it.
Also, institutions should OPENLY ADMIT that they do indeed discriminate to better represent
the broader population. Fair or not, honesty is a virtue. What is most galling about AA is the
lies that says 'we are colorblind and meritocratic but ' No more buts. Yes, there is discrimination
but to represent larger population. Okay, just be honest.
Please stop trying to confuse Orientals with Indians and other subcontinentals. They are
quite distinct.
In their original countries they are, but in America they are almost identical in all ways
except appearance and diet.
Plus, since SE Asia has always had influence from both, there is a smooth continuum in the
US across all of these groups by the time the 2nd generation rolls around.
They don't belong on Native Born White American Living and Breeding Space
Three things wrong with this sentence.
1) I don't think you know that Native Americans (i.e. Siberians) were here first.
2) I will bet anything that all 128 of your GGGGG-GPs are not English settlers who were here in
1776. You are probably some 2nd gen Polack or something who still worries that WASPs look down
on you.
3) There is very high variance among whites, and white trashionalists are SOOOO far below the
quality threshold of any moderately successful white that they can't claim to speak for all whites.
White Trashionalists represent the waste matter that nature wants to purge (which is the process
that enables exceptional whites to emerge on the other end of the scale). That is why white women
are absolutely doing what nature wants, which is to cut off the White Trashionalists from reproduction.
If you care about the white race, you should be glad that white women want nothing to do with
you and allow you to complete you wastebasket role.
Obama was one of the beneficiaries of AA along with his wife and their kids. Did that prevent
Baltimore and Chicago and etc from blowing up?
In a way, AA and Civil Rights made black communities more volatile. When blacks were more stringently
segregated, even smart and sensible blacks lived among blacks and played some kind of 'role model'.
They ran businesses and kept in close contact with black folks.
It's like white communities in small towns used to be much better when the George Baileys stayed
in them or returned to them and ran things.
But as more and more George Bailies left for the big cities, small towns had fewer top notch
role models and leaders and enterprisers. Also, the filth of pop culture and youth degeneracy
via TV corrupted the dummies. And then, when globalism took away the industries, there were just
people on opioids. At least old timers grew up with family and church. The new generation grew
up on Idiocracy.
Anyway, AA will just taken more black talent from black community and mix them with whites,
Asians, and etc. Will some of these blacks use their power and privilege to incite black mobs
to violence? Some do go radical. But most will just get their goodies and forget the underclass
except in some symbolic way. It's like Obama didn't do crap as 'community organizer'. He just
stuck close to rich Jews in Hyde Park, and as president, he was serving globo-wars, Wall Street,
and homos.
When he finally threw a bone at the blacks in his second term, it lit cities on fire.
Did the black underclass change for the better because they saw Obama as president? No. If
anything, it just made them bolder as flashmobs. The way blacks saw it, a bunch of fa ** ogty
wussy white people voted for a black guy created by a black man sexually conquering a white woman.
They felt contempt for cucky whites, especially as rap culture and sports feature blacks as master
race lording over whites. To most underclass blacks, the only culture they know is sports and
rap and junk they see on TV. And they are told blacks are magical, sacred, badass, and cool. And
whites are either 'evil' if they have any pride or cucky-wucky wussy if they are PC.
The Murrayian Coming-Apart of whites took place already with blacks before. And more AA that
takes in smarter blacks will NOT make things better for black underclass. And MORE blacks in elite
colleges will just lead to MORE anger issues, esp as they cannot keep up with other students.
Even so, I can understand the logic of trying to win over black cream of crop. Maybe if they
are treated nice and feel 'included', they won't become rabble-rousers like Al Sharpton and act
more like Obama. Obama's race-baiting with Ferguson was bad but could have been worse with someone
like Sharpton.
The Power can try to control a people in two ways. Crush everyone OR give carrots to comprador
elites so that sticks can be used on masses. Clinton did this. He brought over black elites, and
they worked with him to lock up record number of Negroes to make cities safer. As Clinton was
surrounded by Negroes and was called 'first black president' by Toni Morrison, many blacks didn't
realize that he was really working to lock up lots of black thugs and restore order.
Smart overlords play divide-and-conquer by offering carrots to collaborator elites and using
sticks on masses.
British Imperialists did that. Gandhi would likely have collaborated with Brits if not for the
fact that he was called a 'wog' in South Africa and kicked off a train. Suddenly, he found himself
as ONE with the poor and powerless 'wogs' in the station. He was made equal with his own kind.
Consider Jews in the 30s and even during WWII. Many Western European Jews became rich and privileged
and felt special and put on airs. Many felt closer to gentile elites and felt contempt and disdain
for many 'dirty' and 'low' Eastern European Jews. If Hitler had been cleverer and offered carrots
to rich Jews, there's a good chance that many of them would have collaborated and worked with
the Power to suppress or control lower Jews, esp. of Eastern European background.
But Hitler didn't class-discriminate among Jews. He went after ALL of them. Richest Jew, poorest
Jew, it didn't matter. So, even many rich Jews were left destitute if not dead after WWII. And
this wakened them up. They once had so much, but they found themselves with NOTHING. And as they
made their way to Palestine with poor Eastern European Jewish survivors, they felt a strong sense
of ethnic identity. Oppression and Tragedy were the great equalizer. Having lost everything, they
found what it really means to be Jewish. WWII and Holocaust had a great traumatic equalizing effect
on Jews, something they never forgot since the war, which is why very rich Jews try to do much
for even poor Jews in Israel and which is why secular Jews feel a bond with funny-dressed Jewish
of religious sects.
For this reason, it would be great for white identity if the New Power were to attack ALL whites
and dispossess all of them. Suppose globalism went after not only Deplorables but Clintons, Bushes,
Kaineses, Kerrys, Kennedys, and etc. Suppose all of them were dispossessed and humiliated and
called 'honkers'. Then, like Gandhi at the train station, they would regain their white identity
and identify with white hoi polloi who've lost so much to globalism. They would become leaders
of white folks.
But as long as carrots are offered to the white elites, they go with Glob and dump on whites.
They join with the GLOB to use sticks on white folks like in Charlottesville where sticks were
literally used against patriots who were also demeaned as 'neo-nazis' when most of them weren't.
So, I'm wishing Ivy Leagues will have total NO WHITEY POLICY. It is when the whites elites
feel rejected and humiliated by the Glob that they will return to the masses.
Consider current Vietnam. Because Glob offers them bribes and goodies, these Viet-cuck elites
are selling their nation to the Glob and even allowing homo 'pride' parades.
White Genocide that attacks ALL whites will have a unifying effect on white elites and white
masses. It is when gentiles targeted ALL Jews that all Jews, rich and poor, felt as one.
But the Glob is sneaky. Instead of going for White Genocide that targets top, middle, and bottom,
it goes for White Democide while forgoing white aristocide. So, white elites or neo-aristocrats
are rewarded with lots of goodies IF they go along like the Romneys, Clintons, Kaines, Bidens,
and all those quisling weasels.
" Now to the question at hand: what is to be done regarding American blacks, a group notable
for its penchant for violence whose economic advancement over the last half-century has largely
stalled despite tens of billions and countless government uplift programs. "
I read an article, making a learned impression, that on average USA blacks have a lower IQ.
I do suppose that IQ has a cultural component, nevertheless, those in western cultures with a
lower IQ can be expected to have less economic success.
A black woman who did seem to understand all this was quoted in the article as that 'blacks should
be compensated for this lower IQ'.
One can discuss this morally endless, but even if the principle was accepted, how is it executed,
and where is the end ?
For example, people with less than average length are also less successful, are we going to compensate
them too ?
"economic advancement over the last half-century has largely stalled despite tens of billions
and countless government uplift programs"
It only stalled when the Great Society and the uplift programs started. According to The Bell
Curve there was basically an instant collapse when LBJ started to wreaking his havoc. Go back
to pre-1964 norms and no late-60s riots.
We have sacrificed smart white students for three generations to keep the hebraic component
around 30% at our highest-ranked colleges and universities, and no one (except the jewish Ron
Unz himself) made so much as a peep. And as he copiously documented, whites have suffered far
more discrimination than asians have. The difference is, whites are more brainwashed into accepting
it.
@War for Blair Mountain "They don't belong on Native Born White American Living and Breeding
Space "
Your statement would be perfectly correct if it read, "White people of European origin don't
belong on Native American Living and Breeding Space "
Yet there they are, in immense, pullulating numbers. And now they have the gall to complain
that other people – some of whom resemble the few surviving Native Americans far more closely
than Whites do – are coming to "their" continent.
Honestly, what is the world coming to when you spend centuries and millions of bullets, bottles
of whisky and plague-ridden blankets getting rid of tens of millions of people so you can steal
their land – and then more people like you come along and want to settle peaceably alongside you?
That's downright un-American.
Maybe you'd be more comfortable if the Asian immigrants behaved more like the European settlers
– with fire, sword, malnutrition and pestilence.
@Diversity Heretic The Kipling quote is stirring and thought-provoking (like most Kipling
quotes). But it is not entirely correct.
Consider the kings of France in the 10th century, who were confronted by the apparently insoluble
problem of periodic attacks by bands of vicious, warlike, and apparently irresistible Vikings.
One king had the bright idea of buying the Northmen off by granting them a very large piece of
land in the West of France – right where the invading ships used to start up the Seine towards
Paris.
The Northmen settled there, became known as Normans, and held Normandy for the rest of the
Middle Ages – in the process absolutely preventing any further attacks eastward towards Paris.
The dukes of Normandy held it as a fief from the king, and thus did homage to him as his feudal
subordinates.
They did conquer England, Sicily, and a few other places subsequently – but the key fact is
that they left the tiny, feeble kingdom of France alone.
Ratioal cost benefit arguments could be applied much more widely to the benefit of America
and other First World countries. If otherwise illegal drugs were legalised, whether to be prescribed
by doctors or not, it would save enormous amounts of money on law enforcement and, subject to
what I proffer next, incarceration.
What is the downside? The advocates of Prohibition weren't wrong about the connection of alcohol
and lower productivity. That was then. If, say, 10 per cent of the population were now disqualified
from the workforce what would it matter. The potential STEM wizards amongst them (not many) would
mostly be nurtured so that it was only the underclass which life in a daze. And a law which made
it an offence, effectively one for which the penalty was to be locked up or otherwise deprived
of freedom to be a nuisance, to render oneself unfit to perform the expected duties of citizenship
would have collateral benefits in locking up the right underclass males.
@Bro Methylene "Orientals," east Asians, or just Asians in American parlance are indeed quite
different from south Asians, called "Asians" in the UK,. These are quite different groups.
But the groups of east and south Asians include widely differing peoples. A Korean doesn't
have much in common with a Malay, nor a Pathan with a Tamil. Probably not much more than either
has in common with the other group or with white Americans.
That they "all look alike" to use does not really mean the do, it just means we aren't used
to them.
Was recently watching an interesting Chinese movie and had enormous difficulty keeping the
characters straight, because they did indeed all look alike to me. I wonder if Chinese people
in China have similar trouble watching old American movies.
@Carlton Meyer yeah and hispanics are natural conservatives. dont be a cuck once that slant
is here long enough he will tumble to the game and get on the anti white bandwagon. and sure asians
will eventually out jew the jews just what we need another overlord, only this one a huge percentage
or world pop. .
You know weisberg youre not fooling anyone here peddle that cuck crap elsewhere affirmative
action leads to nothing but more affirmative action at this point everyone but white males gets
it, and you my jew friend know this so selling it to sucker cucks as the cost of doing business
is just more jew shenanigans. There is a much better solution to the problem peoples deport them
back where they belong israel africa asia central america.
This is all about nothing now. The only thing White people have to learn anymore is controlled
breathing, good position, taking up trigger slack, letting the round go at exactly the right moment
– one round, one hit.
When your child tosses a tantrum and tears up his bedroom, and you tell him his mean-spirited,
selfish cousins caused it and then you reward him with a trip to Disneyland and extra allowance:
then you guarantee more and worse tantrums.
That is what America and America's Liberals, the Elites, have done with blacks and violence.
A very interesting post. Really a unique perspective – who cares if it's not fair, if it is
necessary to keep the peace?
I do however disagree with one of your points. " whose economic advancement over the last half-century
has largely stalled despite tens of billions and countless government uplift programs."
I think you have missed the main event. Over the last half-century the elites of this nation
have waged ruthless economic warfare AGAINST poor blacks in this country, to an extent that far
dwarfs the benefits of affirmative action (for a typically small number of already privileged
blacks).
Up through the 1960′s, blacks were starting to do not so bad. Yes they were in a lot of menial
jobs, but many of these were unionized and the pay was pretty good. I mean, if nobody else wants
to sweep your floors, and the only guy willing to do it i s black, well, he can ask for a decent
deal.
Then our elites fired black workers en masse, replacing them with Mexican immigrants and outsourcing
to low-wage countries. Blacks have had their legs cut off with a chainsaw, and the benefits of
affirmative action (which nowadays mostly go to Mexicans etc.!) little more than a bandaid.
And before we are too hard on blacks, let me note that whites are also being swept up in the
poverty of neoliberal globalization, and they too are starting to show social pathology.
Because in terms of keeping the social peace, there is one fundamental truth more important
than all others: there must be some measure of broadly shared prosperity. Without it, even ethnically
homogeneous and smart and hard working people like the Japanese or Chinese will tear themselves
apart.
Note that there is not a word in this article about what this does to the white working class
and how it can be given something in return for allowing Elites to bribe blacks with trillions
and trillions of dollars in goodies. Nor is there is there any indication that this process eventually
will explode, with too many blacks demanding so much it cannot be paid.
Was this written tongue in cheek?
Affirmative action will never end. The bribes will never end. The US made a mistake in the 1960s.
We should have contained the riots then let the people in those areas sleep in the burned out
rubble. Instead through poverty programs we rewarded bad black behavior.
By filling the Ivy League with blacks we create a new class of Cornell West's for white people
to listen to. We enhance the "ethos" of these people.
Eventually, certainly in no more than 40 years, we will run out of sacrifices. What then when
whites constitute only 40% of the American population? Look at South Africa today.
We have black college graduates with IQs in the 80s! They want to be listened to. After all, they're
college graduates.
I do not believe you have found "a cost-effective solution to potential domestic violence".
You mix in this "top 10%" and they get greater acceptance by whites who are turned left in college.
"The argument is that admitting academically unqualified blacks to elite schools is, at core,
a policy to protect the racial peace "
IT IS always a temptation to an armed and agile nation
To call upon a neighbour and to say: –
"We invaded you last night – we are quite prepared to fight,
Unless you pay us cash to go away."
And that is called asking for Dane-geld,
And the people who ask it explain
That you've only to pay 'em the Dane-geld
And then you'll get rid of the Dane!
It is always a temptation for a rich and lazy nation,
To puff and look important and to say: –
"Though we know we should defeat you,
we have not the time to meet you.
We will therefore pay you cash to go away."
And that is called paying the Dane-geld;
But we've proved it again and again,
That if once you have paid him the Dane-geld
You never get rid of the Dane.
It is wrong to put temptation in the path of any nation,
For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
You will find it better policy to say: –
"We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that plays it is lost!"
whose economic advancement over the last half-century has largely stalled despite tens of
billions and countless government uplift programs.
The reality of this is become a huge stumbling block. In fact this group has actually been
mostly regressing into violence and stupidity, going their own separate way as exemplified by
their anti-social music which celebrates values repugnant to the majority. Look at the absurd
level of shootings in cities like Chicago. That's not changing anytime soon. They're by far overrepresented
in Special Ed, juvenile delinquency, prisons and all other indicators of dysfunction. Their talented
tenth isn't very impressive as compared to whites or Asians. Their entire middle class is mostly
an artificial creation of affirmative action. The point is that they can only be promoted so far
based on their capability. The cost of the subsidy gets greater every year and at some point it'll
become too heavy a burden and then it'll be crunch time. After the insanity of the Cultural Revolution
the Chinese had to come to their senses. It's time to curtail our own version of it.
It really is terrible and unfair that an Asian needs to score so much higher than you white
oppressors to get into the Ivy league
A Princeton study found that students who identify as Asian need to score 140 points higher
on the SAT than whites to have the same chance of admission to private colleges, a difference
some have called "the Asian tax."
I think this is brilliant satire.
It is actually an argument that is logically sound. Doesn't mean that it's good or sensible or
even workable over the long run.
It's just logically sound. It holds together if one accepts the not-crazy parts its made out of.
I don't believe it's meant to be taken literally, because both the beneficiaries and those who
get screwed will grow in their resentment and the system would melt down.
New fields with the word "studies' in them would get added and everyone would know – deep down
– why that is so, and Asians would continue to dominate the hard sciences, math and engineering.
Still, as satire, it's so close to the bone that it works beautifully.
@Tom Welsh "Yet there they are, in immense, pullulating numbers. And now they have the gall
to complain that other people – some of whom resemble the few surviving Native Americans far more
closely than Whites do – are coming to "their" continent."
Agree. The country should be returned to pre-1700 conditions and given over to anyone who wants
it.
@Anonymouse I guess one man's riot is another man's peaceful night. There was a bit of rioting
in Brooklyn that night, businesses burned and looted, and a handful of businesses were looted
in Harlem. There was a very heavy police presence with Mayor Lindsey that night and blacks were
still very segregated in 1968, so I'd guess it was more that show of force that prevented the
kind of riots we'd seen earlier and in other cities at that time. Still, there was looting and
burning, so New York's blacks don't get off the hook. As a personal note. my older brother and
his friends were attacked by a roving band of blacks that night in Queens, but managed to chase
them out of our neighborhood.
The costs of BRA may be lower than the costs of 1960s urban riots, though an accurate accounting
would be difficult as many costs are not easily tabulated.
Consider, for instance, the costs of excluding higher performing whites and Asians from elite
universities. Does this result in permanently lower salaries from them as a result of greater
difficulty in joining an elite career track?
What costs do affirmative action impose upon corporations, especially those with offices in
metropolitan areas with a lot of blacks? FedEx is famously centralized in Memphis. What's the
cost to me as a shipper in having to deal with sluggish black customer service personnel?
The blacks are 15% of the population, so I doubt "garrison state" costs would be terribly high.
I am certain that segregation was cheaper than BRA is. The costs of segregation were overlooking
some black talent (negligible) and duplication of certain facilities (I suspect this cost is lower
than the cost of white flight).
How did America ever manage to survive when there hardly any Chinese Hindus..Sihks .Koreans
in OUR America?
Answer:Very well thank you!!!! ..America 1969=90 percent Native Born White American .places
two Alpha Native Born White American Males on the Moon 10 more after this Who the F would be opposed
to this?
Answer:Chinese "Americans" Korean "Americans" Hindu "Americans" .Sihk "Americans" .Pakistani
"Americans"
There would still be racial peace if affirmative action was abolished. They'll bitch for a
while, but they'll get used it and the dust will settle.
Side note: Affirmation action also disproportionately helps white women into college, and they're
the largest group fueling radical leftist identity politics/feminism on campus. In other words,
affirmative action is a large contributor to SJWism, the media-academia complex, and the resulting
current political climate.
@jilles dykstra The statement "blacks should be compensated for this lower IQ" is no different
than the descendents of the so-called jewish "holocaust ™" being compensated in perpetuity by
the German government. Now, there are calls by the jewish "holocaust ™" lobby to extend the financial
compensation to children, grandchildren and great-grandchildren of these so-called "holocaust
™ survivors, stating the fake concept of "holocaust ™" transference" just another "holocaust ™"
scam
Same thing.
More Monsanto, DuPont cancers and degraded foods.
New diseases from medical, biological, genetic research
More spying and censorship and stealing by Harvard, Princeton, Yale, Stanford, high IQ thieves.
All jobs overseas, domestic unemployment, endless wars, by the best and brightest.
Toxic pollution, mental pollution that dwarfs the back yard pollution of tires and old refrigs
by "low IQ deplorables (white and black and brown".
Degraded, degrading entertainment and fake news to match fake histories by Phds.
Tech devices that are "wonderful" but life is actually better more meaningful without.
[Blacks] "whose economic advancement over the last half-century has largely stalled despite
tens of billions and countless government uplift programs." No, Professor, it is Trillions
spend over the last 50 years and millions before that. Countless Whites and other non-Negroid
people have had to step aside in education, military, government, private industry, to let the
lesser person advance and leap frog the accepted virtue-merit path to advancement. AND IT STILL
IS NOT ENOUGN FOR BLECKS.
The obvious solution is to separate into uni-racial/ethnic states. For Whites, this would include
a separate autocephalous, independent state of Caucasians, Asians, and Hindu. This is the Proto-IndoEuropean
Family, related by genes and languages.
1) Asians will grow in power, and either force more fairness towards themselves, or return
to Asia.
2) WN idiots happy about Asians returning to Asia fail to see that Asians will return only when
they control enough of America to manage large parts of it from afar (like the tech industry).
3) 2-3 million top caliber white male Western Expats might just move to Asia, since they may like
Asian women more, and want to be free of SJW idiocy. This is all it takes to fill the alleged
gap Asia has in creativity, marketing, and sales expertise. Asia effectively decapitates the white
West by taking in their best young men and giving them a great life in Asia.
4) America becomes like Brazil...with all economic value colonized by Asians and the white expats
in Asia with mixed-race children. White trashionalists left behind are swiftly exterminated by
blacks, and white women mix with the blacks. America becomes a Brazil minus the fun culture, good
weather, and attractive women. Could agree 1 and 2.
2-3 millions Top caliber White males moving to Asia?
haha, Top caliber White males (American) will stay in America, screw the rest WN, devour all
the resources available, not only in America, but from the rest of the world.
This is a real White so-called Top caliber White males enjoying in Philippines.
I'm guessing the author would be screaming at the top of his lungs if it was Jewish students
being told to go to some state university–instead of Harvard–since we have to make room for blacks.
BTW, your comment "..Recall our own tribulations with violent Indian tribes" needs clarification.
Maybe the tribes got violent because of the 400 treaties Uncle Sam made with the various tribes,
he honored NONE
@jim jones A great part of that is because, well, let's say that the place where those actresses
have got their work done is the same.
Whites have much greater natural variations in hair and eye color, but skin color among East
Asian individuals is more naturally variable (especially when the effect of tanning is considered),
and their facial features and somatotypes are also more diverse in my opinion. For example, East
Asian populations contain some individuals who have what the Japanese call futae mabuta
"double eyelids" and some individuals who have what they call hitoe mabuta "single eyelids,"
whereas White populations contain only individuals who have "double eyelids." Whether such increased
physical variability is positive or negative probably depends on one's viewpoint; in the case
of that eyelid polymorphism, the variant that is found in Asians but not in Whites is generally
considered neutral or even positive when it occurs in male individuals, but negative when it occurs
in female individuals, so plastic surgeons must be overflowing with gratitude for the single eyelid
gene.
@Thorfinnsson The separate school facilities meant a major saving in the costs of school police
and security guards, resource teachers, counselors buses and bus drivers, and layers and layers
of administrators trying to administer the mess.
Separate schools were a lot cheaper in that the black teachers kept the lid on the violence
with physical punishment and the White teachers and students had a civilized environment.
The old sunshine laws kept blacks out of White neighborhoods after dark which greatly reduced
black on White crime. In the north, informal neighborhood watches kept black on White crime to
a minimum until block by block the blacks conquered the cities.
George Wallace said segregation now, segregation forever. I say sterilization now, problem
solved in 80 years.
Asians??? I went to college with the White WASP American young men who were recruited and went
to work in Mountain View and Cupertino and the rest of Santa Clara county and invented Silicon
Valley.
Not one was Asian or even Jewish. And they invented it and their sons couldn't even get into
Stanford because their sons are White American men.
I think the worst thing about affirmative action is that government jobs are about the only
well paid secure jobs that still stick to the 40 hour work week. Government is the largest employer
in the country. And those jobs are "no Whites need apply".
BTW I read the Protocols years before the Internet. I had to make an appointment to go into
a locked section of a research library. I had to show ID. It was brought to me and I had to sit
where I could be seen to read it. I had to sign an agreement that I would not copy anything from
the protocols.
And there it was, the fourth protocol.
"We shall see to it brothers, that we shall see to it that they appoint only the incompetent and
unfit to their government positions. And thus we shall conquer them from within"
@Thomm Only 4) is remotely possible. And Brazilian women are not that attractive, they are
nice looking on postcards, but quite dumpy and weird-looking in person. But that is a matter of
personal taste.
The reason 1,2,3 are nonsensical is that geography and resources matter. Asia simply doesn't
have them, it is not anywhere as attractive to live in as North America or Europe and never will
be. It goes beyond geographic resources, everything from architecture, infrastructure, culture
is simply worse in Asia and it would take hundreds of years to change that.
So why the constant 'go to Asia' or 'Asia is the future'? It might be a temporary escape for
many desperate, self-hating, white Westerners, a place to safely worship as they give up on it
all. Or it could be the endless family links with the Asian women. But that misreads that most
of the Asian families are way to clear-headed to exchange what the are trying to escape for the
nihilistic dreams of their white partners. They are the least likely to go to Asia, they know
it instinctively, they know what they have been trying to escape.
It is possible that the West is on its last legs, and many places are probably gone for good.
But Asia is not going to step up and replace it. It is actually much worse that that – we are
heading for a dramatic downturn and a loss of comfort and civilization. Thank you Baby Boomers
– you are the true end-of-liners of history.
Bright and talented white kids from non-elite families stuck between the Scylla and Charybdis
of Cram-Schooled Study-Asians with no seeming limit to their tolerance for tedium and 90 IQ entitled
blacks is 2017 in a nutshell.
Said in all seriousness: I genuinely feel sorry for blacks but not because of slavery & Jim
Crow. Those were great evils but every group has gone through that. No, I feel sorry for them
because their average IQ of 85–yes, it is–combined with their crass thug culture, which emphasizes
& rewards all the wrong things, is going to keep them mired in dysfunction for decades to come.
Men like Thomas Sowell & Walter Williams have all the information that blacks need to turn themselves
around but they won't listen, I guess because the message is take responsibility for yourselves
and your families and refuse to accept charity in all its different forms to include AA.
some legally mandated homeland of the types advocated by Black Muslims.
Why not pay people to leave? A law change would convert the money supply from bank money to
sovereign money.
AMI's HR2990 would convert the money supply overnight, and nobody would be the wiser.
At that point, new public money could be channeled into funding people to leave. Blacks that
don't like it in the U.S. would be given X amount of dollars to settle in an African country of
their choice. This public money can be formed as debt free, and could also be directed such that
it can only buy American goods. In other words, it can be forced to channel, to then stimulate
the American economy.
In this way, the future works, to then get rid of disruptive future elements.
It always boils down to the money system. There is plenty of economic surplus to then fund
the removal of indigestible elements.
People automatically assume that the money supply must be private bank credit, as that is the
way it always has been. NO IT HAS NOT ALWAYS BEEN THAT WAY.
@helena If Whites leave America and go back to their origin, no one, I repeat, NO ONE would
complain about that. They'd be singing "God Riddance" song all along.
No one wants to migrate to Ukraine, a white country.
No one wants to migrate to Hungary, a white country.
No one wants to migrate to Austria, a white country.
Everyone wants to migrate to the place where there's an over-bloated sense of job availability.
In this case, America offers an ample amount of opportunity.
Let's wait and see how universities in CA populated with merit-based Asian Americans overrule
all universities in the US anytime soon.
Name any state in the US that produces more than two universities (in the Top 50 list) in the
world.
Are you utterly oblivious to the fact that well over 95% of the blacks getting AAed into universities
are then being trained/indoctrinated into being future disruptive activists? Activists with credentials,
more money and connections. Entirely counterproductive and much of it on the taxpayers' dime.
If there is a solution, AA isn't it.
@Rdm Can I count you in on the Calexit movement–followed by the purge of whites? Freed from
the burden of those miserable European-origin Americans, the Asian-Negro-Mestizo marvel will be
a shining light to the rest of the world!
I waited to make this comment until the serious thinkers had been here. Did anyone notice the
dame in the picture is giving us the finger? I did a little experiment to see if my hand could
assume that position inadvertently and it couldn't. It aptly illustrates the article, either way.
Name any state in the US that produces more than two universities (in the Top 50 list) in
the world.
No state can compete against CA. You wonder why?
If you took the land mass of CA and imposed it on the U.S. East Coast between Boston and South
Carolina, I don't think it'd be a problem to surpass California in any Top 50 University competition.
Here's a simpler and more effective solution-KILL ALL NIGGERS NOW. See, not so difficult, was
it? Consider it a Phoenix Program for the American Problem. Actually, here's another idea-KILL
ALL LIBERALS NOW. That way, good conservative people of different races, sexes, etc., can be saved
from the otherwise necessary carnage. Remember, gun control is being able to hit your target.
The affirmative action game may well serve the interests of the cognitive elite whites, but
it has been a disaster for the rest of white America. I have a better solution.
Give the feral negroes what they have been asking for. Pull all law enforcement out of negro
hellholes like Detroit and South Chicago and let nature take its course.
Send all Asians and other foreigners who not already citizens back to their homelands. End
all immigration except very special cases like the whites being slaughtered in South Africa or
the spouse of a white American male citizen.
@Rdm I am not referring to guys like in the picture.
I am referring to the very topmost career stars, moving to Asia for the expat life. Some of
that is happening, and it could accelerate. Only 2-3 million are needed.
@Kyle McKenna " And as he copiously documented, whites have suffered far more discrimination
than asians have. The difference is, whites are more brainwashed into accepting it. "
And that's the function of the fraudulent, impossible '6M Jews, 5M others, gas chambers'.
"The historical mission of our world revolution is to rearrange a new culture of humanity
to replace the previous social system. This conversion and re-organization of global society
requires two essential steps: firstly, the destruction of the old established order, secondly,
design and imposition of the new order. The first stage requires elimination of all frontier
borders, nationhood and culture, public policy ethical barriers and social definitions, only
then can the destroyed old system elements be replaced by the imposed system elements of our
new order.
The first task of our world revolution is Destruction. All social strata and social formations
created by traditional society must be annihilated, individual men and women must be uprooted
from their ancestral environment, torn out of their native milieus, no tradition of any type
shall be permitted to remain as sacrosanct, traditional social norms must only be viewed as
a disease to be eradicated, the ruling dictum of the new order is; nothing is good so everything
must be criticized and abolished, everything that was, must be gone."
from: 'The Spirit Of Militarism', by Nahum Goldmann Goldmann was the founder & president of the World Jewish Congress
@Rdm Almost all white people would rather migrate to Austria, Hungary, and the Ukraine than
the following citadels of civilization:
Angola
Botswana
Burundi
Cameroon
Central African Republic
Djibouti
Ethiopia
Equatorial Guinea
Eritrea
Gabon
Ghana
Kenya
Niger
Nigeria
South Africa
Sudan
Swaziland
Tanzania
Uganda
Zambia
- Without US taxpayers money CA would be a 3rd world country completely filled with unemployable
& dumb illegal immigrants.
- Think about this brief list made possible by the US taxpayers / federal government, money
CA would not get and then tens of thousands of CA people would lose their jobs (= lost CA tax
revenues):
aerospace contracts, defense contracts, fed gov, software contracts, fed gov airplane orders,
bases, ports, money for illegal aliens costs, federal monies for universities, 'affirmative action
monies, section 8 housing money, monies for highways, monies for 'mass transportation', monies
to fight crime, monies from the EPA for streams & lakes, monies from the Nat. Park Service, monies
for healthcare, monies for freeloading welfare recipients, and all this is just the tip of the
iceberg
- Not to mention the counties in CA which will not want to be part of the laughable 'Peoples
Republic of California'.
- And imagine the 'Peoples Republic of California Army', hilarious.
CA wouldn't last a week without other peoples money.
It's particularly unfortunate that Asians, who can hardly be blamed for the plight of America's
Blacks, are the ones from whom the "affirmative action" #groidgeld is extracted.
@Diversity Heretic My impression and overall experience from interacting with White Americans
is good in general. I have a very distinct view on both White Americans and Europeans. I'd come
back later.
I don't recommend purging of Whites in America. Neither do I prohibit immigration of all people.
But I do wish "legal" immigration from all parts of the world to this land. But I also understand
why people are fed up with White America.
There is a clear distinction between Europeans and White Americans. White Americans born and
bred here are usually an admixture of many European origins. They usually hide their Eastern European
origin and fervently claim German, French, English whenever possible -- basically those countries
that used to be colonial masters in the past.
White Americans are generally daring, optimistic and very open-minded. Usually when you bump
into any White Americans born and bred here, you can sense their genuine hospitality.
Europeans, usually fresh White immigrants in this land, tend to carry over their old mentality
with a bit of self-righteous attitude to patronize and condescend Americans on the ground that
this is a young country.
My former boss was Swiss origin, born in England, and migrated to America. If there's an opportunity
cost, he'd regale his English origin. If there's a Swiss opportunity, he'd talk about his ancestry.
He'd bash loud, crazy Americans while extoling his European majesty. He became a naturalized American
last year for tax purposes so that his American wife can inherit if he kicks the bucket.
Bottom line is, every immigrant to the US, in my honest opinion, is very innocent and genuinely
hard working. They have a clear idea of how they like to achieve their dreams here and would like
to work hard. It seems after staying here for a while, they all change their true selves to fit
into the existing societal structure, i.e., Chris Hemsworth, an Australian purposely trained to
speak American English in Red Dawn, can yell "This is our home" while 4th generation Asian Americans
will be forced to speak broken English. This is how dreams are shaped in America.
Coming back to purge of Whites, I only wish those self-righteous obese, bald, bottom of the
barrel, living on the alms Whites, proclaiming their White skin, will go back to their origin
and do something about a coming flood of Muslim in their ancestral country if they're so worried
about their heritage.
@Thomm No, he just wants the street-defecating hangers-on like you to go back and show how
awesome you claim you are in your own country by making a success of it rather than milking all
of the entitlements and affirmative action and other programs of literal racial advantage given
to you by virtue of setting foot in someone else's country.
- Without US taxpayers money CA would be a 3rd world country completely filled with unemployable
& dumb illegal immigrants.
- Think about this brief list made possible by the US taxpayers / federal government, money
CA would not get and then tens of thousands of CA people would lose their jobs (= lost CA tax
revenues):
aerospace contracts, defense contracts, fed gov, software contracts, fed gov airplane orders,
bases, ports, money for illegal aliens costs, federal monies for universities, 'affirmative action
monies, section 8 housing money, monies for highways, monies for 'mass transportation', monies
to fight crime, monies from the EPA for streams & lakes, monies from the Nat. Park Service, monies
for healthcare, monies for freeloading welfare recipients, and all this is just the tip of the
iceberg
- Not to mention the counties in CA which will not want to be part of the laughable 'Peoples
Republic of California'.
- And imagine the 'Peoples Republic of California Army', hilarious.
CA wouldn't last a week without other peoples money.
Calexit? Please, pretty please. So you're talking about Calexit in AA action?
Let us play along.
If CA is existing solely due to Fed Alms, I can agree it's the tip of the iceberg. But we're
talking about Universities, their performance and how AA is affecting well qualified students.
Following on your arguments,
UC Berkeley receives $373 Millions (Federal Sponsorship) in 2016.
Harvard University, on the other hand, receives $656 millions (Federal sponsorship) in 2012.
I'm talking about how Universities climb up in World ranking, based upon their innovations,
productivity, research output, etc etc etc. Which to me, is reflective of what kind of students
are admitted into the programs. That's my point.
If you want to talk about Calexit, you'd better go and refresh your reading comprehension ability.
The thing that is forgotten is that white Americans DO NOT need the Africans in any way whatsoever.
There is NOTHING in Detroit that we want – we abandoned it deliberately and have no interest in
ever returning.
On the other hand, what do the Africans need from us?
Food. We own and operate all food production.
Medicine. Ditto.
Clean water. Look at Flint.
Sanitation services. Look at anywhere in Africa.
Order.
To put a stop to African behavior from Africans is an idiot's dream. They will never stop being
what they are. They simply cannot. So if we cannot expel them, we must control them. When they
act up, we cut off their food, medicine, water, and sewer services. Build fences around Detroit
and Flint. Siege. After a month or two of the Ethiopian Diet, the Africans in Detroit will be
much more compliant.
@Thomm You just want intra-white socialism so you can mooch off of productive whites. Thomm=the
girly boy blatherings of a White Libertarian Cuck
The benefit to the Historic Native Born White American Working Class of being voted into a
White Racial Minority in California by Chinese "Americans" Korean "Americans" .Hindu "Americans"
Sihk "Americans" and Iranian "Americans"?
Answer:0 . Bring back the Chinese Legal Immigrant Exclusion Act!!!
Two Great pro-White Socialist Labor Leaders:Denis Kearney and Samuel Gompers go read Denis
Kearney's Rebel Rousing speeches google Samuel Gompers' Congressional Testimony in favor of the
passage of The Chinese Legal Immigrant Exclusion Act
As some have pointed out, the trouble with appeasement is, it never ends. Those who are used
to the handouts will always want more. There's the saying parents tend to strengthen the strong
and weaken the weak, that's what paternalistic policies like affirmative action and welfare do
to a society. It creates a cycle of dependency.
Those who think multiculturalism coupled with identity politics is a good idea need to take
a good look at Malaysia, arguably the most multicultural country outside the US. The country is
in Southeast Asia, with roughly 30m people, roughly 60% ethnic Malay(100% muslim), 23% Chinese(mostly
buddhist or christian), brought in by the British in the 1800s to work the rubber plantations
and tin mines, and 7% Indian(mostly Hindu), brought in by the British to work the plantations
and civil service.
In 1957 the Brits left and left the power in the hands of the ethnic Malays. The Chinese soon
became the most successful and prosperous group and dominated commerce and the professional ranks.
In 1969 a major race riot broke out, the largely rural and poor Malays decided to "take back what's
theirs", burnt, looted and slaughtered many ethnic Chinese. After the riot the government decided
the only way to prevent more riots is to raise the standard of living for the Malays. And they
began a massive wealth transfer program through affirmative action that heavily favors ethnic
Malays. First, all civil service jobs were given to only ethnic Malays, including the police and
military. Then AA was instituted in all local universities where Malays with Cs and Ds in math
and science were given preference over Chinese with all A's to all the engineering, medicine and
law majors. Today no one in their right mind, not even the rich Malays, want to be treated by
a Malay doctor. I know people who were maimed by one of these affirmative actioned Malay "neurosurgeons"
who botched a simple routine procedure, and there was no recourse, no one is allowed to sue.
Thanks to their pandering to the Malay majority and outright voting fraud, the ruling party
UMNO has never lost an election and is today the longest serving ruling party in modern history.
Any dissent was stifled through the sedition act where dissidents are thrown in jail, roughed
up, tossed down 14th story buildings before they even go to trial. All media is strictly controlled
and censored by the government, who also controls the military, and 100% of the country's oil
production, with a large portion of the profit of Petronas going to the coffers of the corrupt
Malay government elites, whatever's left is given to hoi polloi Malays in the form of fluff job
positions created in civil service, poorly run quasi-government Malay owned companies like Petronas,
full scholarships to study abroad for only ethnic Malays, tax free importation of luxury cars
for ethnic Malays, and when the government decided to "privatize" any government function like
the postal service or telcom, they gave it in the form of a monopoly to a Malay owned company.
All government contracts e.g. for infrastructure are only given to Malay owned companies, even
as they have zero expertise for the job. The clever Chinese quickly figured out they could just
use a Malay partner in name only to get all government contracts.
As opposed to the US where affirmative action favors the minority, in Malaysia AA favors the
majority. You know it can't last. The minority can only prop up the majority for so long. Growth
today is largely propped up by oil income, and the oil reserve is dwindling. Even Mahathir the
former prime minister who started the most blatant racial discrimination policy against the Chinese
started chastising the Malays of late, saying they've become too lazy and dependent on government
largess.
Yet despite the heavy discrimination, the Chinese continued to thrive thanks to their industriousness
and ingenuity, while many rural Malays not connected with the governing elite remain poor -- classic
case of strengthening the strong and weakening the weak. According to Forbes, of the top 10 richest
men in Malaysia today, 9 are ethnic Chinese, only 1 is an ethnic Malay who was given everything
he had. Green with envy, the ethnic Malays demanded more to keep the government in power. So a
new law was made – all Chinese owned businesses have to give 30% ownership to an ethnic Malay,
just like that.
Needless to say all this racial discrimination resulted in a massive brain drain for the country.
many middle class Indians joined the Chinese and emigrated en masse to Australia, NZ, US, Canada,
Europe, Singapore, HK, Taiwan, Japan. The ones left are often destitute and poor, heavily discriminated
against due to their darker skin, and became criminals. Al Jazeera recently reported that the
7% ethnic Indians in Malaysia commit 70% of the crime.
To see how much this has cost Malaysia -- Singapore split off from Malaysia 2 years after their
joint independence from Britain and was left in destitute as they have no natural resources. But
Lee Kuan Yew with the help of many Malaysian Chinese who emigrated to Singapore turned it into
one of the richest countries in the world in one generation with a nominal per capita GDP of $53k,
while Malaysia is firmly stuck at $9.4k, despite being endowed with natural resources from oil
to tin and beautiful beaches. The combination of heavy emigration among the Chinese and high birthrate
among the muslim Malays encouraged by racialist Mahathir, the Chinese went from 40% of the population
in 1957 to 23% today. The Indians went from 11% to 7%.
I fear that I'm seeing the same kind of problem in the US. It's supremely stupid for the whites
to want to give up their majority status through open borders. Most Asians like me who immigrated
here decades ago did it to get away from the corrupt, dishonest, dog-eat-dog, misogynistic culture
of Asia. But when so many are now here, it defeats the purpose. The larger the immigrant group,
the longer it takes to assimilate them. Multiculturalism is a failed concept, especially when
coupled with identity politics. Affirmative Action does not work, it only creates a toxic cycle
of dependency. The US is playing with fire. We need a 20 year moratorium on immigration and assimilate
all those already here. Otherwise, I fear the US will turn into another basketcase like Malaysia.
@Tom Welsh There were only about one million Indians living in what is the United States in
1500. There are now 3 million living in much better conditions than in 1500.
I would be willing to accept non White immigration if the non White immigrants and our government
would end affirmative action for non Whites.
Asians are discriminated against in college admissions. But in the job market they have affirmative
action aristocratic status over Whites.
@Diversity Heretic John Derbyshire has made similar arguments--racial preferences are the
price for social peace. But, as Steve Sailer has pointed out, we're running out of white and Asian
children to buffer black dysfunction and Asians are going to get less and less willing to be "sacrificial
lambs" for a black underclass that they did nothing to create and that they despise.
There are other ways to control the black underclass. You can force the talented ones to remain
in their community and provide what leadership they can. Black violence can be met with instant
retributive counter-violence. (Prior to the 1960s most race riots were white on black.) Whites
can enforce white norms on the black community, who will sort-of conform to them as best they
are able.
Finally, Rudyard Kipling had a commentary on Danegeld. It applies to paying off dysfunctional
domestic minorities just as much to invading enemies.
"We never pay any-one Dane-geld,
No matter how trifling the cost;
For the end of that game is oppression and shame,
And the nation that pays it is lost!"
admitting academically unqualified blacks to elite schools is, at core, a policy to protect
the racial peace and, as such, has nothing to do with racial justice,
The Black are protesting relentlessly and loudly verbally and thru assertive actions about
the racial discrimination they have been facing. I have never seen those academically unqualified
blacks admitted to the elite schools have stood up using themselves as shiny examples to refute
the discrimination allegations the Black made against the White.
While the policy to protect the racial peace by admitting academically unqualified blacks to
elite schools failed miserably, the restricting the smart and qualified Asians to elite schools
is blatantly racial injustice practice exercised in broad day light with a straight face lie.
The strategy is to cause resentment between the minorities so that the White can admitting their
academically unqualified ones to elite schools without arousing scrutiny.
Because KKK were Southern Democrats, Democratic Party is forever the KKK party. Never mind
Democrats represented a broad swatch of people.
And Dinesh finds some parallels between Old Democrats and Nazi ideology, therefore Democrats are
responsible for Nazism. I mean
Doesn't he know that parties change? Democratic Party once used to be working class party.
Aint no more.
GOP used to be Party of Lincoln. It is southern party now, and most loyal GOP-ers are Southerns
with respect for Confederacy. GOP now wants Southern Neo-Confed votes but don't want Confed memorials.
LOL.
Things change.
Jesse Helms and Strom Thurmond came over to the GOP for a reason.
Dinesh seems to be stuck in 'caste' mentality. Because Dems once had KKK on its side, Democratic
Party is forever cast or 'casted' as KKK. And now, 'Democrats are real Nazis'.
Actually, the real supremacism in America at the moment seems to be AIPAC-related.
Anyway, there were leftist elements in National Socialism, but its was more right than left.
Why? Because in the hierarchy of ideological priorities, the most important core value was
the 'Aryan' Tribe. Socialized medicine was NOT the highest value among Nazis. Core conviction
was the ideology of racial identity and unity. Thus, it was more right than left.
Just because National Socialism had some leftist elements doesn't make it a 'leftist' ideology.
Same is true of Soviet Communism. Stalin brought back high culture and classical music. He
favored traditionalist aesthetics to experimental or avant-garde ones. And Soviets promoted some
degree of Russian nationalism. And even though communists eradicated certain aspects of the past,
they also restored respect for classic literature and culture. So, does that mean USSR was 'conservative'
or 'rightist'? No, it had some rightist elements but its core ideology was about class egalitarianism,
therefore, it was essentially leftist.
@Joe Wong All the Whites and Asians who are admitted to the top 25 schools are superbly qualified.
There are so many applicants every White and Asian is superbly qualified.
The entire point of affirmative action is that Asians and Whites are discriminated against
in favor of blacks and Hispanics. Harvard proudly proclaims that is now majority non White.
Don't worry, the Jews decided long ago that you Asian drones would have medicine and tech,
Hispanics construction, food, trucking,and cleaning and Hispanics and blacks would share government
work and public education.
Whites will gradually disappear and the 110 year old Jewish black coalition will control the
Asians and Hispanics through black crime and periodic riots.
@Wally So you are a tough guy, and never give in anything to anyone in your life? It seems
the Jews have similar view as yours, the Jews insist that if they give in an inch to those Holocaust
deniers, they will keep demanding more & more, at the beginning the Holocaust deniers will demand
for the evidence, then they will demand the Jews are at fault, then they will demand the Nazi
to be resurrected, then they will demand they can carry out Holocaust against anyone they don't
like, Pretty soon they will demand they to be treated like the pigs in the Orwellian's Animal
Farm.
@Priss Factor Hell with those 'smart Asians'. They are among the biggest Proglob a-holes.
Asians have servile genes that seek approval from the power. They are status-freaks.
They make perfect collaborators with the Glob.
Under communism, they made the most conformist commies.
Under Japanese militarism, they made the most mindless military goons who did Nanking.
Under Khmer Rouge, they were biggest looney killers.
Under PC, they make such goody good PC dogs.
If the prevailing culture of US was patriotic and conservatives, Asians would try to conform
to that, and that wouldn't be so bad.
But since the prevailing culture is PC, these yellow dogs are among the biggest homomaniacal
PC tards.
Hell with them. Yellow dogs voted for Obama and Hillary in high numbers. They despise, hate,
and feel contempt for white masses and working class. They are servitors of the empire as Darrell
Hamamoto said. He's one of the few good guys.
https://www.youtube.com/watch?v=1bs_BbIBCoY
Just look at that Francis Fukuyama, that slavish dog of Soros. He's so disgusting. And then,
you got that brown Asian tard Fareed Zakaria. What a vile lowlife. And that fat Jeer Heet who
ran from dirty browns shi**ing all over the place outdoors to live with white people but bitches
about 'white supremacy'. Well, the fact that he ran from his own kind to live with whites must
mean his own choice prefers white folks. His immigration choice was 'white supremacism'. After
all, he could have moved to black Africa. Why didn't he?
PS. The best way of Affirmative Action is to limit it only to American Indians and Blacks of
slave ancestry. That's it.
Also, institutions should OPENLY ADMIT that they do indeed discriminate to better represent
the broader population. Fair or not, honesty is a virtue. What is most galling about AA is the
lies that says 'we are colorblind and meritocratic but...' No more buts. Yes, there is discrimination
but to represent larger population. Okay, just be honest. Asia is a big continent and Asians of
different ethnicity have very different voting patterns due to their culture and history. Japanese-Americans
tend to be the most liberal ethnic group of all Asian groups because of their experience with
internment during WWII. Somehow they conveniently forgot that it was a Democrat president who
put them in internment, and are now putting the blames squarely on the right for what happened.
These Japanese-Americans are drinking the kool-aid big time, but in the 90s I remember a Japanese
prime minister got in big trouble for saying America's biggest problem is we have too many blacks
and hispanics dragging us down.
Filipinos, Hmongs and other Southeast Asians tend to be poor and rely on government largess
to a certain extent, and also benefit from affirmative action at least in the state of CA, they
also tend to be liberal.
In this election cycle Indian-Americans have become the most vocal anti-Trumpers. From Indian
politicians from WA state like Kshama Sawant, Pramila Jayapal to Indian entertainers like Aziz
Ansari, Hasan Minaj, Kumail Nanjani, to Silicon Valley techies like Calexit mastermind VC Shervin
Pishevar, Google CEO Sundra Pichai, all are socialist libtards. In my local election, several
Indians are running for city council. All are first generation, all Democrats and champions of
liberal policies. It's as if they have amnesia(or just lower IQ), not remembering that socialism
was why they had to leave the shithole India to begin with. A Korean American is running as a
Republican.
There are Chinese idiots like Ted Lieu and other asians who've gone to elite schools therefore
drinking the kool-aid and insisted AA is good for Asian Americans, but most Koreans, Vietnamese
and Chinese tend to be more conservative and lean Republican. During the Trump campaign Breitbart
printed a story about a group of Chinese Americans voicing their support for Trump despite his
anti-China rhetoric because they had no intention of seeing the US turned into another socialist
shithole like China.
Per the NYT a major reason Asians vote Republican is because of AA. Asians revere education,
esp. the Chinese and Koreans, and they see holistic admission is largely bullshit set up by Jews
to protect their legacy status while throwing a few bones to under qualified blacks and hispanics.
Unfortunately it didn't seem to dampen their desire to immigrate here. Given that there are 4
billion Asians and thanks to open borders, if it weren't for AA all our top 100 schools will be
100% Asian in no time. I suggest we first curtail Asian immigration, limit their number to no
more than 10,000 a year, then we can discuss dismantling AA.
California sends far more to Washington than it sends back. Also, there is no correlation between
percentage of federal land and dependence on federal funding. If there were, Delaware would be
the least dependent state in the US.
California sends far more to Washington than it sends back. Also, there is no correlation between
percentage of federal land and dependence on federal funding. If there were, Maine would be among
the least dependent states in the US.
@Astuteobservor II The Indian tribe in tech is known to favor Indians in hiring. I've read
from other Indian posters elsewhere that Indian managers like to hire Indian underlings because
they are easier to bully.
Indian outsourcing firms like Infosys, TCS, Wipro are like 90% Indian, mostly imported directly
from India, with token whites as admin or account manager.
@Carlton Meyer That's pretty funny. The guy's got balls. Probably son of some corrupt Chinese
government official used to being treated like an emperor back home, ain't taking no shit from
black folks.
I suppose this is what happens when universities clamor to accept foreign students because
they are full pay. His tuition dollar is directly subsidizing these affirmative action hacks,
who are now preventing him from studying. He has fully paid for his right to tell them to STFU.
@Beckow Romans did not think Europe was a nice place to live, full of bloodthirsty barbarians,
uneducated, smelly, dirty, foul mouth and rogue manner, even nowadays a lot of them cannot use
full set of tableware to finish their meal, a single fork will do, it is a litte more civilized
than those use fingers only.
After a millennium of dark age of superstition, religious cult suppression, utter poverty medieval
serf Europe, it followed by centuries of racial cleanses, complete destruction of war, stealing
and hypocrisy on industrial scale, this time not only restricted to Europe the plague flooded
the whole planet.
Even nowadays the same plague from Europe and its offshoots in the North America is threatening
to exterminate the human beings with a big bang for their blinding racial obligatory. The rest
of the world only can hope this plague would stay put in North America and Europe, so the rest
world can live in peace and prosperity.
Asians receive federal entitlements the same as the other protected class groups of diversity.
Diversity ideology lectures us that Asians are oppressed by Occidentals.
1. Preferential US immigration, citizenship, and asylum policies for Asian people
2. Federal 8a set-aside government contracts for Asian owned businesses
3. Affirmative Action for Asians especially toward obtaining government jobs
4. Government anti-discrimination laws for Asians
4. Government hate speech crime prosecutions in defense of Asians
5. Sanctuary cities for illegal Asians, and other protected class groups of diversity
6. Asian espionage directed at the US is common, and many times goes unprosecuted
7. American trade policy allows mass importation of cheap Asian products built with slave labor
8. Whaling allowance for some Asian ethnic groups
9. Most H1-B visas awarded to Asians
The benefit to the Historic Native Born White American Working Class of being voted into a
White Racial Minority in California by Chinese "Americans"...Korean "Americans"....Hindu "Americans"...Sihk
"Americans"...and Iranian "Americans"?
Answer:0.... Bring back the Chinese Legal Immigrant Exclusion Act!!!
Two Great pro-White Socialist Labor Leaders:Denis Kearney and Samuel Gompers...go read Denis Kearney's
Rebel Rousing speeches...google Samuel Gompers' Congressional Testimony in favor of the passage
of The Chinese Legal Immigrant Exclusion Act... It is MUCH better to be a libertarian than to
be a Nationalist-Leftist. You have effectively admitted that you want intra-white socialism since
you can't hack it yourself.
Socialists = untalented losers.
Plus, I guarantee that your ancestors were not in America since 1776. You are just some 2nd-gen
Polack or something.
@Priss Factor Here is one 'smart Asian' who is not a Self-Righteous Addict of Proglobalism,
but what a clown.
https://www.youtube.com/watch?v=mNrytSEyUoY
Dineshisms are always funny as hell.
Because KKK were Southern Democrats, Democratic Party is forever the KKK party. Never mind
Democrats represented a broad swatch of people.
And Dinesh finds some parallels between Old Democrats and Nazi ideology, therefore Democrats are
responsible for Nazism. I mean...
Doesn't he know that parties change? Democratic Party once used to be working class party.
Aint no more.
GOP used to be Party of Lincoln. It is southern party now, and most loyal GOP-ers are Southerns
with respect for Confederacy. GOP now wants Southern Neo-Confed votes but don't want Confed memorials.
LOL.
Things change.
Jesse Helms and Strom Thurmond came over to the GOP for a reason.
Dinesh seems to be stuck in 'caste' mentality. Because Dems once had KKK on its side, Democratic
Party is forever cast or 'casted' as KKK. And now, 'Democrats are real Nazis'.
Actually, the real supremacism in America at the moment seems to be AIPAC-related.
Anyway, there were leftist elements in National Socialism, but its was more right than left.
Why? Because in the hierarchy of ideological priorities, the most important core value was
the 'Aryan' Tribe. Socialized medicine was NOT the highest value among Nazis. Core conviction
was the ideology of racial identity and unity. Thus, it was more right than left.
Just because National Socialism had some leftist elements doesn't make it a 'leftist' ideology.
Same is true of Soviet Communism. Stalin brought back high culture and classical music. He
favored traditionalist aesthetics to experimental or avant-garde ones. And Soviets promoted some
degree of Russian nationalism. And even though communists eradicated certain aspects of the past,
they also restored respect for classic literature and culture. So, does that mean USSR was 'conservative'
or 'rightist'? No, it had some rightist elements but its core ideology was about class egalitarianism,
therefore, it was essentially leftist. "Stalin brought back high culture and classical music.
He favored traditionalist aesthetics to experimental or avant-garde ones."
Priss, you haven't the first clue what you're talking about, here. Stalin didn't favor "traditionalist
aesthetics" – he favored vulgar pop-crap.
@Joe Franklin Asians receive federal entitlements the same as the other protected class groups
of diversity.
Diversity ideology lectures us that Asians are oppressed by Occidentals.
1. Preferential US immigration, citizenship, and asylum policies for Asian people
2. Federal 8a set-aside government contracts for Asian owned businesses
3. Affirmative Action for Asians especially toward obtaining government jobs
4. Government anti-discrimination laws for Asians
4. Government hate speech crime prosecutions in defense of Asians
5. Sanctuary cities for illegal Asians, and other protected class groups of diversity
6. Asian espionage directed at the US is common, and many times goes unprosecuted
7. American trade policy allows mass importation of cheap Asian products built with slave labor
8. Whaling allowance for some Asian ethnic groups
9. Most H1-B visas awarded to Asians That is completely false. You just memorized that from some
bogus site.
Section 8a is used more by white women than by Asians, and Asians get excluded from it due
to high income. It should be done away with altogether, of course.
Asians face discrimination in University admissions, as the main article describes.
H1-Bs are awarded to Asians because white countries don't produce enough people who qualify.
Plus, Asian SAT scores are consistently higher than whites. That proves that Asian success
was not due to AA.
@Thomm Green isn't a color that suits you. You're a subcontinental hanger-on who's only able
to garner any success in any western country due to an anarcho-tyranny in enforcement against
ethnonepotism as well as lavish handouts in the form of all sorts of party favors.
There are very few non-white groups that could do any well on a level playing field with equal
enforcement against nepotism, and yours isn't one of them. Your country? Sad!
Whites will gradually disappear and the 110 year old Jewish black coalition will control
the Asians and Hispanics through black crime and periodic riots.
I don't think this is correct
Since California already has (very roughly) the future demographics you're considering, I think
it serves as a good test-case.
The Hispanic and Asian populations have been growing rapidly, and they tend to hold an increasing
share of the political power, together with the large white population, though until very recently
most of the top offices were still held by (elderly) whites. Whites would have much more political
power, except that roughly half of them are still Republicans, and the Republican Party has almost
none.
In most of the urban areas, there's relatively little black crime these days since so many
of the blacks have been driven away or sent off to prison. I'd also say that major black riots
in CA are almost unthinkable since many of the local police forces are heavily Hispanic: they
don't particularly like blacks, and might easily shoot the black rioters dead while being backed
up by the politicians, and many of the blacks probably recognize this. Admittedly, CA always had
a relatively small black population, but that didn't prevent enormous black crime and black riots
in the past due to the different demographics.
Meanwhile, Jewish-activists still possess enormous influence over CA politics, but they exert
that influence through money and media, just like they do everywhere else in the country.
@F the media that is actually true about indians. I have first hand account of a 100+ tech
dept getting taken over by indians in just 3 years :/ but that is not a "quota" that is just indians
abusing their power once in position of power.
@VinteuilPriss, you haven't the first clue what you're talking about, here. Stalin didn't
favor "traditionalist aesthetics" – he favored vulgar pop-crap.
Right.. Ballet, Prokofiev, Shostakovich, and classic literature. That's some pop crap.
Soviet Culture was about commie Lena Dunhams.
Now, most of Soviet culture was what might be called kitsch or middlebrow stuff, but it was
not 'pop crap' as known in the West.
@Saxon Green isn't a color that suits you. You're a subcontinental hanger-on who's only able
to garner any success in any western country due to an anarcho-tyranny in enforcement against
ethnonepotism as well as lavish handouts in the form of all sorts of party favors.
There are very few non-white groups that could do any well on a level playing field with equal
enforcement against nepotism, and yours isn't one of them. Your country? Sad! Whatever helps you
sleep at night..
Yesterday I was called a Jew. Today, it is Indian. In reality, I am a white American guy.
You white trashionalists can't get your stories straight, can you? Well, WNs are known for
having negro IQs.
Asians don't get affirmative action. They outscore whites in the SAT.
@Thomm That is completely false. You just memorized that from some bogus site.
Section 8a is used more by white women than by Asians, and Asians get excluded from it due
to high income. It should be done away with altogether, of course.
Asians face discrimination in University admissions, as the main article describes.
H1-Bs are awarded to Asians because white countries don't produce enough people who qualify.
Plus, Asian SAT scores are consistently higher than whites. That proves that Asian success
was not due to AA. You have reading comprehension problems to have confused Federal 8A government
contacts with Section 8 housing.
8A contracts are federal contracts granted to "socially and economically disadvantaged individual(s)."
The business must be majority-owned (51 percent or more) and controlled/managed by socially
and economically disadvantaged individual(s).
The individual(s) controlling and managing the firm on a full-time basis must meet the SBA
requirement for disadvantage, by proving both social disadvantage and economic disadvantage.
Definition of Socially and Economically Disadvantaged Individuals
Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice
or cultural bias because of their identities as members of groups without regard to their individual
qualities. The social disadvantage must stem from circumstances beyond their control.
In the absence of evidence to the contrary, the following individuals are presumed to be socially
disadvantaged:
• Black Americans;
• Hispanic Americans (persons with origins from Latin America, South America, Portugal and
Spain);
• Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians);
• Asian Pacific Americans (persons with origins from Japan, China, the Philippines, Vietnam, Korea,
Samoa, Guam, U.S. Trust Territory of the Pacific Islands [Republic of Palau], Commonwealth of
the Northern Mariana Islands, Laos, Cambodia [Kampuchea], Taiwan, Burma, Thailand, Malaysia, Indonesia,
Singapore, Brunei, Republic of the Marshall Islands, Federated States of Micronesia, Macao, Hong
Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru);
• Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri
Lanka, Bhutan, the Maldives Islands or Nepal);
• And members of other groups designated from time to time by the SBA.
@Joe Wong Romans lived in Europe, get an atlas, Rome is in Europe. I will skip over your silly
summaries of European history, we all can do it to any civilization all day. Pointless. Try China.
Oh, I forgot, nobody knows much Chinese up and downs because it was mostly inconsequential.
If you call others 'racist' all the time, they might just not take your seriously. Or simply
say, fine, if liking one's culture is now 'racism', if it is a white culture, then count me in.
The rest of the world is tripping over itself to move – literally to physically move – to Europe
and North America. Why do you think that is?
I'd also say that major black riots in CA are almost unthinkable since many of the local
police forces are heavily Hispanic: they don't particularly like blacks, and might easily shoot
the black rioters dead
Oh, would you stop being a make-believe pundit, Ron? That is some commentary you copped from
an OJ-era LA Times expose. You've had one conversation with a police officer in your life, and
that was over an illegal left term outside the Loma Linda Starbucksand culminated in disturbing
the peace when exited your Bentley yelling "DO YOU KNOW WHO I AM?!?!" at the top of your lungs
for 4 minutes.
Whenever you've had a nudity-mandatory, eyes-wide-shut, type globalist-soiree at your palatial
mansion, the only people you invited were politicians, lawyers, Ivy-league economists, Silicon
Valley tech nerds and hookers.
@Joe Franklin We've been over this. 8a is not given to anyone with over $250,000 in assets,
as your own link indicates. This means most Asians can't use it anyway (not that they need to).
The whole program should be done away with, of course.
What is funny is that you can't accept that Asians have higher SAT scores than whites, which
pretty much proves that they can (and do) outperform without AA. You WN idiots can't come to terms
with that.
But Section 8a should be removed just so that WN wiggers don't have anything to hide behind,
since Asians don't need it to excel.
@Thomm These untalented Socialists you refer to would include the vast majority of America
1969 90 percent Native Born White America .a White Nation that placed two Alpha Native Born White
American Males on the Moon .ten more after that. Seems that Socialism worked just fine.
If you prefer an Asian Majority you can always pack your bags and pick the Asian Nation of
your choice.
@Ron Unz hmm i don't know that will be the case nationally. Southern cities like Atlanta will
not have hispanic or white govt. Same with nyc, no need for blacks in harlem or bronx to leave
if government aid continues to pay for rent controlled affordable housing. Same case can be made
for most large northern cities like chicago, detroit, boston, philadelphia, DC, etc.
So with future aa population of 14%, that's 60 million blacks in america in 2060 timeframe,
although that will have an increasing amount of immigration from africa, which tends to be more
educated (at least 1st and 2nd generation).
Asians will be about 8%, so that's a poweful community of 40 million. I see tech and wall street
with increasing amount of asian representations.
What i would be interested in seeing if there will any maverick asian billionaires that could
disrupt the narrative.
This article may tend to take your mind off the real racial injustice at Harvard. In an article
"Affirmative Action Battle Has a New Focus: Asian-Americans" in the NY Times, August 3, 2017 ANEMONA
HARTOCOLLIS and STEPHANIE SAUL wrote ""The Harvard lawsuit likens attitudes toward Asian-Americans
to attitudes toward Jews at Harvard, beginning around 1920, when Jews were a high-achieving minority.
In 1918, Jews reached 20 percent of the Harvard freshman class, and the university soon proposed
a quota to lower the number of Jewish students."" In my humble opinion this is a misleading statement
which implies that the admission of Jews remained below 20% in the years after 1918. In fact Hillel
reports that in recent years the admission of jews to Harvard has been around 25% of the class.
This means that almost half of the class are white and half of this white group are Jews. That
seems like an amazing over-representation of Jews who are only 2% of our population. So, at least
as many Jews as Asians are admitted to Harvard. No wonder the Asians are upset. I note that this
article does not point out this Jewish bias in admissions at Harvard and neither did the Asians.
Is this another manifestation of political correctness? Or is it an egregious example of racism?
This problem is the real elephant in the room. This is the Jewish racism that dare not speak its
name. Until lately.
@Truth Truth, you is so wise and true. You's right. Them Russian dummies didn't have no vibrant
black folks to make fun music that could make them wiggle their butts all their night long. So,
they grew stale and bored and drank too much vodka, caught fish with penis, and wrestled with
bears and didn't have the all the cool stuff like the US has.
All the world needs to be colonized by superior Negroes cuz folks will just die of boredom.
At least if you get killed by Negroes, it's exciting-like.
hmm i don't know that will be the case nationally. Southern cities like Atlanta will not
have hispanic or white govt. Same with nyc, no need for blacks in harlem or bronx to leave
if government aid continues to pay for rent controlled affordable housing. Same case can be
made for most large northern cities like chicago, detroit, boston, philadelphia, DC, etc.
Well, my California analogy was self-admittedly very rough and approximate given the considerable
differences in demographics. But I strongly suspect that such considerations provide a hidden
key to some contentious national policies of the last couple of decades, and I've actually written
extensively on the subject:
@Anon I imagine it was far different before the defense wind-downs of the mid 90s. Along with
the many cut-backs a lot of defense was moved out of California by the contractors as punishment
for California's liberal Congressmen. Companies that merged with California based operation usually
consolidated outside California such as when Raytheon swallowed up Hughes Aircraft Companies defense
operations and moved R&D to Massachusetts.
@Liberty Mike I know several white people who would rather live in Botswana than the Ukraine.
They have the advantage of having visited . The rest of your list seems pretty sound with the
possible exception of Swaziland.
P.S. If you deleted Austria and Hungary and replaced them by Albania and Kosovo you might make
your point even stronger.
@Thomm You're non-white and really dumb to boot; you don't understand the ecology of a society.
Even the white proles are better than your people's proles because they don't make functional
civilizations impossible. If it were possible for a tiny minority to drag the lowers upwards you
would be able to haul your lower castes upwards and make your own country work, then the Brahmins
would have done it. They can't because the average abilities, intelligence and disposition of
the masses is too low of quality in those countries to the point where tourists need to be given
explicit warnings about rape and other problems which you will never need when visiting, say,
some English village of completely average English people. The "white trash" you decry is probably
only slightly below your midwit level of intelligence.
Asians do get affirmative action in employment and promotions in the workplace by the way,
just not in education.
@Thomm I seem to remember you telling everybody that Asians DON'T get affirmative action JUST
GOOGLE IT without ever offering proof. Of course it never occurred to you that there could never
be any documented proof of something like that. There isn't even official documented proof that
white males don't get affirmative action. When people claimed and linked to articles indicating
Asians are considered disadvantaged by the government, you claimed those people didn't know what
they were talking about JUST GOOGLE IT.
I think you made it quite obvious who the idiot is.
It's time to force our "Golden Dozen" (Ivies, Stanford, MIT, Amherst and Williams) to admit
100% black until the average black income($43k) equals that of average white income($71k).
@Thomm The worst hate crimes I have personally witnessed were perpetrated by black men. I
have also seen more casual racism against Asians from blacks than from whites. This might be different
in other parts of the country or world.
Outside of the U.S., East Asians are the least likely to want to engage in some kind of anti-white
alliance since all of the West's most embarrassing military defeats have come from East Asians.
We have always relied on guns and not white guilt for racial equality.
@Ronnie In case you haven't noticed, Jews run this country. They dominate the media, academia,
Wall Street, Hollywood, Capitol Hill via the DNC and lobbying firms, Silicon Valley. Per the NYT
80% of Jews are self-proclaimed liberals. They are obsessed with dismantling the WASP World Order
that in their mind has oppressed them for the last 2000 years. The Ivy League is the pipeline
to these 6 sectors that collectively control the country, whoever controls Harvard controls the
country. Jews not only make up majority of the elite college faculty (esp. in the social sciences)
but are disproportionately benefiting from legacy admission and development cases(admission of
the dim witted sons and daughters of the rich and famous like Malia Obama, Jared Kushner, all
of Al Gore's kids).
Asians are the next up. Practically all Asians who've gone to the Ivy League or Stanford have
voiced their support for affirmative action, many are left wing nuts like the Jews. CA house representative
Ted Liu is one such kool-aid drinking Asian libtard, along with the HI judge Derrick Watson and
Baltimore judge Theodore Chuang, both of whom blocked Trump's temp. suspension of Muslim refugees,
both went to Harvard Law. As an Asian I would be more than happy if the Ivy League simply make
themselves off limits to all Asians and turn their schools 100% black. We don't need more Asians
to get indoctrinated in their dumb liberal ideology and go down in history as the group next to
the Jews and the blacks who destroyed America.
@Saxon You're non-white and really dumb to boot; you don't understand the ecology of a society.
Even the white proles are better than your people's proles because they don't make functional
civilizations impossible. If it were possible for a tiny minority to drag the lowers upwards you
would be able to haul your lower castes upwards and make your own country work, then the Brahmins
would have done it. They can't because the average abilities, intelligence and disposition of
the masses is too low of quality in those countries to the point where tourists need to be given
explicit warnings about rape and other problems which you will never need when visiting, say,
some English village of completely average English people. The "white trash" you decry is probably
only slightly below your midwit level of intelligence.
Asians do get affirmative action in employment and promotions in the workplace by the way,
just not in education.
Asians do get affirmative action in employment and promotions in the workplace by the way,
just not in education.
No they don't, as this very article explains. Could you BE more of a retard?
Plus, the fact that Asians get higher SAT scores than whites proves that they don't need it.
There is a left-wing conspiracy to hide Asian success.
Now, regarding an underachieving WN faggot like you :
Remember that white variance is very high. Excellent whites (like me) exist only because genetic
waste master has to be removed from the other end of the process. You and other WNs represent
that genetic waste matter, and that is why white women are doing a heroic duty of cutting you
off (at least the minority of WNs that are straight. Most are gay, as Jack Donovan has explained).
Nature wants the waste matter you comprise of to be expelled.
If you cared about the white race, you would be extremely glad that white women are cutting
you off, as that is necessary to get rid of the pollution that you represent.
Heh heh heh heh . it is so much fun to put a WN faggot in its place.
@MarkinLA No, I talked about 8a even two weeks ago. Good god, you WN really do have negro
IQs.
8a benefits Asians the least, and THE WHOLE THING SHOULD BE ABOLISHED ANYWAY. There should
be no AA, ever.
8a harms Asians as it taints their otherwise pristine claim to having succeeded without AA.
They don't need 8a, most don't qualify for it as they exceed the $250,000 cutoff, and it lets
WN faggots claim that 'all of Asian success is due to AA', which is demonstrably false.
Read this slowly, 10 times, so that even a wigger like you can get it.
Don't let these WN faggots get away with claiming all of Asian success is merely due to affirmative
action. In reality, Asians don't get affirmative action (other than wrongly being included in
the Section 8a code form the 1980s, which ultimately was used by barely 2% of the Asian community).
Remember that among us whites, variance is extremely high. The prettiest woman alongside pretty
of ugly fat feminists (who the WN losers still worship). The smartest men, and then these loserish
WNs with low IQs and no social skills. White variance is very high.
That is why WNs are so frustrated. They can't get other whites to give them the time of day,
and white women are super-committed to shutting out WN loser males from respectable society.
Don't let them claim that Asian success is solely due to affirmative action. Remember, respectable
whites hate these WN faggots.
@Thomm You're not white, though. You're a rentseeker hanging onto someone else's country and
the fact that you write barely literate garbage posts with no substance to them tells all about
your intellect and your "high achievement." You're not high quality. You're mediocre at best and
probably not even that since your writing is so bad.
Do you even do statistics, though? Whites make up about 70% of the national merit scholars
in the US yet aren't in the Ivies at that rate. Harvard for example is maybe only 25% white. Asians
are over-represented compared to their merit and jews way over-represented over any merit. Now
how does that happen without nepotism? The whole system of any racial favoritism should be scrapped
but of course that wouldn't benefit people like you, Thomm.
Whites aren't more innovative and ambitious than Chinese people. You only have to look at the
chinless Unite the Right idiots in Charlottesville to dispel any idea that whites are the superior
race. The
This Thomm character is obviously of East Asian origin. His tedious, repetitive blather about
Asians, white women, and "white nationalist faggots" is a telltale sign. One of his type characteristically
sounds like he would be so much less distressed if those white males were not white nationalist
faggots.
@Tom Welsh An interesting historical argument My reply Land isn't money Arguably the Normans
came back in the form of the Plantagenets to contest the French throne in the 100 Years War. But
by that time France wasn't nearly so feeble
Giving Negroes land in the form of a North American homeland appeals to me (provided whites
get one too) although I know the geography is agonizing Blacks tend not to like this suggestion–they
realize how depedent they are on whites That wasn't true of the Normans–quite self-reliant fellows!
@Thomm I'm not sure what it was that I said that made you think I think all Asian success
is due to AA. In fact I think the opposite is true, that Asians succeed in spite of AA, which
is set up solely to hinder Asians from joining the club, and as far as I'm concern, it's a club
of sell-out globalist libtards that I wouldn't want more Asians to join.
I've worked in tech long enough to know that in tech, no one gives a fudge where you went to
school. I am surrounded by deca-millionaires who went to state schools, many aren't even flagship,
some didn't even study STEM. Some didn't even go to college or graduate. The only people I know
who still care about the Ivy League are 1st generation often FOB China/India trash, and a small
number of Jewish kids looking to benefit from legacy admission, most are gay and/or serious libtards.
You can tell that Jewish achievement has fallen off a cliff as Ron Unz asserted by looking
at a certain popular college website. The longest running thread that's been up there for nearly
a decade with over a thousand pages and over 18,000 posts is called "Colleges for the Jewish "B"
student". The site is crawling with uber liberal Jewish mothers and monitored by a gang of Ivy
graduated SJWs who strictly enforce their "safe space", posters who post anything at all that
might offend anyone (affirmative action is always a sensitive topic) are either thrown in "jail"
i.e. ban from posting for a month, or kicked off altogether. The SJW forum monitors even directly
edit user comments as they see fit, first amendment rights be damned. This is the future of all
online forums if the left have their way, the kind of censorship that Piers Morgan advocates.
Asians are over-represented compared to their merit
False. The main article here alone proves otherwise, plus dozens of other research articles.
You just can't stand that Asian success is due to merit. But you have bigger problems, since
as a WN, you can't even compete with blacks.
What bugs you the most is that successful white people like me never give WN faggots the time
of day. Most tune you idiots out, but I like to remind you that you are waste matter that is being
expunged through the natural evolutionary process.
Yes, more so if they are leftists (including Nationalist-Leftists like WNs are). But the fact
that WNs are disproportionately gay (as Jack Donovan points out) also explains why they tend to
look grotesque, and it supports the scientific rationale that they are wastebaskets designed to
expedite the removal of genetic waste matter.
White variance in talent/looks/intelligence is high. WN loser males and fat, ugly feminists
represent the bottom. In the old days, these two would be married to each other since even the
lowest tiers were paired up. Today, thankfully, both are being weeded out.
@Pachyderm Pachyderma Not just that, but some of these 'white nationalists' are just recent
immigrants from Poland and Ukraine. They are desperate to take credit for Western Civilization
that they did nothing to create. Deep down, they know that during the Cold War, they were not
considered 'white' in America.
400 years? i.e. when most of what is now the lower-48 was controlled by a Spanish-speaking
government? Yeah Many of these WNs have been here only 30-70 years. That is one category (the
domestic WN wiggers are the other)
@Thomm It's too late, everybody knows what I wrote is true and that you are some pathetic
millennial libertarian pajama boy. The sad fact is that you can't even man up and admit that you
wrote that BS about "Asians don't get affirmative action just google it". See that would have
at least have been a sign of maturity, admitting you were wrong.
There is no point reading anything, even once, from a pathetic pajama boy like you.
@MarkinLA I openly said that I am proud to be libertarian. Remember, talented people can hack
in on their own, so they are libertarians.
Untalented losers (like you) want socialism so that you can mooch off of others.
Plus, Asians don't get affirmative action outside of one obscure place (Section 8a) which they
often don't qualify for ($250K asset cutoff), don't need, and was never used by more than 2% of
the Asian-American community. The fact that Asian SAT scores are higher than whites explains
why Asians outperform without AA.
Plus, this very article says that Asians are being held back. A WN faggot like you cannot grasp
that even though you are commenting in the comments of this article. Could you be any dumber?
I realize you are not smart enough to grasp these basic concepts, but that is why we all know
that white trashionalists have negro IQs.
Now begone; you are getting in the way of your betters.
Remember that White variance in brains/looks/talent/character is extremely high. Hence,
whites occupy both extremities of human quality.
Hence, the hierarchy of economic productivity is :
Talented whites (including Jews)
Asians (East and South)
Hispanics
Blacks
Untalented whites (aka these WN wastebaskets, and fat femtwats).
That is why :
1) WNs are never given a platform by respectable whites.
2) Bernie Sanders supporters are lily-white, despite his far-left views.
3) WN is a left-wing ideology, as their economic views are left-wing.
4) WNs are unable to even get any white women, as white women have no reason to pollute themselves
with this waste matter. Mid-tier white women thus prefer nonwhite men over these WNs, which makes
sense based on the hierarchy above.
5) WNs have the IQ of Negros, the poor social skills of an Asian spazoid, etc. They truly combine
the worst of all worlds.
6) This is why white unity is impossible; there is no reason for respectable whites to have anything
to do with white trashionalists.
7) Genetically, the very fact that superb whites even exists necessitates the production of individuals
to act as wastebaskets for removal of genetic waste. WNs are these wastebaskets.
8) The 80s movie 'Twins' was in effect a way to make these wastebaskets feel good, as eventually,
the Arnold Schwarzenegger character bonded with the Danny DeVito character. But these two twins
effectively represent the sharp bimodal distribution of white quality. Successful whites are personified
by the Schwarzenegger character, while WNs by the DeVito character. In reality, these two would
never be on friendly terms, as nature produces waste for a reason.
This pretty much all there is to what White Trashionalists really are.
Elite colleges are a prime example of left wing hypocrisy. The same people who are constantly
calling for an equal society are at the same time perpetuating the most unequal society by clamoring
to send their kids to a few elite schools that will ensure their entry to or retain their ranks
among the elites. Equality for everyone else, elitism for me and my kids. David Brook's nausea
inducing self-hating pablum "How we are ruining America" is a prime example of this hypocrisy.
Another good example of left wing hypocrisy is on "school integration". The same people who
condemn "bad schools" for the urban poor and call for more integration are always the first to
move into the whitest possible neighborhoods as soon as they have kids. They aren't willing to
sacrifice their own kids, they just want other people to sacrifice their children by sending them
to bad schools.
If the left didn't have double standards, they'd have no standards at all.
When I first saw the title of this article, I, being an Asian, was a tad insulted. It smelled
like Dr. Weissberg was attempting to create (or at least escalate) racial strife between Asians
and blacks. I then read through the article and evaluated the bad and the good.
First the bad: Dr. Weissberg's assertion that Asians are being hurt by the Affirmative Action
promotion of blacks is a bit exaggerated. This is because most Asians go into rigorous difficult
programs such as engineering, science, and medicine. Most black affirmative action babies go into
soft programs such as Black Studies (and whatever else the humanities have degenerated into).
Now the good: I think this is the most true portion of the essay.
Better to have the handsomely paid Cornel West pontificating about white racism at Princeton
where he is a full professor than fulminating at some Ghetto street corner. This status driven
divide just reflects human nature. Why would a black Yalie on Wall Street socialize with the bro's
left behind in the Hood? This is the strategy of preventing a large-scale, organized rebellion
by decapitating its potential leadership.
I have once wrote that whites stopped sneering at MLK when Malcolm X and the Black Panthers
began taking center stage. They sure became more accommodating of "moderate" blacks. With all
of the terrorist attacks going on and with blacks converting to Islam, I don't think we're going
to get rid of affirmative action any time soon.
@Vinteuil Stalin alternated between favoritism and intimidation. The truth is he did have
an eye and ear for culture unlike Mao who was a total philistine.
If Stalin really hated artists, he would have killed all of them.
He appreciated them but kept a close eye.
He loved the first IVAN THE TERRIBLE by Eisenstein, but he sensed that the second one was a
criticism of him, and Eisenstein came under great stress.
OK, well, Stalin loved the movies, and may have had an eye for effective cinema. But when it
came to music he was, precisely, a total philistine. On this point, I again recommend Shostakovich's
disputed *Testimony,* a work unique in its combination of hilarity and horror, both of which come
to a head in his account of the competition to write a new national anthem to replace the internationale
– pp. 256-64. A must read.
@DB Cooper For the same reason North Korea is poorer than South Korea, despite being the same
people.
For the same reason the GDR was so much poorer than the FRG, despite the same people.
You probably never even thought about that.
A bad political system takes decades to recover from. Remember that the British also strip-mined
India for 200 years..
Come on, these are novice questions
If you think the success of Asian-Americans in general (and Indian-Americans in particular)
does not jive with your beliefs, then the burden of explaining what that is, is on you.
Indians happen to be the highest-income group in the US. Also very high are Filipinos and Taiwanese.
Racial preferences were ended at California public institutions -- including the elite public
universities Berkley and UCLA -- by ballot initiative. No black violence ensued. There is little
reason to think the black response would be different if the 8 Ivy League universities ended their
policies of racial preferences. Blacks would adjust their expectations. Fear of black rioting
and the desire to jumpstart the creation of a large and peaceful black middle class may have been
important motives for the initial development of racial preference policies in the late 1960s;
they are not major reasons for their retention and continued support from white administrators
today. Other reasons and motives are operative (including what I call R-word dread).
PS: Cornel West has moved from Princeton to Harvard Divinity School.
"Nevertheless, when all added up, the costs would be far lowers than dealing with widespread
1960s style urban violence."
Except back in the '60′s; the White, Euro-derived people were unwilling to fight back. They
felt guilty and half-blamed themselves. Not. Any. More! The costs -- social, mental, emotional,
physical; pick your metric! -- have now exceeded the patience of WAY more Americans than the media
is letting on.
Did you not see 20- and 30-THOUSAND, mostly White Euro-derived, Americans rallying to candidate -- and now President -- Trump's side? (No, the media carefully clipped the videos to hide those
numbers, but there they (we!) were! We're done! We're fed up! "FEEDING" these destructive vermin
to keep them from destroying our houses and families (and nation and country!) is no longer acceptable!
You "don't let Gremlins eat after midnight"? Well, we did -- and now we're in a war against them.
You think this capitulating in education is preventing 'widespread 1960s-style urban violence?
Have you not watched the news? We pretty much already are: ask NYC how many "sliced with a knife"
attacks they have there! In JUST Jan. and Feb., there were well more than 500! (Seriously vicious
attacks with knives and razor blades -- media mentioned it once for a few days, and then shut up.)
Look at the fair in Indianapolis; count up rape statistics; investigate the "knock-out game" ("polar
bear hunting" -- guess who's the polar bear?!). (Oh yeah, and: Ferguson, Baltimore, Chicago; look
at ANY black-filled ruin of a city ) If (when!) we finally have to (CHOOSE to) deal with this
low-grade war -- WHO is better armed, better prepared, SMARTER, and fed up?
"This peace-keeping aspect of affirmative action understood, perhaps we ought to view those
smart Asians unfairly rejected from Ivy League schools as sacrificial lambs."
Wait, wait -- these are White schools, built by White Americans FOR White Americans! "Oh, the
poor Asians are not getting their 'fair share' cause the blacks are getting way more than their
'fair share'?! The Asians' 'fair share' is GO HOME!! The Asians don't have a 'fair share' in White
AMERICAN universities; we LET them come here and study -- and that is a KINDNESS: they don't have
a 'fair share' of OUR country! How about: stop giving preferences to every damned race and nationality
other than the one that BUILT this country and these universities!
@War for Blair Mountain Call them what they are: "paperwork Americans"! Having the paperwork
does NOT make them Americans, and nothing ever will!
Imagine a virgin land with no inhabitants: if you took all the Chinese "Americans" or all the
Pakistani "Americans" or Black "Americans" or Mexican "Americans" (funny, why did you leave those
last two out?! Way more of them than the others ) and moved them there, would they -- COULD they
ever -- create another America? No, they would create another China, or another Pakistan -- or their
own version of the hellholes their forebears (or they themselves) came from. ONLY White, ONLY
Euro-derived Americans could recreate an America.
And this goes, also, to answer the grumbling "Native" Americans who were also NOT native, yes?
Siberia, Bering land bridge, ever heard of those? Do you not even know your own pre-history?!
What "America" was here when it was a sparse population of warring tribes of variously related
Indian groups? What did your forebears make of this continent?
Nothing. There would be no "America" where everyone wants to come and benefit by taking; because
ONLY the White settlers (not immigrants: SETTLERS!) were able to create America! And as all you
non-Americans (AND paperwork "Americans") continue to swamp and change America for your own benefit -- you will be losing the very thing you came here to take (unfair!) advantage of!
At that point, new public money could be channeled into funding people to leave. Blacks
that don't like it in the U.S. would be given X amount of dollars to settle in an African country
of their choice.
Chip 'em and ship 'em! Microchip where they CAN'T 'dig it out' to prevent them from ever ever
ever returning! And ship 'em out! I'd pay a LOT to have this done!
Give the feral negroes what they have been asking for. Pull all law enforcement out of negro
hellholes like Detroit and South Chicago and let nature take its course.
They (we!) tried that years ago. The BLACK COPS SUED because they were working in the shittiest
places with the shittiest, most violent people -- and "the White cops had it easy."
NOT EVEN the blacks want to be with the blacks -- hence them chasing down every last White person,
to inflict their Dis-Verse-City on us!
The larger the immigrant group, the longer it takes to assimilate them.
Alas, typical "paperwork American" lack of understanding! I wrote this to a (White) American
who wants to keep importing everyone ("save the children!") -- and, she insisted, they "could"
assimilate. However, here's what 'assimilate" means:
Suppose you and your family decided to move to, say, Cambodia. You go there intending to "get
your part of the Cambodian dream," you go there to become Cambodian citizens, to assimilate and
join them, not to invade and change them. You want to adopt their ways, to *assimilate.* Yes?
This is how you describe legal immigrants to OUR country (The United States.)
How long would it take for you and your children to be (or even just feel) "assimilated"? How
long would it take for you to see your descendants as "assimilated" -- AS Cambodians? Years? Decades?
Generations? Would you be trying to fit in -- and "become" Cambodians; or would you be trying to
not forget your heritage? ("Heritage"?! Like, Cinco de Mayo, which they don't even celebrate IN
Mexico? Or Kwanza -- a CIA-invented completely fake holiday!)
More important: since it's their country -- how long until THEY see you as "Cambodians" and
not foreigners. I know a man and family who have lived in Italy for over 20 years. To the Italians
in the village where they live, they are still "stranieri": strangers. After this long, to the
local Italians, they're not just "the Americans who moved here" -- they're " our Americans" -- but they are still seen as 100% not Italian, not local: not "assimilated"!
Would you and your children and grandchildren learn to speak, read, and write Cambodian -- and
stop trying to use English for anything much in your new homeland? Would you join their clubs -- would you join their NATIONAL RELIGION!? Does "becoming Cambodian" -- does "assimilating" -- not
actually include (trying to) become Cambodian (and, thus, ceasing to be American)? (If
that were even possible; and it's not.) "Assimilation" is a stupid hope, not a possible reality.
That is where my friend balked. She said: she and her family are very Christian, and no way
at all ever would they drop Christianity and pick up Cambodian Buddhism. So -- how can they EVER
"assimilate" when they (quite rightly) REFUSE to assimilate?!
Please stop buying into the lies the destroyers of OUR nation keep selling. There is no such
thing as "assimilation"; only economic parasitism, jihadi invasion, and benefiting from the systems
set up by OUR forebears for THEIR posterity!
In my origin state of Tamil Nadu, the effective anti-brahmin quota is 100% ( de-jure is just
69% )
Sundar Pichai or Indira Nooyi or Vish Anand ( former Chess champ ) or Ramanujam ( late math
whiz ), cant get a Tamil Nadu State Gov , Math school teacher job
Also, the US gets a biased selection of Indians in terms of caste, class and education
Of Tamil Speakers in USA, about 50% are Tamil Brahmins, vs just 2% in India
The bottom 40% in terms of IQ, such as Muslims, Untouchables and Forest Tribals, are no more
than 10% in the US Indian diaspora
For comparison, Pakistanis and Bangladeshis ( muslim ), perform much much lower
For comparison, Pakistanis and Bangladeshis ( muslim ), perform much much lower
This is interesting, as it puts paid to the obsession that WN idiots have with 'whiteness'.
Pakistan is obviously much more Caucasoid than India and certainly Sri Lanka.
Afghanistan is whiter still. Many in Afghanistan would pass for bona-fide white in the US.
Yet Sri Lanka is richer than India, which is richer than Pakistan, which is richer than Afghanistan.
Either Islam is a negative factor that nullifies everything else including genetics, or something
else is going on.
What there is no doubt of is that Asia has been the largest economic region of the world by
far except for the brief 200-year deviation (1820-2020), as per that map I posted.
@Thomm Weissberg asks, "Why would a black Yalie on Wall Street socialize with the bro's left
behind in the Hood?"
Why focus on the LEFT buttock? His point would be as relevant were he to ask, "Why would a
black Yalie on Wall Street socialize with the bro's RIGHT behind in the Hood?" Either way, I smell
kinkyness deep within Weissberg's question.
"Divide and Rule" said the Romans. Incorporate the potential leaders of those you intend to
rule into your hereditary upper class, and the vast majority will stay inert at the least. And
many will actively support you. See this post by a black woman:
Black Americans: The Organized Left's Expendable Shock Troops .
People like Cornel West are not only NOT rabble-rousing in the 'hood, they're telling blacks
to support the people who actively keep them poor. "Affirmative Action" is designed to sabotage
its alleged goals. Almost all who 'benefit' from it end up among people whose performance is clearly
superior to their own, thus fostering feelings of inferiority, subtly communicating that it doesn't
matter what the 'beneficiary' of AA does, they'll always fail. This is no accident.
Without AA, there might still be separation, (consider "ultra-orthodox" Jews), but the separate
groups would have to be treated with some respect. Really, viewed amorally, it's a marvelous system
for oppressing whites and minorities.
@Thomm Islam is a negative factor, and the higher IQ castes did not convert to Islam
I have data from California National Merit list, IQ-140 bar
Among Indian Punjabis ;
Jat Sikh peasants = 3 winners ( 75% of Punjabis in USA )
Khatri merchants = 18 winners ( 25% of Punjabis in USA )
Both are extremely caucasoid, both appear heavily among Indian bollywood stars ; genetically
very similar, just the evolutionary effect of caste selection for merchant niche vs peasant niche
@Russ NieliRacial preferences were ended at California public institutions -- including
the elite public universities Berkley and UCLA -- by ballot initiative.
But the admissions people immediately started using other dodges like "holistic" admissions
policies where they try and figure out if your are a minority from other inferences such as your
essay where you indicate "how you have overcome". They also wanted to get rid of the SAT or institute
a top X% at each school policy.
@rec1man I don't know . a lot of the richest Indians in the US are Gujratis who own motels
and gas stations. Patels and such..
They were not of some 'high caste' in India; far from it.
Plus, a Tamil who is of 'high caste' is not Caucasoid in the least. Caste does not seem to
correlate to economic talent, since business people are the #3 caste out of 4. The richest people
in India today are not 'Brahmins'..
Islam is a negative factor, and the higher IQ castes did not convert to Islam
I disagree. Pakistan is 99% Islam, so all castes converted to Islam and/or many of the lighter-skined
Pakistanis are Persians and Turks who migrated there..
Afghanistan's religion prior to Islam was Buddhism, not Hinduism
@Thomm I don't know.... a lot of the richest Indians in the US are Gujratis who own motels
and gas stations. Patels and such..
They were not of some 'high caste' in India; far from it.
Plus, a Tamil who is of 'high caste' is not Caucasoid in the least. Caste does not seem to
correlate to economic talent, since business people are the #3 caste out of 4. The richest people
in India today are not 'Brahmins'..
Islam is a negative factor, and the higher IQ castes did not convert to Islam
I disagree. Pakistan is 99% Islam, so all castes converted to Islam and/or many of the lighter-skined
Pakistanis are Persians and Turks who migrated there..
Afghanistan's religion prior to Islam was Buddhism, not Hinduism... Afghanistan was 33% Hindu,
66% buddhist before islam, but in actual practise lots of overlap between Hinduism and Buddhism,
and many families had mixed Indic religions
Pakistan was 22% non-muslim in 1947, these 22% were higher caste Hindus and Sikhs – all got
driven out in 1947 ; Pakistan is low IQ islamic sludge residue of Punjabi society
I am Tamil speaking, 80% of Tamil brahmins ( 2% ) can be visually distinguished from the 98%
Tamil Dravidians ;
Thomm you take up too much oxygen in the room insisting on the importance your opinions, the
whole conversation is much more interesting when i skip past your stupid WN focused city boy sheltered
viewpoint. Big words and that retarded hehehe thing you do would get you wrastled to the ground
and your face rubbed in the dirt
@Thomm Why would 'idiot WNs' be happy about the fact that blacks successfully chased asians
out of the country, though? That would be a sign that they are gaining a scary degree of power,
would it not? Moreover how are white males who want to escape SJW idiocy going to like a country
that still actively enforces all sorts of thought control policies of its own? You wannabe libertardian
analysts always say silly things like this and it just sounds dumber every time.
Why would 'idiot WNs' be happy about the fact that blacks successfully chased asians out
of the country, though? That would be a sign that they are gaining a scary degree of power,
would it not?
It would be, but WN retards don't think that far.
You wannabe libertardian analysts always say silly things like this and it just sounds dumber
every time.
This is what WNs want, not want I want. It is easy to predict WN opinions.
Plus, being a libertarian is much more desirable than being a WN socialist. Talented people
thrive in a libertarian society. WN losers just want to mooch off of successful whites.
"Better to have the handsomely paid Cornel West pontificating about white racism at Princeton
where he is a full professor than fulminating at some Ghetto street corner."
Really? All that does is give the man a bigger sanctioned soap box. In the ghetto he might
affect a couple of hundred people. Siting in academia he gets a lever than can affect tens of
thousands. Not a good trade.
Truth is often stranger than fictions. The real reason for discriminating against Asian Ams
is not to help make the other minority happy. It is to benefit the whites. The Ivy League schools
are using the diversity to give the white applicants an advantage of 140 pst in SAT points. Please
see below:
In Table 3.5 on p 92 of Princeton Prof. Espenshade's famous book, "No Longer Separate, Not
Yet Equal", the following shocking fact was revealed:
Table 3.5 (emphasis added)
Race Admission Preferences at Public & Private Institutions
Measured in ACT & SAT Points, Fall 1997
!!!!!!!!!!!!!!!!!-
Public Institutions Private Institutions
ACT-Point Equivalents SAT-Point Equivalents
Item (out of 36) (out of 1600)
!!!!!!!!!!!!!!!!!!!!!!-
Race
(White) -- –
Black 3.8 310
Hispanics 0.3 130
Asian -3.4 -140
Why are 140 SAT pts. taken away from AsAm applicants? To give the white applicants an advantage
of 140 SAT pts. over the historically disadvantaged AsAms by using the nobility of diversity as
a cover? This is the reverse of affirmative action. This is a gross abuse of affirmation action.
This is outrageous discrimination. If
the purpose is to give the blacks an advantages, why not add more SAT points to blacks and hispanics?
@Avalanche That's an interesting point you brought up, whether anyone can ever really be "assimilated".
Even after hundreds of years, blacks and Jews in this country remain very distinct groups. I think
for blacks the reason is skin color and culture, while for Jews it is the religion. Both groups
have had low out marriage rate until maybe the last couple of decades.
Assimilation is most successful when there's a high intermarriage rate, but intermarriage rate
and immigration rate tend to go in opposite directions. The higher the immigration rate, the lower
the intermarriage rate.
Hispanics and Asians have been in this country since the 1800s yet you rarely ever meet a hispanic
or Asian person who's been here for more than 3 or 4 generations. Why is that? I think it's because
many of these earlier groups, due to their small number at the time relative to the population,
had intermarried, blended in and disappeared. I would say these earlier immigrants have fully
assimilated. The ones who are unassimilated are the new arrivals, those who arrived in large numbers
since 2000.
But for some peculiar reason blacks who are mixed with whites often continue to identify as
blacks. We see this in Obama, Halle Barry, Vanessa Williams and many other black/white mixes.
Black identity is so strong even Indian-black mixed race people call themselves black, like Kamala
Harris.
My theory is that most white-hispanic and white-asian marriages are white males with hispanic/asian
females. In most cases the white males who married hispanic/asian women are conservatives who
prefer women in cultures that are perceived to be more traditional compared to white females who
are often selfish and want a divorce at the first sign of personal unhappiness. Many of them then
raise their children in full white traditions including as Christians and encourage them to identify
themselves as whites.
OTOH, many white-black mix marriages are white female with black male, in many instances these
women marry black men because they are liberal nuts who want to raise black children. Jewish women
for instance marry black men at a high rate. Many of these women then raise their children as
black or biracial children and encourage their children to identify themselves as black.
Education used to be the biggest tool for assimilation, but these days thanks to libtards running
amok, our schools are where racial identity is amplified rather than de-emphasized. Now all minority
groups are encouraged to take pride in their own cultural identity and eschew mainstream (white)
culture. Lured by affirmative action, more and more mixed race hispanic kids are beginning to
identify themselves as latino. Thankfully mixed race Asian kids are running in the opposite direction
and now mostly identify themselves as white so they are not disadvantaged by AA.
I think assimilation can occur when you have low immigration rate coupled with high intermarriage
rate and a smart education system that discourages racial and individual identity and focuses
on a single national identity. The biggest reason assimilation is failing now is a combination
of high immigration rate, and a failed education system that promotes identity politics and victimhood
narrative. The internet and easy air travels back to the homeland also make it much harder to
assimilate newcomers. For these reasons I'm in favor of a moratorium on immigration for the next
20 years. All those not yet citizens should be encouraged to return to their home countries. No
more green cards, work visas or even student visas should be issued.
@S. B. Woo That's the argument of mindless Asian SJWs who've been fed the libtard kool-aid.
Just look at the numbers you yourself provided. Whites who were turned down still vastly outperformed
blacks and hispanics who were given admission, to the tune of 340 points and 130 points respectively.
Libtards who came up with AA want everyone to turn against whites, and mindless Asian SJWs like
you are parroting them without thinking things through.
OTOH, many white-black mix marriages are white female with black male, in many instances
these women marry black men because they are liberal nuts who want to raise black children.
Jewish women for instance marry black men at a high rate. Many of these women then raise their
children as black or biracial children and encourage their children to identify themselves
as black.
@Incontrovertible That's the argument of mindless Asian SJWs who've been fed the libtard kool-aid.
Just look at the numbers you yourself provided. Whites who were turned down still vastly outperformed
blacks and hispanics who were given admission, to the tune of 340 points and 130 points respectively.
Libtards who came up with AA want everyone to turn against whites, and mindless Asian SJWs like
you are parroting them without thinking things through.
So much for "smart Asians". But they still needed a lower score for admittance than Asians
Ethnic nationalism rises when the state and the nation experience economic difficulties. Weimar
republic is a classic example here.
Notable quotes:
"... That's exactly nationalism, for sure. The work of that wealth creation by the way is done by the all the classes below the rentier class, from working to middle class. The funneling upwards thing is actually theft. ..."
"... The middle class is shrinking and being pushed down closer to rage because the wealth-stealing mechanisms have become bigger and better, and saturated the entire national system, including its electoral politics. This real face of capitalism has driven out the iconic American Dream, which was the essence of upward mobility. ..."
"... Nationalism is an ugly word, but it's easily reached for when there aren't any better words around. In Russia, they already went through what faces the US, and they figured it out. ..."
"... "In our view, faster growth is necessary but not sufficient to restore higher intergenerational income mobility," they wrote. "Evidence suggests that, to increase income mobility, policymakers should focus on raising middle-class and lower-income household incomes." ..."
"... Advocating smoothed-out relations with Russia (for commercial perso reasons, Tillerson, etc. and a need to grade adversaries and accept some into the fold, like Russia, instead of Iran ), a more level playing field, multi-polar world, to actually become more dominant in trade (China etc.) and waste less treasure on supporting enemies, aka proxy stooges, to no purpose (e.g. Muslim brotherhood, Al Q kooks, ISIS) and possibly even Israel -- hmmm. ..."
"... The old guard will do much to get rid of the upstart and his backers (who they are exactly I'd quite like to know?) as all their positions and revenues are at risk ..."
"... The Trump crowd seems at the same time both vulnerable and determined and thus navigating à vue as the F say, by sight and without a plan An underground internal war which is stalemated, leading to instrumentalising the ppl and creating chaos, scandals, etc. ..."
The US has no problem generating wealth, and has no need to force conflict with China. The
US's problem is that that wealth is funneled upwards. Wealth inequality is not a meme. "Shrinking
middle class" is a euphemism for downward-mobility of the middle class, an historical incubator
for Reaction. And that's what we have here, reactionaries from a middle class background who now
are earning less than their parents at menial jobs, or who are unemployed, becoming goons; aping
the klan, appropriating nazi icons, blaming the foreigner, the negro, the Jew, the Muslim, for
their circumstances. A "trade war" will not help them one iota, it will make their lives worse,
and Bannon will go out and say it's the fault of the foreigner and the immigrant, their numbers
wool swell. More terror, depper culture wars. I suppose that's nationalism to some people.
That's exactly nationalism, for sure. The work of that wealth creation by the way is done
by the all the classes below the rentier class, from working to middle class. The funneling
upwards thing is actually theft.
The middle class is shrinking and being pushed down closer to rage because the wealth-stealing
mechanisms have become bigger and better, and saturated the entire national system, including
its electoral politics. This real face of capitalism has driven out the iconic American Dream,
which was the essence of upward mobility.
Nationalism is an ugly word, but it's easily reached for when there aren't any better words
around. In Russia, they already went through what faces the US, and they figured it out.
Since we're looking for the grown-ups, let's turn to Vladimir Putin, always reliable for sanity
when direction is lost.
Putin recalled the words of outstanding Soviet Russian scholar Dmitry Likhachev that patriotism
drastically differs from nationalism. "Nationalism is hatred of other peoples, while patriotism
is love for your motherland," Putin cited his words.
"In our view, faster growth is necessary but not sufficient to restore higher intergenerational
income mobility," they wrote. "Evidence suggests that, to increase income mobility, policymakers
should focus on raising middle-class and lower-income household incomes."
Interventions worth considering include universal preschool and greater access to public
universities, increasing the minimum wage, and offering vouchers to help families with kids
move from poor neighborhoods into areas with better schools and more resources, they said.
Is there any political party or group in the US that suggests this?
The Corporate "fascist" - with grains of salt - USA. The 'democracy' part is fiction, camouflaged
via a fools theatre two-party system and ginormous social re-distribution, amongst others..
the Core (PTB) found itself through miscalculation and loss of power subject to a challenger
who broke thru the \organised/ fake elections, to attempt some kind of re-adjustement - renewal
- re-set - review...
Advocating smoothed-out relations with Russia (for commercial perso reasons, Tillerson,
etc. and a need to grade adversaries and accept some into the fold, like Russia, instead of Iran
), a more level playing field, multi-polar world, to actually become more dominant in trade (China
etc.) and waste less treasure on supporting enemies, aka proxy stooges, to no purpose (e.g. Muslim
brotherhood, Al Q kooks, ISIS) and possibly even Israel -- hmmm.
Heh, the profits of domination are to be organised, extracted and distributed, differently.
One Mafia-type tribe taking over from another! Ivanka will be The Sweet First Woman Prezzie! Style,
Heart, Love, Looks! Go!
The old guard will do much to get rid of the upstart and his backers (who they are exactly
I'd quite like to know?) as all their positions and revenues are at risk, so they are activating
all - anything to attack. The Trump crowd seems at the same time both vulnerable and determined
and thus navigating à vue as the F say, by sight and without a plan An underground internal
war which is stalemated, leading to instrumentalising the ppl and creating chaos, scandals, etc.
"... John Gatto has traced the roots of western education back to the Hindu schools in India; teaching docility and obedience. His book, The Underground History of American Education, is superb. ..."
Only two continents for this one; and yes, critical thinking either not taught or
discouraged.
I have found Usaian's particularly lacking in this skill; especially the last 50+ years.
John Gatto has traced the roots of western education back to the Hindu schools in India;
teaching docility and obedience. His book, The Underground History of American Education, is
superb.
Posted by: V. Arnold | Aug 5, 2017 4:28:14 AM |
53
"... By Carol Graham, Leo Pasvolsky Senior at the Brookings Institution and College Park Professor in the School of Public Policy at the University of Maryland. Originally published at VoxEU ..."
"... Despite the long-held belief that high levels of inequality in the US signal future opportunity, a number of studies suggest that this is no longer the reality. This column examines trends in inequality from the perspective of well-being and focuses on non-economic aspects of welfare, including hope. The results reveal stark differences across people, races, and places in the US. Poor minorities – and blacks in particular – are much more hopeful than poor whites, while urban places are more hopeful than are rural ones, as are places with higher levels of diversity. ..."
"... See original post for references ..."
"... Education, incentives, tools, new jobs. ..."
"... I'm close to disgusted by this analysis. It shows either a complete lack of insight into root causes, or a stubborn unwillingness to speak about them. No mention of globalisation, capitalism, financial crises, housing foreclosures, predatory corporations, or corruption of law and justice. Blather about different language used in the two Americas may score points at a sociolinguistics conference, but is otherwise unilluminating. All the framing in terms of people's "willingness to invest in the future" is bogus – it should be about "ability to create futures for themselves". Only the rich have the luxury of investing, for everyone else it's the struggle to stay afloat and perhaps improve their circumstances. ..."
"... Welcome to fear .It's hope, turned inside out ..."
By Carol Graham, Leo Pasvolsky Senior at the Brookings Institution and College Park
Professor in the School of Public Policy at the University of Maryland. Originally published at
VoxEU
Despite the long-held belief that high levels of inequality in the US signal future
opportunity, a number of studies suggest that this is no longer the reality. This column
examines trends in inequality from the perspective of well-being and focuses on non-economic
aspects of welfare, including hope. The results reveal stark differences across people, races,
and places in the US. Poor minorities – and blacks in particular – are much more
hopeful than poor whites, while urban places are more hopeful than are rural ones, as are
places with higher levels of diversity.
The US is as divided as it has ever been. The simplest marker – which has been a topic
of discussion among economists for many years – is the stark increase in inequality of
both income and opportunity. A number of studies provide compelling evidence that despite the
long-held belief that high levels of inequality in the US signal future opportunity, that is no
longer the reality. Chetty et. al. (2017) find that the percentage of children who are able to
rise above the income levels of their parents has fallen from 90% for cohorts born in 1940 to
50% for those born in 1980. Yet technical discussions among economists based on metrics such as
Gini coefficients do not seem to resonate in public debates.
Divisions in the US go well beyond the income arena, and in ways that are particularly
worrisome. In a new book, I document trends in inequality from the perspective of well-being,
starting with standard metrics but also exploring how these relate to non-economic aspects of
welfare, such as happiness, stress, anger, and, most importantly, hope (Graham 2017).
Hope is an important channel driving people's willingness to invest in the future. My early
research on well-being work highlights its particular importance for people with less means,
for whom making such investments requires a greater sacrifice of current consumption than it
does for the rich (Graham et al. 2004). In addition to widening gaps in opportunity, the
prosperity gap in the US has led to rising inequality in beliefs, hopes, and aspirations, with
those who are left behind economically the least hopeful and the least likely to invest in
their futures.
A Tale of Two Americas
There are, indeed, two Americas. Those at the top of the income distribution (including the
top of the middle class) increasingly lead separate lives, with barriers to reaching the upper
class being very real, if not explicit (Reeves 2017). Those at the top have high levels of hope
for the future and make investments in themselves and in their children's health, education,
and knowledge more generally. Those at the bottom have much lower levels of hope and they tend
to live day by day, consumed with daily struggles, high levels of stress, and poor health.
There are many markers of the differences across these two Americas, ranging from education
levels and job quality to marriage and incarceration rates to life expectancy. Indeed, the
starkest evidence of this lack of faith in the future is the marked increase in premature
deaths – driven largely but not only by an increase in preventable deaths (such as via
suicide and drug over-dose) among middle-aged uneducated whites, as described by Case and
Deaton (2017).
There are even differences in the words that these two Americas use. Common words in wealthy
America reflect investments in health, knowledge acquisition, and the future: iPads and Baby
Bjorns, foam rollers and baby joggers, cameras, and exotic travel destinations such as Machu
Picchu. The words that are common in poor America – such as hell, stress, diabetes, guns,
video games, and fad diets – reflect short-time horizons, struggles, and lack of hope
(Leonhardt 2015).
Based on detailed Gallup data, we find stark differences across people, races, and places in
the US. Remarkably, poor minorities – and blacks in particular – are much more
hopeful than poor whites. Poor blacks are three times as likely to be a point higher on the
ten-point optimism scale than are poor whites, while Hispanics are about one and a half times
more likely than poor whites. Poor blacks are also half as likely to experience stress –
a significant marker of ill-being – on a daily basis as are poor whites, while poor
Hispanics are about two-thirds as likely.
Figure 1 Odds of being on a higher level of optimism, by race group (relative to white),
within each income group
Figure 2 Odds of experiencing stress, by race group (relative to white), within each income
group
These differences across race have multiple explanations. One important one is that, despite
substantial obstacles, minorities have been gradually narrowing the gaps with whites, at least
in terms of education and life expectancy gaps. Minorities are also more likely to compare
themselves with parents who were worse off than they are, while blue-collar whites are more
likely to compare themselves with parents who were better off – a trend that has been
increasing over the past decade, as found by Cherlin (2016). By 2016, 26% of non-Hispanic
whites reported being worse off than their parents, compared to only 16% and 14% of blacks and
Hispanics, respectively. Cherlin also finds that those individuals who report being worse off
than their parents are less happy with their lives and less likely to trust others.
Psychological research points to higher levels of resilience among minorities compared to
whites. Assari et al. (2016) find that blacks and Hispanics are much less likely to report
depression and/or commit suicide in the face of negative shocks than are whites. Our research
suggests that there may be an ageing effect. While younger blacks, particularly males, are more
likely to be angry than their white counterparts (even though they are still more hopeful),
older blacks are significantly less likely to be angry than whites.
More generally, urban places are more hopeful than are rural ones, as are places with higher
levels of diversity. In recent research, Sergio Pinto and I find that the same places have
healthier behaviours – such as more people who exercise and less who smoke (Graham and
Pinto 2017). In contrast, we also find that the places with more respondents who lack hope for
the future tend to have higher levels of premature mortality driven by 'deaths of despair',
i.e. those driven by suicide and/or drug and alcohol addiction.
These differences are reflected across a range of inter-related trends, which again are more
prevalent among uneducated whites. Reported pain, which is a gateway to both opioid addiction
and suicide, is higher among whites than among blacks, and highest among rural whites. Reliance
on disability insurance links to reported pain due to the injuries associated with many
blue-collar jobs. Rates have increased in the past decades from just under 3% of the working
age population to almost 5% for men. Premature mortality has increased dramatically for
uneducated whites – particularly those in rural areas and small towns – compared to
their black and Hispanic counterparts. A recent study finds that civic participation of all
kinds is also much lower in rural areas, areas that also tend to have far less access to
broadband internet (Kawashi-Ginsberg and Sullivan 2017). These rural–urban trends map
remarkably closely, meanwhile, with political divisions, voting patterns, and even alternative
sources of news in the US.
The figures below depict rough geographic regularities – via state averages – in
the distribution of stress, reported pain, reliance on disability insurance, and premature
mortality for poor white respondents (the cohort that is demonstrating the starkest signs of
despair). Our econometric analysis discussed above identifies the specific role that lack of
hope plays in this vicious circle.
Figure 3 Average stress incidence (%) by state, for poor whites (2015-15 average)
Figure 4 Average pain incidence (%) by state, for poor whites (2015-15 average)
Figure 5 DI prevalence by state (% per adults aged 20+, 2010−15 average)
Figure 6 Mortality rate (all-cause) by state, for whites aged 45−54 years old (per
100,000 people, 2010−2015 average
What Can Be Done to Reduce Despair?
Unfortunately, there is no magic bullet for solving widespread desperation and its negative
manifestations. It is even more difficult to conceive of solutions in a political cycle that
hinges on daily crises and scandals. Not surprisingly, the proposals coming out of the current
administration are simply to make across-the-board cuts in social programmes – far from
the creative thinking required to make these programmes part of the solution. In the short run,
solutions will likely be piecemeal and bottom-up, emanating from communities themselves with
support from local level political actors and organisations.
There are, of course, major policy changes that could help over the longer run. Firstly,
while deaths of despair are exactly as described, the all too readily available supply of
opioids and other addictive drugs is an issue that policy can productively address. Another key
policy area, which I highlight in the book, is the need to re-think safety net policies in the
US. Food stamps, for example, tend to stigmatise recipients, and the programmes that provide
cash assistance for the non-working poor have been shrinking, particularly in Republican
states. Given that 15% of prime-age males are out of the labour force – and this is
projected to grow to 25% by mid-century – another approach is clearly necessary.
The technological displacement of low-skilled jobs is here to stay – and is an
important issue for many countries, well beyond the US. Addressing this issue will require
longer-term changes, such as education and incentives that provide the young in economic
desserts the tools to move to where the new jobs are. Older displaced/out-of-the-labour-force
workers pose more of a challenge. Well-being research offers some lessons, such as the benefits
of volunteering, participating in community activities, and other ways of avoiding the
isolation and despair that accompanies unemployment.
Finally, restoring hope is not impossible, and as a start entails reaching out to those in
distress with positive strategies for the future. Experimental research, such as that by Hall
and Shafir (2014) and Haushofer and Fehr (2014), shows that simple interventions that introduce
a source of hope to the poor and vulnerable can alter behaviour and lead to better future
outcomes. The alternative is for desperation to yield even more support for politicians
fostering division, exclusion, and an impossible return to the past. The associated turmoil, as
recent elections and events in both the US and the UK demonstrate, is counter-productive for
all, and particularly so for the most vulnerable.
The technological displacement of low-skilled jobs is here to stay – and is an
important issue for many countries, well beyond the US. Addressing this issue will require
longer-term changes, such as education and incentives that provide the young in economic
desserts the tools to move to where the new jobs are.
Education, incentives, tools, new jobs.
That could be cut and pasted from a DNC press release. Coding camps for all!
It seems that even the Even the Liberal Brookings still doesn't get how bad things
are,
or how much fundamental restructuring of the economy and society would be needed
to reverse things.
The answers are never things like reforming labor law to make it easier to unionize,
renegotiating trade agreements to make them fairer to workers, fixing the trade deficit, true
universal health care and perhaps the most obvious answer: have the government hire people
directly!
No, it is always learn to code and move to New York or San Francisco. It is getting harder
and harder to deny that Thomas Frank was right when he said that modern liberalism is now
centered on upper middle-class professionals and their theory of technocratic
meritocracy.
These people can't imagine any solutions that don't comport with their own experiences.
The credentialed professionals earned their wealth and status through schooling and moving
to one of the large metro areas where professional jobs are plentiful. They assume that
everyone must follow the same path that they did because they are convinced that they have
merit and others do not. They can't imagine that in some cases staying in your dying town
where you at least have family networks might be a more rational option than dropping
everything for a chance to "make it" in an alien city with a high cost of living. Why do the
"go where the jobs are" narratives always seem to ignore the fact that large cities are
becoming so expensive that the lower-paid workers who service the "knowledge workers" at
Google and Facebook can't even afford to live there anymore? I guess the reason is that it
would reveal the social hourglass nature of the supposedly wonderful liberal big cities.
Also, I want to call attention to the obsessive focus on men not working. Dean Baker has
critiqued this meme on his blog.
Americans don't need hope they need good policy. Too much contemporary political and
economic analysis focuses on psychological factors. Yes, the misery and hopelessness that
comes from unemployment and underemployment are real and likely fuel various social
pathologies but there is nothing new or groundbreaking here.
We know from the Great Depression and the aftermath of the collapse of communism in
Eastern Europe that economic problems can cause social problems. The key is to find ways to
fix these problems but unfortunately the only answers we seem to get are the same ones that
we have been hearing for the last 30 years.
I'd suggest that real hope, as opposed to false hope, is the answer. Real hope would
result from good policies, false hope is engendered by suggesting that people do things such
as learning to code (unless they have an aptitude for it). Even then, telling people that
uprooting oneself and moving to a strange city to learn a new skill is hardly a realistic
solution. One would need to rebuild one's life (and that of one's family), and still may not
find a job at the end of that effort. These types of solutions increase despair, they don't
kindle hope.
What really need to happen is a big infrastructure project aimed at getting high-speed
Internet connections and decent roads to the rural areas. These would make it possible for
businesses to relocate satellite offices to low-cost areas, bringing jobs. People could then
either train for those jobs, or get jobs in support sectors such as supermarkets, consumer
stores, etc. This would offer a realistic possibility of better times, which would help
people regain real hope.
I'm going to have to pile on here as well, flagging
volunteerism
as an elite
perspective that works (possibly) only when all your needs are met and you need something to
get you out of the house to connect with people, while telling a poor person they should work
for free might not answer any need they have and indeed likely make them feel taken advantage
of. Along the same lines a poor artist friend has fielded the suggestion that she donate her
artwork to charity for exposure, as the spouse of a wealthy so californian has done, then her
work can be sold to support the charity instead of herself, but exposure! (We'll leave aside
that the techies just want to take a picture with their iphone 7 and they'll print it out for
free)
while being around people is often good advice, being around people does not fix the
despair of unemployment (really a separate issue than poverty – as one can be poor and
employed, unemployed and not poor although that situation clearly can not last).
The despair of unemployment is fear of NOT HAVING AN INCOME period (the present reality
and the fear that one won't get a job in the future either), and being around others does not
fix that, whether or not one is around fellow unemployed people or people with jobs. Because
you can get company from others but no relief from the raw fear about whether one will have
an income to pay bills or not, because others can not help one with this. They can merely
provide company and emotional support, but that doesn't pay the bills.
Sure if for the older people social security age was lowered so they could now collect a
check and then one told them to volunteer with thier free time, maybe they'd be good, but
only if that need for an income is met first.
Volunteerism also has the stigma that a volunteer is of a lower class because they are
working for free.
I remember my late mother who was volunteering in her 80's at a charity. This charity also had paid employees. She had volunteered for a few months when one of the paid staffers asked her to get coffee
for the staffer.
My mother got the coffee for her. Then my mother quit.. She said the the paid workers did not respect the volunteers' time because the volunteers
were willing to work for free..
adding: I know of a local worthy charity that got ripped off for 10's of thousands of
dollars by a paid worker. No one checked the books because, of course, the paid worker must
have been reliable and serious and trust worthy. They were being paid! after all. The IRS
showing up on the doorstep because of failure to report and pay taxes finally got the
attention of the self-regarding and swanning board that all was not well. Several unpaid
volunteers had tried to get the board's attention for a couple of years, to no avail.
Alas, Washington keeps its head in the sand by relying on unrealistic measures of the cost
of living. They do a poor job of correcting for regional differences. As an example, as Dean
Baker and others have pointed out, rents for a 1-bedroom apartment in San Francisco exceed
mortgage payments on a mansion in Omaha.
As long as Capitol Hill is content to go with the flow, the flow will continue
downhill.
I'm close to disgusted by this analysis. It shows either a complete lack of insight into
root causes, or a stubborn unwillingness to speak about them. No mention of globalisation,
capitalism, financial crises, housing foreclosures, predatory corporations, or corruption of
law and justice. Blather about different language used in the two Americas may score points
at a sociolinguistics conference, but is otherwise unilluminating. All the framing in terms
of people's "willingness to invest in the future" is bogus – it should be about
"ability to create futures for themselves". Only the rich have the luxury of investing, for
everyone else it's the struggle to stay afloat and perhaps improve their circumstances.
It's big on "something needs to change" and "another approach is needed", but offers no
new ideas. It seems entirely focused on mitigating the symptoms, such as despair and suicide,
rather than identifying and addressing the causes. And it doesn't once question the idea that
America is a rich land, as the title would have it, as opposed to a land where the many are
ruthlessly and increasingly exploited by the few, a land where public assets are falling
apart or being stolen for a song (post offices, anyone?). And the author seems surprised that
communities that have long been oppressed and deprived are more resilient than those that
have had recent opportunities to forget the lessons of the struggle to survive and
prosper.
In the end it reads as just another tacky book promotion exercise with nothing more to
offer.
Agreed. Former colleague get all enthused about interventions that are supposed to help
the poor to refocus on long-term outcomes (so as to reduce smoking/opioid use/whatever) /
invest in the future, blah blah blah. As you say, the despair/lack of hope people have has to
be addressed by concrete changes to the system that gives them either a secure job they
value, (as well as both decent monetary compensation and other non-monetary support –
carers immediately come to mind) or engages them in an activity that gives value to their
lives, and ideally society too, if they're too ill to go back into full-time employment.
"Concerns about the future" constitute around 20% of quality of life directly (and indirectly
have huge effects in terms of magnifying the malign effects of financial/monetary shocks to a
person's life).
"
Welcome to fear .It's hope, turned inside out
." – Going Postal by Terry
Pratchett
Ah yes. They're poor because they are stupid. I am always surprised we don't explain the
rich as "they're rich because they are ruthless and unprincipled".
Blunt people do say that, and so should all. Balzac said much the same 200 years ago, and
christ said something to that effect about 2000 years ago.
To be fair, "they're rich because they are ruthless and unprincipled, or were born rich, or
both".
The system has always been rigged, maybe it's worse now than 50 years ago, maybe it's
better than 100 years ago. Regardless, what changed is a business of talk radio, fox news and
grievance politics that profits off of gloom and doom and specifically targets white people
and rural folk. If you spend your days listening to people tell you how awful everything is,
you are going to lose hope.
It isn't
hope
that is lacking; I've yet to meet anyone who doesn't hope for a
better life. What has been lost is the belief that that hope will ever be realized. People no
longer believe the life they would like is achievable. When there is nothing to look forward
to, nothing to strive for, hope sinks and despair rises. That's why safety nets are so
important, they prevent hope from being extinguished and remind people there is a way
forward, a way up.
Ironically, the optimism shown by minorities may be an illusion; the result of closing the
gap with a sinking white working class rather than of a real rise in their economic
state. The life they hope to achieve by catching up with the white working class is no longer
the life they were told they would find.
It (the loss of hope) gets to a lot of us -- in different ways. I'm loathed to agree with
Yves' assessment that the loss of hope is a -- what's the right word? -- necessity?
But I think Yves is right.
Misplaced
hope is a seductive toxin. It keeps one from
making a realistic assessment of a situation and the most likely range of outcomes when
analysed objectively. If you keep, irrationally, hoping for the best, you may well preclude
yourself from taking more drastic but necessary steps.
The main way the lack of hope has affected me is that I cannot now happily read anything
in modern literary fiction. Once I started noticing a phenomena -- which is a variation on TV
houses having unreasonably large rooms or characters having a standard of living not
commensurate with their jobs -- whereby the narrative of a novel is established usually in the
first chapter or so, but the author has to conjure up some outrageously contrived explanation
and scenarios as to how the central characters have the time and resources to participate in
whatever story arc they are about to be launched upon.
Is the novel some sort of adventure? The lead characters have to be given a get-out for
why they aren't tied to a job which occupies every waking hour either by working long hours
or commuting (or both). Is it an urban fantasy genre? Where do the participants get their
money from? If they work, what do they do which gives them the energy to pursue the plot
line?
If you try to read modern fiction, watch for the sudden, hamfisted, attempts to finesse
these issues. I've got cynical and jaundiced at the endless parade of antiques shop owners
who can conveniently close up early when a story development needs to take place. The
freelance detectives/office workers/journalists who can find themselves mysteriously between
assignments but not need to look for work. The poor but honest Peggy Sues who inherit a bit
of money from the convenient death of a relative.
Whenever I try to start a new modern fiction book, I brace myself for the inevitable
credulity-stretching few paragraphs which have to get clumsily spliced in to achieve an
explanatory fudge. I've given up hope (!) of finding one that doesn't have me throwing it in
the trash.
Thanks Chauncey -- I've wasted so much time (and money!) trying to find something decent to
read. The TV is now so annoying, to the point of unwatchability, I've given up apart from a
couple of shows. BBC Radio 4 is down to a similarly small handful of programming that I
actually enjoy. And I love to read, I don't like not having a book on the go, but do prefer
modern rather than classical literature when it comes to fiction. So anything by way of
recommendations from the likeminded folk in the cheap seats down here is like manna from
heaven.
If you haven't read it already, the better (not influences by Tolkein and post the
1950s-1960s SF) that is not obsessed with science and gadgetry might appeal to you. They use
other worlds as frameworks to put humans or human-like creatures in social situations
different than ours and play out the behaviors.
Many readers have said they regard Ursula LeGuin's The Dispossessed as one of the ten most
important books every written about politics. Her The Left Hand of Darkness is also a
classic. The space opera A Deepness in the Sky by Vernor Vinge is a great book. Readers
probably have suggestions outside warhorses like these.
Very few American writers deal with class reality. I recommend "American Rust," by Philip
Meyer, "The Beans of Egypt, Maine," by Carolyn Chute, and, for the office workers, "And Then
We Came To The End," by Joshua Ferris.
is it a love affair? where are the fights about money if sharing finances, and even
worries about money that cause pain to the relationship even if not?
It's ironic that discrimination against both blacks and poor whites was much more overt
back in the day. In our Southern cotton mill towns, 'lint head' was a worse deprecation than
the n-word (which is not to say that blacks were not at the bottom of the totem pole).
Nevertheless, people who grew up working in the cotton mills did, in many cases, move to
better lives. They often owned their own homes, and the paternalistic mill owners actually
provided recreation facilities, scholarships, and supplemented the pay of local teachers. One
woman, who, like many of the workers, came from the mountains to the foothills to work in the
mill, said: 'I never saw running water or a toilet until I started working in the mill.'
These types of studies suffer from a certain amount of GIGO. To base the definition of a
group upon European colonization is absurd. There are "Hispanics" of all races. Vanna White
is Hispanic. In this day of ancestry.com genomic analysis, a credible study should include at
least three determinants of race/ethnicity: self-identification, third-party identification
and genomic analysis.
Race and ethnicity are good for only so far in modern sociological analyses. Call me what
you will but I see "class" as independent of either. Any version of "True Believer"
Meritocracy would see this clearly and act accordingly. Of course, there is no such thing as
a "true" version of anything. The Meritocracy we suffer under today is just another
'mongrelized' shibboleth.
"Self identification" should also be broken down into "aspirational" self identification and
"cold hard desperational" self realization. The "meet me in St Louis" personal future vision
serves the same purpose as "Bread and Circuses" did for the Roman Empires' elites. Well, now,
the "Bread" part of that scheme is being short-sightedly whittled away by the Powers. No
grand conspiracy is needed to do any of this. Plain old greed and incompetence are all that
is required for an adequate explanation.
'Asian' is even worse. Pakistanis, Japanese and Indonesians have almost nothing in common
apart from arbitrary definition of what is a continent.
That being said, neuroticism varies between groups, and it is also a pretty stable
variable across a human life. Optimistic people are optimistic in even in adverse
circumstances.
Your mention of Vanna White made me think about when we will all have to buy a vowel
instead of using it for free, soon followed by all those consonants. No doubt, there is
someone, somewhere, working on monetization of language. Über could even charge extra
for the umlaut. /s
"The technological displacement of low-skilled jobs is here to stay – and is an
important issue for many countries, well beyond the US. Addressing this issue will require
longer-term changes, such as education and incentives that provide the young in economic
desserts the tools to move to where the new jobs are. "
Skill development (education) is not a problem/priority when capital has access to a
global workforce and ever cheaper labor. You can keep your production process rudimentary and
find a workforce willing to work for a pittance. If you happen to need a worker with
skills/education you can select a qualified one from any nation on the planet.
Has it dawned on anyone that "access to the global-workforce" is one of the primary
reasons that the U.S. has some of the worst schools in the world but has some of the best
universities?
Best universities. Even that is false now. Your average graduate has a similar level than
a high-school student from Asia or Europe. I have taken engineering at university and some
mates who when to the US to study as a part of exchange programs said that it was just a
joke
It turns out that letting education become another profit center does not produce the best
outcomes. But hey no wonder, the leitmotiv of predatory capitalism: the worst possible
product at the highest possible price has also been applied to your universities.
Your elites have devastated your country, sold its industrial base, stolen its
infraestructures and corroded everything. It's just a matter of time you lose what remains of
your global leadership.
The "scenes can only be shot in a large rooms, or sets with no back walls creating false
illusions of how wage earners live" comment is incredibly astute. Americans watch thousands
of hours of TV and movies and subconsciously must compare their living situation to what's
portrayed therein.
Besides all mentioned, I would like to add one more never mentioned item; as a former
resident of San Francisco, the most phony and enraging thing is that people in movies and TV
always get a parking place in front of their destination.
The reality is that drivers in urban areas waste ten, twenty or more minutes searching for
legal parking after a long tiring day at work, are raped financially by parking meters,
tickets and street sweeping zones.
Yes, I moved to the suburbs. The availability of unlimited safe parking was like regaining
vision that I never knew I missed until I could see again.
Parking is not a right-it is street space usually owned (and often freely given) by a
municipality. That municipalities wish to manage the use of their space property should
surprise no one. No one has the "right" to drive a motor vehicle and be able to temporarily
store it wherever they want at little or no cost! The real travesty is that we have spent
decades creating a built environment where for many, cars are the ONLY way to get around.
It didn't have to be that way. If you lived in a place where you had to pay the actual
cost of motor vehicle operation, but we're also able to easily live without one, you'd never
worry about parking again.
The Green Planner flashes his lantern of truth to light the way .
IF effective mass transit were available everywhere, your argument would hold more water. You
work the only job you can find and transit is not an option. What are you supposed to do?
Starve so that some Tesla or Range Rover driver can get the space that you so graciously left
for them?
Let me carry–what I believe is your point of view!over to other things:
Housing and food is not a right either. If people had to pay the true cost of living in
structures and raping the earth to eat, the more enlightened of them would realize that it
would be better to commit suicide.
the basic problem seems apartments etc. designed without parking spaces, but if they are
very old buildings dating back to when the automobile was just coming out then that's the way
it was (and of course some of san fran is quite old). Some mid century apartments also seem
to have been stupidly designed this way for no particular reason it seems (just stupid).
Yes municipalities should go all in for public transit, and we as citizens should push
them too. Build really really good public transit in all major cities (ok it's never going to
be a panacea for rural people, but the big cities, it is possible). But individuals make the
choices they do in the city spaces we actually have now.
Mass transit is not the only alternative to a car-centered built environment–I never
called for mass transit anyway. I am instead suggesting we could have built our areas of
habitation so that cars are not the most convenient (most heavily subsidized) travel mode.
Driving is cheap and convenient because we've made a lot of decisions to keep it that way.
And if you don't think it's cheap, you might be missing how expensive it is in other
places.
You're right that we don't pay the true cost of a lot of things, and if we did, all
aspects of modern life would be much more inconvenient. But the degree to which we subsidize
a lifestyle based on automotive accessibility is especially noxious, and disproportionately
affects the disenfranchised. Yes, there's not much we can do about it now. But people
believing they have a right to store their large machines on public property (for free) for
any length of time doesn't help.
The possibilities of what could be are crafted in the imagination, and the wretchedness of
'what-is' can be a powerful source of motivation. However, captured imaginations, the target
of TINA, where this crafting is stifled and semiotics are displaced with a preference to
conjure the mystical through religiose pious fiction, noble lies, magnificent myths etc., and
more recently through pseudo-science with "magi-matical" preciseness, disguising class dogma
behind an aura of {irrefutable} scientific 'credibility', has a long history hopium without
wherewithal seems the road to frustration for the have-nots, yet the toll-gates always seem
occupied by the haves.
Then there's gestation v. microwavable expectations , i.e., sowing and reaping v. reaping
without sowing with amazon 2day delivery insidious unilateral power of dependency.
"The rugged face of society, checkered with the extremes of affluence and want, proves
that some extraordinary violence has been committed upon it, and calls on justice for
redress. The great mass of the poor in all countries are become an hereditary race, and it is
next to impossible for them to get out of that state of themselves. It ought also to be
observed that this mass increases in all countries that are called civilized. More persons
fall annually into it than get out of it." Thomas Paine. Agrarian Justice. 1795
Moving to the US from a "third world country" riddled with graft and corruption, it was
amazing to see Americans complain so much when they had it so good. That was 45 years
ago.
Now, it looks like the US is turning into the country I came from.
Back home ( and yes, it seems I still think of it as home, go figure) religion and its
offer of salvation and hope, not to mention the acceptance of your lot in life, was the
opiate of the poor. Here in the US, real opioids are readily accessible to those who have
lost hope.
What's interesting is that now the jobs have moved over to my country of origin, the
middle class has quite improved, whereas in the US, where people always seemed to have it
easy, are now the ones that are in desperation.
Who or what to blame off the top of my head, Americans were prone to think they were the
center of the world, that they were number one. We, too, in other countries were made to
think that. Complacency kills. So does trust in elected officials who cater to multinational
corporations and financial behemoths.
Here is a brief but powerful paper on the correlations between "Deaths of Despair" –
the ills of rural Red State America – and voting support for Trump, by counties:
http://aese.psu.edu/directory/smm67/Election16.pdf
The very strange thing about the American economy today is that a good portion of the top
20% of the income distribution live in the realm of the two "happy" indicators: the low
unemployment rate and low inflation, which is not the reality that 60-70% of the nation is
feeling, as expressed both in the Sanders campaign and the election of Trump.
In reality, the upper 20% of the nation are living in, still, the "roaring 1990's" of the
Clinton Dreams, while many are experiencing 1929-1932 despair, even if the objective
conditions are not as horrific.
If the nation could only cross the Rubicon of intervention into Neoliberal Labor Markets,
via a WPA and CCC when the whole economy collapsed, it would help meet those needing work
half-way but it won't/can't. The Neoliberal rigidity on what government can and can't do in
labor markets is the obstacle, intellectual and practical. That helps explain why we can't
get to FDR's Second Bill of Rights from 1944 and "the Right to a Job" or MMT's job guarantee
program (as advocated by L. Randall Wray) despite so much of the nation's needed work not
being addressed: social, structural and environmental.
These tensions have played out inside the Democratic Party. The Clinton's think tank, the
Center for American Progress, has played two notes. In December of 2015 they put out a long
policy paper touting Apprenticeship Programs to fill the business cry for the "jobs-skills
gap," and it was followed by a number of shorter follow-up policy pieces pushing this
direction. Then came the "Ideas" Conference of May 16th, 2017, where they proposed a Marshall
Plan-WPA inspired targeted jobs guarantee program for a portion of those needed work, those
without a college degree. It didn't take, as the conference speeches an panels on that day
clearly showed, and this is how I interpret Senator Schumer's "Better Deal" Op-Ed in the New
York Times on July 24th. Apprenticeship programs have won out, and industry is happy to have
the public pick up as much of the cost as they can manage to shift.
I don't think this meets the need I see presented in today's posting by Carol Graham, or
the one I linked to by Professor Shannon Monnat from Penn State. Hardly.
I come from one of those desolate towns people talk about so much these days. My mother
always said the steel mill was a good company because they didn't pay in scrip, and they
built decent houses, paved streets, provided the utilities and so on. Eventually, they even
built a community center and library. At Christmas, they put on a parade.
That is all gone. The steel mills and mine are not only closed, the mill has mostly been
torn down. When I had to go back to care for my mother in 2004 I was shocked–downtown
had always been crowded with traffic. Now, I could have slept in Main Street with no danger
of being run over. All the stores were empty, or had turned into 'coffee shops' i.e. gambling
dens. Even our dignified old bank building was now a coffee shop! At first I thought the
coffee fad had reached us, and remarked on that to a neighbor I saw coming out of one. She
laughed and said, "I work in there. We just pour whiskey, that's all. It's one-armed bandits,
no fit place for women."
I could not buy the most basic things, such as getting a lock installed and a key made,
glass for the windows, lumber, or even cement. The house was falling down but I couldn't buy
what I needed. We lived in a nice suburban area, but most of the street was abandoned. Next
door, I saw a guy who looked like Cletus (in the Simpsons) building an actual camp fire in
the front yard! I was going to ask him to clean up the rat infested garbage pile in the
driveway, but decided it was best to avoid him.
No one had work. One relative's teenage boy was loading trucks at night for sub-minimum
wage and happy to have that. His mother, Linda, was subsisting on her mother's social
security. The old lady had a stroke in middle-age, could not move and screamed constantly.
She had to be lifted from bed to chair and diapered. Linda had done that since the 1980s, and
now had heart trouble herself. She had no earning skills and was trying to hang onto the
house. If she put her mother in a home, they would all have been out in the gutter.
Even as an RN, I could only find a few $10 hr jobs, not enough to live on considering the
long commute. I had to go back to the East Coast, and send money home to hire aides. I met a
lot of absolutely desperate people. One lady, who offered to help with Mom, was taking care
of her uncle and father, who both had dementia. My mother was violent, listened to nothing
and was difficult to manage. Aides quit as fast as I hired them but I was trying to hang onto
our family home which would be lost if I put her in a nursing home.
I did not see anyone sitting around drunk or stoned, and never saw that when I grew up
either. I think all those tales about violent, drunken hillbillies are just that–tall
tales. Most of the young people I met were going into the service. I found them to be good
steady people who did what I asked and felt bad I couldn't pay them more. They were having a
very hard time, as there were no jobs one could drive to whatsoever. It is the same
throughout the entire Ohio Valley. A wasteland.
The military seems to provide a decent solution but young people shouldn't have to risk
dying in order to get an education. My suggestion would be something like the old CCC.
Learning skills is not enough. People need to get away from the whole area and learn how to
live in 'the world' as Appalachians refer to the larger society. I had more than one young
person come up to me and exclaim, "I heard you was out in the WORLD. What's it like?"
Thanks Roxan. I live in a county in Western Maryland which is formally part of the legal
jurisdiction of the Appalachian Regional Commission, set up by Congress to bring the 13 state
area up to "modern" standards of infrastructure, education and I suppose, "the way the rest
of us live." I think the funding averages about $13 million per year per state, hardly making
a dent; it does offer loans for creative types with business ideas, including some green
ones. And I think the Trump Admin. zeroed out the funding, if not out right reached for the
organization's abolition, in their current budget proposals.
But you are right, something much more powerful in terms of outreach and structure is
necessary. A new CCC and WPA, yes, but much harder to achieve today, and the mission more
complex than the originals, which served mainly all young unemployed men. Today it will be
multi-racial, gendered and aged I don't know whether it is good to design it for the ARC
needs to take the citizens out of the region
I think the structure and cultural imperatives of work, including the psychological
benefits, are the way to go rather than the "guaranteed" annual income so fashionable among
parts of the left, and even with some Libertarians like Charles Murray.
For most of the work designs I've been thinking of, additional training will be necessary,
it's going to take more than a week of orientation, and flexibility will be crucial. I try to
keep the idea alive, difficult for the reasons I put forth in first comment above, to be
ready with at least some prototype, pioneer examples, to be ready for the next great economic
crisis. But, of course, the crisis is already here in this region (and the urban ghettos for
how long now half-a-century or more )
People need self-respect, and that comes from feeling competent. If you feel you can't do
anything worthwhile and never will, pretty soon you don't see any point in living.
Yes, a modern WPA or CCC of some sort, would certainly be different. I doubt there is any
funding, too. Has anyone ever had the idea of holding town halls to find out what people in
these areas think would work?
As for the Democrats, I remember when Kerry came to campaign in 2004. He went to the town
across the river, and hardly got out of his stretch limo. I had planned to go see him, but
they locked down both towns, and closed the bridge across the Ohio. I saw him on TV, making a
speech to what appeared to be a cheering crowd. Later, I read in the paper they had paid a
few old union guys to wave signs. He clearly had no interest in us. I was disgusted,
remembering how JFK came to our town and and discovered–guess what? Appalachian
poverty!
Yes roxan, I've been trying to get some momentum going for a CCC in our region because it
has a strong environmental ethic, working very hard to successfully ban fracking. Trying for
three years now.
I must have done a half-dozen postings at the Daily Kos on the topic, but there is just a
blank when it comes to alternative thinking about the economy, except for the decentralizing,
self-sufficiency, farm to table greens.
The opposition to Trump met to plan with a good turnout in Cumberland in early February,
and there were three or four major directions apparent. But by early April, only the feminist
caucus was still going, and they're decidedly not interested in the political economy.
Some of the small green businesses who supplied the leadership for the anti-fracking
campaign have struck me as being threatened by a program that might pay $15.00 per hour plus
benefits – which a CCC/WPA should do because they are competing for cheap labor as
well, and find that threatening. They'll never say that openly, but the local organic farmers
rely on a program called WWOOF, which is like a hostel arrangement without wages; the young
nomads come and work on the organic farms, learn something, get room and board, but no wages.
Here at
http://wwoof.net/
Is this whole
movement a serious hobby or a new economy in the making? It is troubled by all the ancient
problems of small scale agriculture: turning a profit and paying wages without turning the
workers into a scorned minority, like the migrants.
I think a green CCC with locally designed projects to help farmers with some of their
other traditional problems – manure storage and management, fencing to keep livestock
out of streams, and so forth, plus all sorts of needed restoration projects (wetlands,
contiguous forests, pulling invasives, fencing large areas and culling deer to restore native
vegetation ) which also should be designed for what they plant and where, multiple purposes,
to combat global warming, could supply a lot of purpose to countless lives.
I'm continually amazed at the resistance; cultural, economic, ideologically, and sad to
say, in too many cases, traditional business opposition to a "better deal" for labor, green
causes or not. Plus the great American tradition of stigmatizing those who have served time
or had addictions, who need the most help, and need purpose in their lives.
I don't know if we'll get there without a major collapse that forces the issue, forces
eveyone to face the truth that the private sector can't meet our human needs as currently
constituted.
My Congressman, John Delaney, got a written outline from me in a small meeting with him
and just one staffer: he was stony faced about it and has never shown any interest. If you
know about his plans for "infrastructure" – the terms on which he proposes to bring all
that idle American "capital" home, you'll know why.
I've also done presentations in front of the city of Cumberland's Mayor and Council: it's
a city in a county with 5,000 derelict structures: collapsing, abandoned, vacant. Lot's of
work to handle them and turn some into affordable housing perfect match some sympathy at the
council, but they also looked like I was proposing a mission to Neptune. Can't get more basic
about the needs in this situation this is a problem in all the old de-industrialized cities,
as well as throughout Red rural America as you so dramatically showed us.
Until I hear better proposals, I don't intend to stop pushing it. I also see this as a way
to get some more "democracy" into economics, proposing, planning, refining the work that
needs to be done another route that at times seems more logical, and ought to be easier, than
democratizing the workplace at Target or Home Depot – or Walmart.
I'm sure that if that national, state and local conservation groups got behind this, they
could come up with, easily, enough compelling projects to keep everyone at full employment
for decades. I've proposed a few myself. Enough for now.
If nothing else, your comment gives me hope that there's still such a thing as human
decency -- which you exhibit.
My grandmother lived to be 101 years old and, unlike your mother, enjoyed good health or,
perhaps better put not bad health considering her great age. She still lived in the town she
was born in and was one of those sorts who never left where they grew up. But my father, even
in the late 1970's, read the writing on the wall and moved us around (even becoming expats)
before settling in the south / south east (of England).
It's a little shameful -- but honest -- to say that I loathed visits. I made excuses and did
the minimum I could get away with. My Dad was the same. Although my grandmother enjoyed the
last vestiges of the social safety net we still cling on to here (local county provided
sheltered accommodation which had a warden and was fully accessible for someone who might not
be that mobile, social workers visiting every couple of weeks, visiting nurses, a doctor who
did house calls and care workers twice a day to help with personal care and nutrition) and we
didn't need to concern ourselves with that side of her situation, when we visited, we felt
like fish out of water.
The metropolitan sophistication and, yes, affluence, of London and the southeast made the
grimness, poverty and ingrained loss of hope (there's that word again) depressing to be
around. Our self awareness of our newfound snobby elitism made our discomfort even worse. It
was no use, or at least not honest and too much cognitive dissonance, to try to pretend that
we didn't find the small town mentality hard to take.
But then living with either no, or only poor quality jobs at minimum wage (the town is an
subscale inland port, literally the last place you come to at the end of the freeway and
after that it is more-or-less you fall into the North Sea) -- well, escaping is nigh on
impossible with our dismally low social mobility. And the town can forget about government
funded regeneration or benefitting from an industrial policy.
The short version was (both my dad and I tacitly and unspokenly concluded) that it was
easier -- for us, being selfish -- to stay away. So I can fully understand the selflessness and
sense of duty you've shown. It makes you a better person than I am.
Of course, none of us should have to make these unpalatable choices. There shouldn't be
anywhere in our countries where we feel simultaneously alienat
ed
and alienat
ing
.
I like how you write. This is a very despairing present and outlook
"Most of the young people I met were going into the service..The military seems to provide
a decent solution but young people shouldn't have to risk dying in order to get an
education"
A solution from no other choice. Some of the youngsters will understandably make a virtue out
of necessity & claim patriotic duty as their calling. The avenues to patriotism &
what patriotism is for every patriot are various. Patriotism is another big word.
Strumpet City (both a book and TV series) is a story about how the working class of
Dublin, Ireland go on strike for better pay and working conditions. The strike is broken and
the Irish story hero is last seen in a British military uniform sailing away from his home
and wife to fight for a foreign government in some foreign land. (Although fictionalised,
this story is a dramatisation of actual historical events.)
The story was set at the turn of new 20th century. I suppose not all that much has changed
at the turn of the new 21st century.
The monied want more and then the poor by necessity set off to fight the impoverished of
foreign lands in the name of
The populists, Trump and Brexit are all symptoms of the same underlying problem.
Neo-liberalism was seen as a one size fits all model for the world.
When the neo-liberal model worked everyone was fairly happy with it before 2008.
Then it stopped working and no one seems to know how to get it working like it used to
before.
The underlying economics, neoclassical economics, doesn't look at private debt in the
economy and so no one was really aware the whole thing was running on easy credit.
The US economists that developed these ideas were missing certain critical
information.
Monetary theory has been regressing for one hundred years:
It has never been accurate in their life times and has only ever known by a few.
Milton Freidman started with "fractional reserve theory" and then moved to "financial
intermediation theory". His early monetarism didn't work because the "fractional reserve
theory" was flawed. "Financial intermediation theory" is even worse but its problems remained
hidden until 2008.
The US history of capitalism missed problems in the Old World.
The US was a new country where lots of land remained unclaimed. In the Old World the
landed Aristocracy were constantly pushing up wage costs with their rentier ways. The rents
of the Aristocracy had to be paid by business in wages reducing their profits.
The Classical Economists of the 19th Century were only too aware of the two sides of
capitalism, the productive side where wealth creation takes place and the parasitic side
where wealth extraction takes place.
It all disappears in very early neoclassical economics.
The distinction between "earned" income (wealth creation) and "unearned" income (wealth
extraction) disappears and the once separate areas of "capital" and "land" are conflated.
The problems with rentier activity in the economy are hidden in economics.
These things disappeared so long ago everyone forgot about them, but a free trade world
required a low cost of living to pay internationally competitive wages.
The repeal of the Corn Laws to usher in the era of Laissez-Faire.
The landed aristocracy wanted high corn prices to get more land rent.
The businessmen wanted lower corn prices, to lower the cost of living, for lower,
internationally competitive wages.
The conflict between rentier and business interests with free trade.
I flag the idea "economic desserts [sic}" in the second to last paragraph. A region with
no work, nowhere to buy or sell anything, and no assets of significant value? I wonder how
you could map it, and how much of the area of the nation would fall into that category.
I've worked in one, a Central Oregon county that almost had to close its road department
because of the lack of tax revenue. Tree cutting and mill work disappeared decades ago.
Ranching is the core of the economy, but that is less labor-intensive than ever, and dealers
of equipment and materials are all in other counties. Starting a family ranch is impossible
if you're not already a multimillionaire. For many years the tiny Chevrolet dealer was the
largest employer in the county.
Economic desert is an apt descriptor for places like that. The kids have been leaving for
generations already -- the author of the article suggests education and training programs that
will make it easier for them to leave. No other suggestion. No ideas for regional economic
development, for example.
Speaking of lack of hope, it occurs to me that the only way a Bernie/progressive agenda
would possibly be adopted by the DNC is if the republicans were doing ok or good from a
legislative and presidential standpoint, because then this puts the pressure on the Dems to
put forth something that works and change their ways if they want to win back power.
However, since we are witnessing a truly impressive trainwreck and lack of competence on
the part of the right, both within the house adopting legislation and within the presidency
itself that is doing god knows what on any given day, all the Dems have to do is sit back and
watch, and wait for their turn at the booth. As there are only two options in this wonderful
system of ours, the American citizens have nowhere else to go come 2018 and 2020.. the slogan
"at least we're not them" will be enough – with some "progressive" tidbits thrown in
for good measure a la Schumers' latest proposal.
I had to make myself read this. My mind diverted to word hope and what makes it become an
experience. Just to add a little to it.
I resented Obama for selling hope while he was doing it. It seemed a manufactured hope as
opposed
to organic hope (such as hope arises in response to something that occurs that does not seem
possible).I believe that for most black people the existence of Barack Obama's candidacy and
then his victory generated a huge quota of hope. It was palpable to many of us and elicited
some unsolicited hope in us too.
I believe this emotional state trumped and trumps the reasons listed in this article. The
above was
transformative and perhaps many black people may feel more entitled to express their anger
now.
Another example of hope arising from something that occurred that does not seem possible in
the short term is same sex marriage. Both of these segments of our population have been
injected with hope
unlike the "poor" category which have been inflicted both emotionally and physically with
loss and
disillusionment. The erosion of the public domain is an attack on the ideals and property of
the working people of this country.
"Poor blacks are also half as likely to experience stress – a significant marker of
ill-being – on a daily basis as are poor whites, while poor Hispanics are about
two-thirds as likely."
I'm not sure this piece of research is correct. I haven't checked the reference, but I'm
sure I read another piece of research a while back that said that suffering from racism
causes a great deal of stress and psychological problems. The whole article appears to be a
lot of waffle in my opinion. For example how can you possibly define hope. I once read that
if you read a piece of research and you can't think of a way that an experiment can be done
to show the results, then the research is invalid. I can't think of any experiment that can
measure such an abstract concept as hope (the concept of hope is far more abstract than
anger, for example).
For some reason I can no longer reply to the relevant comment.This is an addition to "jane
@ 7-03".
One of the most interesting things that has happened over my lifetime has been the almost
complete disappearance of the past for the younger and the modern age.The element that I'm
referring to is older proverbs and aphorisms,in this case "Hope makes a good breakfast but a
poor supper".
I've also been told that each of the "Friends" would have to be earning $130,000 each to live
their lifestyle and they wouldn't be loafing about on the sofa doing it.
Does anybody in America earn 130K rather than more or less?
"... Common core math is indeed an abomination. It nearly destroyed my son's interest in math. I'm teaching him old school math. Of course, I am also supplementing his history lessons with alternative analyses and with a more comprehensive range of topics. ..."
"... Another thing – most teachers of common core math at my son's public school do not understand it themselves. I noted errors in homework assignments which only compounded the confusion among the students. ..."
"... One more thing – they are expected to learn from online videos and sloppily prepared study sheets – not a real math book. The school system is trying to make education paperless. This, to me, stunts the critical skills of eye-hand coordination, the ability to express abstract concept visually (e.g. making good sketches of ideas), etc. For example, mechanical drafting skills with the associated ability to visualize have been replaced by learning how to manipulate software. ..."
"... Perhaps these are cost-cutting measures but the results is that the US public education system, from my experience, is in free fall. ..."
Common core math is indeed an abomination. It nearly destroyed my son's interest in math.
I'm teaching him old school math. Of course, I am also supplementing his history lessons with
alternative analyses and with a more comprehensive range of topics.
Another thing – most teachers of common core math at my son's public school do not understand
it themselves. I noted errors in homework assignments which only compounded the confusion among
the students.
One more thing – they are expected to learn from online videos and sloppily prepared study
sheets – not a real math book. The school system is trying to make education paperless. This,
to me, stunts the critical skills of eye-hand coordination, the ability to express abstract concept
visually (e.g. making good sketches of ideas), etc. For example, mechanical drafting skills with
the associated ability to visualize have been replaced by learning how to manipulate software.
Perhaps these are cost-cutting measures but the results is that the US public education
system, from my experience, is in free fall.
Here is a tin-foil hat theory based on the linked article. If Bill Gates is promoting a method
of education that stunts learning among the masses while sending his own kids to private school
that does not use the same method, could this be a way help to create a society of dysfunctional
masses ruled by a well-trained elites?
When it comes to Math, I think the traditional textbook approach is the best. For History and
the social sciences, though, I would recommend replacing big textbooks with individual monographs
and other study materials focusing on specialized themes.
Reason being: For Math, there is a standard (finite) set of facts and techniques that need
to be mastered at the school level; whereas there is no such thing as a "standard" or finite sets
of historical facts.
Somebody else suggested they are trying to prepare kids to become programmers of digital computers
(like Bill Gates started out). But that doesn't make any sense either, because digital computers
do not use this method to subtract. Instead, they use a method called "2's complement addition".
Computers do use binary arithmetic, but for a human to do so, it involves converting from base
10 to base 2 and then subtracting. In order to convert from base 10 to base 2, you have to follow
a step-by-step procedure which involves the remainder.
That is just bizarre. One commenter suggested the methods might be geared toward more complex
problems where numbers do not represent real things, but concepts; but I just can't see that,
either. But then, I've never been good at math and was always afraid of it. Whatever the case,
I would have dropped out of school in Grade Three if I'd had to learn this way. It makes math
problems ten times more complicated than they need to be, and every time you introduce another
step you introduce another possibility of making a mistake.
Very true ! I am pretty good in math but this is still too much artificially
introduced complexity for me too. Still it would be a perfect way to work with roman numbers.
And that's BTW why Arabic notation is so much superior.
"... And this begs an obvious question: if customers complain about how banks let them down, why are the banks not concentrating on what customers are telling them is wrong with the products and services the banks provide already – rather than spending time and money on creating new supposedly innovative ones? The answer is, of course, that it generates profits for the banks to do things which customers find annoying (high fees, obscure product features and even bank errors which cause the customer to lose and the bank to win). Or else it costs money, such as to train staff and then retain that knowledge in their workforces or to have sufficient numbers of staff available in the first place, to fix the problem. ..."
"... In a digital world filled with choice ..."
"... choice, empathy and ease of use designed into every interaction they have with the bank ..."
"... For one thing, which may not be obvious to those outside the industry, working in finance is usually incredibly boring, frustrating, tedious and slow. While the outsized pay can and does attract intelligent and talented people, some of whom are quite creative, it is just about the worst place for those sorts of people to work. Systems and operations are convoluted and difficult to change because of their complexity. Banks are large bureaucracies with fiefdoms, turf wars, massive egos and driven by the need – in the cause of maximising shareholder value, the alter upon which many business have to sacrifice themselves – to implement the lowest cost solutions. ..."
"... It is not uncommon for the graduates and those recruited from the top performers in science and technology to join banks. They are lured by high pay and the promise of joining the Masters of the Universe. Sadly, they often find that the reality is form-filling, battles with nickel-and-diming accountants and internecine warfare. Boredom, for want of a better word, drives many of them to seek out vanity projects or resume-burnishing novelties such as fintech. ..."
"... There is no greater trojan horse to change an organization than design thinking, said Stephen Gates, head of Citi Design. " Especially with something where there are lawyers, regulators Part of what we had to do was change thinking, not behavior. If it's new behavior on old thinking, we didn't really change anything." ..."
"... lawyers, regulators " ..."
"... Perhaps banking has killed off its most appealing aspects and left its minions filthy rich but with nothing stimulating to do. ..."
"... Automated decisioning has removed a lot of the skill and judgement for banks' credit officers. It has also removed a lot of credit officers! There's virtually no discretion available in retail credit policy and no-one empowered to override standard-model largely FICO derived lending decisions. As you say, a lot of local market knowledge helped banks and their lending teams make credit decisioning much more flexible in the past. ..."
"... It fascinates me how fascinated banks are with big data now. When banks were the first and ultimate big data company – just the data processors were people, not machines. Then they used the machines to streamline processes, seemingly w/o realisation that streamlining processes gets you commoditised (as its eminently copiable). So now banks are struggling to avoid a commoditization while working very very hard at it. ..."
"... I agree with Doctor Duck: the idea that because it's programmed, it's a better bureaucracy has really turned out to be a false promise. Just look at the financial crisis and reverse redlining (ie, predatory loans) was used as a financial weapon against minorities. ..."
"... Aside from racial injustices, it's pretty obvious that "the programming" is there to reify existing class divisions. There's no bureaucratic computer program that seeks to free people from the crushing bonds of class. Max Weber would have a field day. Bureaucratic technology ensures that there's no charisma appearing in the system. ..."
"... "On average", a college degree is an order acceptance and an endurance performance index within that order,thus, it is a cost efficient recruiting tool to exclude online non degree applicants from the very outset ..."
"... If you really want to get disgusted, look up "Learning Analytics". Venture capital is streaming into these startups that are aggressively data mining students. None of it ever passes through an ethics board and much of it violates FERPA, but the Department of Education seems to shrug their collective shoulders about it. Probably because many Dept of Ed personnel end up at those companies as advisors. ..."
"... And don't get me started on those tablets. Google hands out Chromebooks and swears up and down that they don't collect usage data. ..."
"... Well, see, arithmetic and maths and English and composition and Physics and Chemistry change so often that using paper textbooks would leave paper textbook students hopelessly behind students using tablets. OK, tablets cost on the order of 3 times what paper textbooks cost for the same usable time-span. But, hey! It's new! It's now! It's happening! (And also, too, rents.) /s ..."
"... One aspect you didn't cover, that I think may be more important than fighting off regulations (although that plays a role, I'm sure) is that I think execs are looking to get a piece of the silicon valley, techland infinite money-pile. They see Tesla worth more than Ford and they dream of where their stock price (and their stock options!) might go if they were thought of as tech companies instead of boring old banks. ..."
"... And part of it is fear. They are afraid of being the next Sears or local taxi company or whoever getting disrupted by the infinite silicon valley money-pile, either by the startups that can burn billions of dollars buying market share or by the big players who can leverage their entrenched monopoly positions in their core markets to spend billions trying to take over any market they feel like. ..."
"... The issue is that the banks have no incentive to address the 5 issues that you raised. They are a rent seeking cartel that does not care about the well being of the general populace at all. They certainly are not tech start-ups. I get the impression that most people think that tech startups are God, but in reality there are many bad start-ups too. ..."
"... Basically, their money is made screwing the general public over at this point. That's sad to say, but it is not far from the truth. What we need is a public bank and/or larger credit unions that can offer all the financial services of a big bank. ..."
The first paragraph states what may be obvious to those outside the finance industry bubble. Namely
that users of financial services mostly do not want or need so-called innovative financial products
or any new ways of using finance in their lives. Rather, they want banks to provide simple, easy-to-understand
basic financial products that work. According to the copious data available from the
Consumer Financial Protection Bureau which I've analysed, retail bank customers' top five sources
of complaint are:
Fees.
Poor customer service.
Unpaid checks or other bounced payments.
"Gotcha's"
hidden in product Terms and Conditions small print.
Bank errors (which were either not corrected,
took a lot of effort to get corrected or the corrections caused other knock-on issues).
I've worked in finance for nearly 30 years. The very first list I ever saw for complaints looked
exactly the same as this.
And this begs an obvious question: if customers complain about how banks let them down, why are
the banks not concentrating on what customers are telling them is wrong with the products and services
the banks provide already – rather than spending time and money on creating new supposedly innovative
ones? The answer is, of course, that it generates profits for the banks to do things which customers
find annoying (high fees, obscure product features and even bank errors which cause the customer
to lose and the bank to win). Or else it costs money, such as to train staff and then retain that
knowledge in their workforces or to have sufficient numbers of staff available in the first place,
to fix the problem.
Customers, even if we are supposed to be " In a digital world filled with choice " don't
need " choice, empathy and ease of use designed into every interaction they have with the bank
". We want to not be ripped off and for the banks to act competently in our dealings with them.
It is too much of a stretch to expect that the banks, unprompted or without being cajoled by regulators,
will address structural issues around their business culture, executive conduct and outlandish profitability
ratio expectations. However, we should expect continued wailing and gnashing of teeth from the banks
about "innovation" and the need to be "competitive" in "the marketplace". The latter is a complete
and immediately disprovable canard though, because the top 5 banks control nearly half of the
market .
So why, then, do the banks keep going, broken-record like, with their claims about the need to
innovate?
For one thing, which may not be obvious to those outside the industry, working in finance is usually
incredibly boring, frustrating, tedious and slow. While the outsized pay can and does attract intelligent
and talented people, some of whom are quite creative, it is just about the worst place for those
sorts of people to work. Systems and operations are convoluted and difficult to change because of
their complexity. Banks are large bureaucracies with fiefdoms, turf wars, massive egos and driven
by the need – in the cause of maximising shareholder value, the alter upon which many business have
to sacrifice themselves – to implement the lowest cost solutions.
It is not uncommon for the graduates and those recruited from the top performers in science
and technology to join banks. They are lured by high pay and the promise of joining the Masters of
the Universe. Sadly, they often find that the reality is form-filling, battles with nickel-and-diming
accountants and internecine warfare. Boredom, for want of a better word, drives many of them to seek
out vanity projects or resume-burnishing novelties such as fintech.
Lining up alongside a desire to do anything to relieve the monotony push, bank C-level leaderships
then adds a pull all of their own. A preoccupation with trying to escape regulatory and legal constraints.
For evidence, let's return to the Tearsheet post:
There is no greater trojan horse to change an organization than design thinking, said Stephen
Gates, head of Citi Design. " Especially with something where there are lawyers, regulators Part
of what we had to do was change thinking, not behavior. If it's new behavior on old thinking, we
didn't really change anything." ( emphasis mine)
Superficially, this doesn't sound especially problematic. It could even be construed as plodding
old legacy businesses like banks trying to adapt themselves to the modern knowledge economy era.
Such superficial analysis would be wrong. Firstly, repeating a cliché of innovation and relying on
invisible hands that ceaselessly drive any and all businesses to discard everything they've done
historically and start afresh is just that, clichéd.
The notion that everything a business has learned and any intellectual property it possesses has
suddenly, somehow, been rendered obsolete by some vague notion of an immense technological development
is repeated so often that it's become part of our prevailing culture. But aside from a very small
number of breakout products, such as the personal computer, the internet and the smartphone, most
products you buy or services you use are only ever incremental improvements on what has preceded
them.
The same applies to banking. Without getting too bogged down in the technicalities, a bank's only
functions are to intermediate maturities and interest rates on deposits taken and loans made, plus
to offer some money transmission services. Within financial services, the only two true innovations
in the past 50 years or more which stand up to a scrutinizing of that term are the ATM and the credit
card. Changes to how customers are serviced such as the migration from the branch channel to the
telephone or the internet have shifted the "where" and the "how" banks interact with their customers,
but not the "what" of those interactions.
The line I highlighted in the Tearsheet article gave the game away. The participants who's thinking
purportedly needs to change are not the accountants picking through expense reports stripping
out costs (which usually means reducing headcount). Nor is it the thinking of executives to reduce
their outsized compensation packages. Nor is it in boards who will only look at changes through the
lens of a 5-year business case which must pay back within the shortest of short-term timeframes
and satisfy outlandish Return on Investment (ROI) targets. These ways of thinking have been
with us for at least 20 years or more, but apparently aren't in any danger of approaching a sell-by
date.
No, the thinking that needs to change is that of " lawyers, regulators " who are being
exhorted to change to embrace the latest design trends and technological innovations. But regulators
and lawyers are not and cannot be creative types who spend their time considering new colors for
logos and typefaces for websites. Their jobs are to enforce or provide advice and guidance on the
laws governing a corporation's products and services or to interpret regulatory frameworks which
have been enacted by regulators and lawmakers. Creativity, design thinking and behavior doesn't come
into it. Just because a bank wants to label a change as being innovative doesn't -- or shouldn't --
lessen the obligations on a bank's legal team or the regulators to comply with laws or existing regulations.
Gutting regulatory compliance and trying to side-step legal obligations aren't "design thinking".
They're the same connivances which would have killed the entire banking industry 10 years ago, had
we not all been coerced into bailing it out.
You can't blame the banks for trying it on. They are what they are and will continue to be so
until they are forced to change. You can, however, fairly and squarely blame regulators and lawmakers
for not pouring a lot of cold water on this craving for technological fervour. Making the banks tackle
their long-standing issues as evident in the CFPB's complaint data before they can try anything
fancy like fintech would be a start.
Survivor of nearly 30 years in a TBTF bank. Also had the privilege of working in Japan, which
was great, selling real estate, which was an experience bordering on the psychedelic.
A question from a total outsider: if modern banking is tedious and frustrating, could this
be related to the (often-mentioned here) move away from servicing credit needs to algorithm-driven
mechanics? If I think of the banker who sat in a front window of his bank on the main square of
my home town, he was surely engaged in figuring out who was mortgage-worthy, what businesses might
be good bets for loans, etc. It might have had its routine aspects, but it was engaged, integrated
into the town's life, and required complex skills including how to say no to the guy who would
sit next to your family at church. Perhaps banking has killed off its most appealing aspects and
left its minions filthy rich but with nothing stimulating to do.
Automated decisioning has removed a lot of the skill and judgement for banks' credit officers.
It has also removed a lot of credit officers! There's virtually no discretion available in retail
credit policy and no-one empowered to override standard-model largely FICO derived lending decisions.
As you say, a lot of local market knowledge helped banks and their lending teams make credit decisioning
much more flexible in the past.
I was though more referring here to the technology side of banks -- they are the antithesis
of what many attracted to enter the sector think it will be like. There's so many internal bureaucracy
hurdles, complexity constraints and cost-focussed management to work with, the people who unwisely
buy into the hype the recruitment consultants proffer end up frustrated and disappointed. It is
almost inevitable they go looking for glamour projects -- however unworkable they may be like a
lot of fintech -- to try to latch onto.
Of course the bad mortgages that were a big part of the RE bubble were approved by poorly thought
out algorithms. As were the ratings on the bonds created from them. Algorithms are really only
as good as the data that they are based on and the knowledge of the people who write them. And
when it is profitable in the short term to ignore the long term, rest assured that somebody will
figure out a way to make the algorithms do that.
That said, it's an interesting world out there, as banks do vary from country to country (having
had experience in a number of them, on both sides of the fence).
Say in NZ, I had a bank manager, and he had some (reasonably) ability to vary the interest
rate on my mortgage when I came asking. He could also offer special rates on deposits (over a
certain amount).
In the UK, I also had a bank manager. Who wasn't even told by the bank's credit card department
my CC application was rejected as I wasn't in the country for long enough, so he kep submitting
it in the belief it got lost.. To modify an interest rate on anything was impossible. And, most
recently it's even impossible to override the automated lending decision. Hurrah for automation!
It fascinates me how fascinated banks are with big data now. When banks were the first and
ultimate big data company – just the data processors were people, not machines. Then they used
the machines to streamline processes, seemingly w/o realisation that streamlining processes gets
you commoditised (as its eminently copiable). So now banks are struggling to avoid a commoditization
while working very very hard at it.
On the flipside, removing personal discretion from credit judgement calls also makes the process
more fair – less "redlining," and no denying credit based on personal prejudices (or approving
loans for friends and family)
That's a valid point -- it was too easy for a friends-and-family bias and even bribery to creep
in to human decisions before model-based credit decisions became the norm. The happy-medium was
when predefined scoring criteria were used as the foundation for a loan but you could appeal to
head/regional offices for an over-ride if you had good extenuating circumstances or other reliable
evidence to back you up.
The latter option is now no longer available, for the most part.
I agree with Doctor Duck: the idea that because it's programmed, it's a better bureaucracy
has really turned out to be a false promise. Just look at the financial crisis and reverse
redlining (ie, predatory loans) was used as a financial weapon against minorities.
Aside from racial injustices, it's pretty obvious that "the programming" is there to reify
existing class divisions. There's no bureaucratic computer program that seeks to free people from
the crushing bonds of class. Max Weber would have a field day. Bureaucratic technology ensures
that there's no charisma appearing in the system.
We've created machines in our image, with all our prejudices and all of our assumptions in
place, preserved in silicon forever.
Process more objective. The red lines are the ones written into the algorithms. I recall a
Ted Rall post about Dayton OH that described them demolishing empty historic buildings to get
their occupancy rate up. Banks algos wouldn't grand mortgage funds in areas with high un-occupancy
rates. This is death to Jane Jacobs' recommended city environment, where a range of available
rents, low-to-high, nourished every kind of development. A new-scale developer, blogging as
Granola Shotgun has
a lot
to say about this -- the linked posts and a lot before.
Actually, a recent study took a classic psychology evaluation used on humans to detect bias
and modified them to apply to so-called Artificial Intelligence and found that the same biases
pop-up. The authors conjectured that the training data – compiled by humans – introduced the humans'
biases into the system.
This reminds me of the statistical gender discrimination algorithms used in the past. Some
subindustries considered cost efficient to screen out women for employment because of the probability
of maternity leave-apparently there were other "average gender biased considerations too"-. This
excluded first, women who did not want to have any kids, and secondly-and independently from that-
diverse, able, capable and willing labor participants. Have you ever asked yourself why some jobs
which would not require a college degree by any stretch of the imagination screen out electronically
the non-college degree applicants? "On average", a college degree is an order acceptance and an
endurance performance index within that order,thus, it is a cost efficient recruiting tool to
exclude online non degree applicants from the very outset. This way the enterprise leaves out
that which the average does not include and which in certain cases could bring terribly needed
different approaches to a job .Yet, no one ever said enterprises were democratic, truly inclusive
and open to certain changes.
In regards to the financial theme, programmer 3 commented "removing personal discretion approving
loans from friends and family". Anyone who worked for a lending company in the past knows it was
a matter of policy that no employee could make loans to relatives or friends.
Remember that personal
discretion-as opposed to personal arbitrariness-acts within written and unwritten guidelines and
rules too. Also, what your stand alone algorithmic dictatorship does to how delinquencies are
currently managed by the mortgage industry it just simply has no name.
"On average", a college degree is an order acceptance and an endurance performance index
within that order,thus, it is a cost efficient recruiting tool to exclude online non degree
applicants from the very outset
.
These days, a college degree is also a prime indicator of life-controlling debt.
Not in South Africa, where race is big factor in determining the risk profile of the client.
As you can probably guess, the machines have been programmed to grant punitive interest rates
to black people
That is the worst example of this kind of thing I've ever seen! And we've seen plenty here
it deserves some kind of award, in the same vein as the anti-Academy Award "Golden Raspberries"
does for motion pictures. It might, Clive says hoping, be some sort of parody. Unfortunately,
I think it is for real.
To show my disconnect from the modern world, the linkedin article closes with "PI-shaped people"
I had to search for that, first suspecting it meant a person who levers their abilities by
3.14159xxxx
From what I found, there are T-shaped, PI-shaped and Comb-shaped people and the symbol's shape
is a sort of expertise indicator.
A T-shaped person has one area of expertise under their generalist/broad knowledge top hat,
a PI shaped person has TWO areas of expertise under their generalist/ broad knowledge top, while
a comb-shaped person has MULTIPLE expertise areas under their generalist/broad knowledge top.
Do people make a living coming up with this stuff?
From the list, the first one, fees, aren't going away given that the interest margins are so
narrow.
I've seen a number of banks partner with one of the non bank fintech's (even pre IPO fintech's)
to make the bank fintech savvy. To get their computer driven credit system? It will take a while
to see how that works out.
The agile design led stuff reminds me a lot of the TQM programs I went through in the 80's
/ 90's. Independent thinking within the group, commitment to the group to do the work, rolled
out in large scale. We're even moving away from the cube farm to the factory floor, with foosball,
xbox's and (sometimes free) coffee for all.
Likewise, the whole spinoff/startup thing was in vogue back in the early 90's when banks were
faced with e-commerce, this is just the 2017 version.
Legacy is, and in some ways should be, their issue. Systems of record for fin transactions
should have a long shelf life. With that comes people, process, costs and profits, all major drags
on change. They won't be able to have it both ways.
Me thinks that this kind of hype reaching banks and even politicians (the Danish government
has created a "Disruption-council") is a sign that things are not going so well inside the engine
room on the mother ship of the technopocalypse. Governments and Banks are kinda the very last
people on earth to discover anything. At All. When they are suddenly "getting the vibe" whatever
"the vibe" was about, is absolutely over :).
I think that Silicon Valley is leaking flim-flam merchants and "evangelists" because the money
is getting thinner, the sell is becoming harder, easy consulting opportunities are diminishing
and fewer are being procured by the real operators (Apple, Google, Facebook, CISCO .) to provide
their stunning insights and bold visions for the future. The accountants are ascending, ROI is
being scrutinised, exponential growth is levelling off so now there is time to do that.
The visionaries and evangelists still like to be paid (and the travel), so instead of canvassing
Silicon Valley harder with work better suited to the actual future, they spread out and seek new
markets for the same old stuff, kinda like what happened when Monsanto poured PCB into everything
plasticky when the market for oil-filled capacitors was tapped out.
I'd say, in only one-two years, there will be good "SPLAT!" in the .unicorn market.
Keeping score from recent battles among local demi deities, currently turf beats innovation,
and in a stunning reversal that may not last, cost cutting prevailed over turf. These battlefields
rather than the PowerPoint campaigns being where I observe corporate culture.
I'd add one innovation to the list though – smart sweep systems. That is, something that optimises
the costs of an account/accounts for a client. That could be just sweeps between saving/checking
accounts (not talking US here), to queuing transactions as to minimize costs etc.
But the banks that implemented this found very quickly that it led to a significant drop in
client profitability (namely overdraft fees collapsed, interest paid went up), so quietly canned
it.
But the story doesnt' end there – the smart ones figured out that optimization doesn't care
whether you do max or min, so used the technology to optimise the profit from the client – hence
things like applying debits before credits (to take you into overdraft) etc. Forunately, this
"innovation" went out too, but it took regulators to get it done.
Yes indeedey. My TBTF stopped allowing new sweeps / pooling arrangements which was a great
service for customers who wanted to keep money on deposit or even in a market-linked account but
didn't want to have to worry about constantly keeping an eye on what was in their current (checking)
account to make sure they weren't going to go overdrawn.
Simple to understand, easy to set up for both customers and the bank, worked flawlessly because
it was just a nightly batch job with easy-peasy logic -- what was there not to like? Erm unfortunately
for the customers, the hit on bank profitability.
Gaaa. Let me fix a bit of the Tearsheet intro: "In a digital world filled with choice, banks' customers need choice, empathy and ease
of use need sound information, good customer service and accurate accounting designed
into every interaction they have with the bank."
I use my bank as a utility, not as an exciting "experience."
Hey Clive, loved this piece. This really caught my attention:
For one thing, which may not be obvious to those outside the industry, working in finance
is usually incredibly boring, frustrating, tedious and slow. While the outsized pay can and
does attract intelligent and talented people, some of whom are quite creative, it is just about
the worst place for those sorts of people to work. Systems and operations are convoluted and
difficult to change because of their complexity.
I've worked in higher education and you see the same thing going on right now. Education, to
me, is a social process of imparting knowledge. Simple solutions to perennial problems in education
are: (1)Smaller class sizes (2) Better pay/benefits for teachers (3) Support systems for parents
to help them help their children do well.
But what happens in education? Well the same thing you mention above: technology is thrown
at these kids a mile a minute. Suddenly, the solution to problems in the classroom is monitoring
grades through centralized systems with their databanks on the cloud, where student's every move
is considered and they are flagged technologically for not living up to expectations. There's
a huge complex of technological charlatan/consultants infesting higher and primary education at
the moment.
Before long, the "boring" solutions are impossible. Why? As you say above, the technology becomes
ensnared in itself, taking on its own inertia. Before you know it, you can't afford to change
anything for the better because you have several legacy systems running simultaneously and weighing
down budgets.
It takes a lot to shock me, nowadays, but I was genuinely taken aback when an educator friend
of mine (in our equivalent of K-12) told me she'd been given a tablet with -- from what I could
tell, I didn't see it in action -- proprietary software used by the chain academy (charter school
as it would be called in the US) where she works which prompted her during lessons to capture
certain metrics (numbers of students voluntarily putting their hands up when asked certain previously
defined questions in class, time spent on a particular PowerPoint slide -- a PowerPoint slide I
thought for cryin' out loud -- which had been similarly predefined and "tagged for follow up" versus
the estimated "best practice" time slot for this classroom content, a teacher-subjective "score"
for student "engagement" and similar).
As a bit of a data nerd, I was appalled not just by the intrusion into territory where, surely,
experienced educators knew best what to do, how to pace lessons, how to make best use of classroom
time and so on but -- more importantly -- by the risible quality of the data being gathered. It
was what I call pseudo facts, things which sound like they might be telling you something
worth knowing but don't actually prove anything.
It all reminded me of those animal behaviour studies, the ones which come to conclusions like
"when a cat comes towards you and it has its tail upright, it is engaged with you and wants you
to interact with it". Sufficed to say when I tried out the theories on my mother-in-law's cat,
I got a scratched top of my hand for my trouble.
Love the cat analogy. Glad, or rather not glad, to know that it's reached across the pond.
If you really want to get disgusted, look up "Learning Analytics". Venture capital is streaming
into these startups that are aggressively data mining students. None of it ever passes through
an ethics board and much of it violates FERPA, but the Department of Education seems to shrug
their collective shoulders about it. Probably because many Dept of Ed personnel end up at those
companies as advisors.
And don't get me started on those tablets. Google hands out Chromebooks and swears up and down
that they don't collect usage data.
Well, see, arithmetic and maths and English and composition and Physics and Chemistry change
so often that using paper textbooks would leave paper textbook students hopelessly behind students
using tablets. OK, tablets cost on the order of 3 times what paper textbooks cost for the same
usable time-span. But, hey! It's new! It's now! It's happening! (And also, too, rents.) /s
Yeah, it's not like those old fashioned printed text books wouldn't go out of date (unless
there was a lot of needless curriculum churn) and not have a useable economic life, even allowing
for students' not-too-careful handling, of 5 to 10 years or so. Oh wait a minute
Example of what I like to the call the "If you want faster-than-light-speed travel tomorrow,
you have to let us commit fraud today" argument. Question is, whose eyes are they trying to pull
the wool over? Investors to be wooed by web 2.0 jibberish? The top brass, to justify their continued
employment and/or promotions? The public, as a horse and pony show to distract us from the bezzle?
Regulators, hoping that the innovation and tech talk will intimidate them from paying attention
to the man behind the curtain?
Good post Clive, as someone who's been in banking for a few decades now, the current moment
is very reminiscent of the late 90's, even down to some of the details.
Was on a call with some senior folks a while back rhapsodizing about how cutting edge neural
network models would revolutionize our business, and I turned to a colleague who also been around
the block and said, 'yeah we tried all that in the 90's, it didn't really make a difference' (vs.
the standard approach of using multiple regression for credit scoring), and he said to me, 'yeah
we tried that at my bank too, same result'
One aspect you didn't cover, that I think may be more important than fighting off regulations
(although that plays a role, I'm sure) is that I think execs are looking to get a piece of the
silicon valley, techland infinite money-pile. They see Tesla worth more than Ford and they dream
of where their stock price (and their stock options!) might go if they were thought of as tech
companies instead of boring old banks.
And part of it is fear. They are afraid of being the next Sears or local taxi company or whoever
getting disrupted by the infinite silicon valley money-pile, either by the startups that can burn
billions of dollars buying market share or by the big players who can leverage their entrenched
monopoly positions in their core markets to spend billions trying to take over any market they
feel like.
Wells Fargo tried that where they made account creation essentially click-bait for their workers.
It worked for a while until it didn't. It turned out that their account creation approach was
just a retread of the 1999 dot.com model, so they really were a tech start-up after all.
The issue is that the banks have no incentive to address the 5 issues that you raised. They
are a rent seeking cartel that does not care about the well being of the general populace at all.
They certainly are not tech start-ups. I get the impression that most people think that tech
startups are God, but in reality there are many bad start-ups too.
Basically, their money is made screwing the general public over at this point. That's sad to
say, but it is not far from the truth. What we need is a public bank and/or larger credit unions
that can offer all the financial services of a big bank.
Manhattan Beach-based PeerStreet closed out 2016 with a bang, raising a $15 million Series
A anchored by strong growth over the course of the year. The company developed a crowdfunding
platform that gives real estate investors access to high-yielding loans, with individual investments
starting from as low as $1,000.
Many of the examples cited apply (equally) to my former employer, Barclays. Having been shafted
by shysters from Wall Street, the bank jumped into the frying pan of (pseudo-)techies (often from
a particular part of the world). My current employer, the German twin of Barclays, is just the
same as the blue eagle.
There is an older abomination, known as outcomes based education, which was a scheme to destroy
the syllabus, while keeping teachers too busy with paperwork (recording "outcomes") to preserve
copies of the syllabus or properly teach.
It started in USA, was rejected there, got foisted on
South Africa and Australia, got rejected by 2008 in RSA, not sure when in Australia, then got
foisted on Canada, although opposition is building.
Seeing that high school teachers can see through
it and opposition precedes it, the OBE clowns changed tack!
Now Engineering colleges in North America
must follow this tomfoolery if they want to retain accreditation.
"... Common core math is indeed an abomination. It nearly destroyed my son's interest in math. I'm teaching him old school math. Of course, I am also supplementing his history lessons with alternative analyses and with a more comprehensive range of topics. ..."
"... Another thing – most teachers of common core math at my son's public school do not understand it themselves. I noted errors in homework assignments which only compounded the confusion among the students. ..."
"... One more thing – they are expected to learn from online videos and sloppily prepared study sheets – not a real math book. The school system is trying to make education paperless. This, to me, stunts the critical skills of eye-hand coordination, the ability to express abstract concept visually (e.g. making good sketches of ideas), etc. For example, mechanical drafting skills with the associated ability to visualize have been replaced by learning how to manipulate software. ..."
"... Perhaps these are cost-cutting measures but the results is that the US public education system, from my experience, is in free fall. ..."
Common core math is indeed an abomination. It nearly destroyed my son's interest in math. I'm
teaching him old school math. Of course, I am also supplementing his history lessons with
alternative analyses and with a more comprehensive range of topics.
Another thing – most teachers of common core math at my son's public school do not
understand it themselves. I noted errors in homework assignments which only compounded the
confusion among the students.
One more thing – they are expected to learn from online videos and sloppily prepared
study sheets – not a real math book. The school system is trying to make education
paperless. This, to me, stunts the critical skills of eye-hand coordination, the ability to
express abstract concept visually (e.g. making good sketches of ideas), etc. For example,
mechanical drafting skills with the associated ability to visualize have been replaced by
learning how to manipulate software.
Perhaps these are cost-cutting measures but the results is that the US public education
system, from my experience, is in free fall.
Here is a tin-foil hat theory based on the linked article. If Bill Gates is promoting a
method of education that stunts learning among the masses while sending his own kids to
private school that does not use the same method, could this be a way help to create a
society of dysfunctional masses ruled by a well-trained elites?
When it comes to Math, I think the traditional textbook approach is the best.
For History and the social sciences, though, I would recommend replacing big textbooks
with individual monographs and other study materials focusing on specialized themes.
Reason being: For Math, there is a standard (finite) set of facts and techniques that need
to be mastered at the school level; whereas there is no such thing as a "standard" or finite
sets of historical facts.
Somebody else suggested they are trying to prepare kids to become programmers of digital
computers (like Bill Gates started out).
But that doesn't make any sense either, because digital computers do not use this method to
subtract. Instead, they use a method called "2's complement addition".
Computers do use binary arithmetic, but for a human to do so, it involves converting from
base 10 to base 2 and then subtracting. In order to convert from base 10 to base 2, you have
to follow a step-by-step procedure which involves the remainder.
to the image given in the ZH article of the new subtraction method being taught:
You can see there is some similarity in the thought process, "carrying" the remainder
forward is the main lesson being taught.
marknesop
says:
July 16, 2017 at 9:55 am
That is just bizarre. One commenter suggested the methods might be geared
toward more complex problems where numbers do not represent real things,
but concepts; but I just can't see that, either. But then, I've never
been good at math and was always afraid of it. Whatever the case, I would
have dropped out of school in Grade Three if I'd had to learn this way.
It makes math problems ten times more complicated than they need to be,
and every time you introduce another step you introduce another
possibility of making a mistake.
Reply
likbez
says:
July 16, 2017 at 9:06 pm
Very true ! I am pretty good in math but this is still too much
artificially introduced complexity for me too. Still it would be a
perfect way to work with roman numbers. And that's BTW why Arabic
notation is so much superior.
In a new book, a Brookings scholar argues that the upper-middle class has enriched itself
and harmed economic mobility.
There's a certain type of financial confessional that has had a way of going viral in the post-recession
era. The University of Chicago law professor complaining his family was barely keeping their heads
above water on
$250,000 a year . This hypothetical family of three in San Francisco making $200,000,
enjoying vacations to Maui, and living hand-to-mouth. This real New York couple making six figures
and merely "
scraping by ."
In all of these viral posts, denizens of the upper-middle class were attempting to make the case
for their middle class-ness. Taxes are expensive. Cities are expensive. Tuition is expensive. Children
are expensive. Travel is expensive. Tens of thousands of dollars a month evaporate like cold champagne
spilled on a hot lanai, they argue. And the 20 percent are not the one percent.
A great, short book by Richard V. Reeves of the Brookings Institution helps to flesh out why these
stories provoke such rage. In Dream Hoarders
, released this week, Reeves agrees that the 20 percent are not the one percent: The higher you go
up the income or wealth distribution, the bigger the gains made in the past three or four decades.
Still, the top quintile of earners-those making more than roughly $112,000 a year-have been big beneficiaries
of the country's growth. To make matters worse, this group of Americans engages in a variety of practices
that don't just help their families, but harm the other 80 percent of Americans.
"I am not suggesting that the top one percent should be left alone. They need to pay more tax,
perhaps much more," Reeves writes. "But if we are serious about narrowing the gap between 'the rich'
and everybody else, we need a broader conception of what it means to be rich."
The book traces the way that the upper-middle class has pulled away from the middle class and
the poor on five dimensions: income and wealth, educational attainment, family structure, geography,
and health and longevity. The top 20 percent of earners might not have seen the kinds of income gains
made by the top one percent and America's billionaires. Still, their wage and investment increases
have proven sizable. They dominate the country's top colleges, sequester themselves in wealthy neighborhoods
with excellent public schools and public services, and enjoy healthy bodies and long lives. "It would
be an exaggeration to say that the upper-middle class is full of gluten-avoiding, normal-BMI joggers
who are only marginally more likely to smoke a cigarette than to hit their children," Reeves writes.
"But it would be just that-an exaggeration, not a fiction."
They then pass those advantages onto their children, with parents placing a "glass floor" under
their kids. They ensure they grow up in nice zip codes, provide social connections that make a difference
when entering the labor force, help with internships, aid with tuition and home-buying, and schmooze
with college admissions officers. All the while, they support policies and practices that protect
their economic position and prevent poorer kids from climbing the income ladder: legacy admissions,
the preferential tax treatment of investment income, 529 college savings plans, exclusionary zoning,
occupational licensing, and restrictions on the immigration of white-collar professionals.
As a result, America is becoming a class-based society, more like fin-de-siècle England than most
would care to admit, Reeves argues. Higher income kids stay up at the sticky top of the income distribution.
Lower income kids stay down at the bottom. The one percent have well and truly trounced the 99 percent,
but the 20 percent have done their part to immiserate the 80 percent, as well-an arguably more relevant
but less recognized class distinction.
Why more relevant? In part because the 20 percent are so much bigger than the one percent. If
you are going to raise a considerable amount of new income-tax revenue to finance social programs,
as many Democrats want to do, dinging the top one percent won't cut it: They are a lot richer, but
a lot fewer in number. And if you are going to provide more opportunities in good neighborhoods,
public schools, colleges, internship programs, and labor markets to lower-income families, it is
the 20 percent that are going to have to give something up.
Reeves offers a host of policy changes that might make a considerable difference: better access
to contraception, increasing building in cities and suburbs, barring legacy admissions to colleges,
curbing tax expenditures that benefit families with big homes and capital gains. Still, given the
scale of the problem, I wondered whether other, bigger solutions might be necessary as well: a universal
child allowance to reduce the poverty rate among kids, as the Century Foundation
has proposed
, say, or baby bonds to help eliminate the black-white
wealth gap fostered by decades of racist and exclusionary government policy, as Darrick Hamilton
has suggested. (So often, the upper-middle class insulating and enriching itself at the expense of
the working class has meant white families doing so at the expense of black families-a point I thought
underplayed in Reeves' telling.)
Yet, as Reeves notes, "sensible policy is not always easy politics." Expanding opportunity and
improving fairness would require the upper-middle class to vote for higher taxes, to let others move
in, and to share in the wealth. Prying Harvard admission letters and the mortgage interest deductions
out of the hands of bureaucrats in Bethesda, sales executives in Minnetonka, and lawyers in Louisville
is not going to be easy.
Members of the upper-middle class, as those viral stories show and Reeves writes, love to think
of themselves as members of the middle class, not as the rich. They love to think of themselves as
hard workers who played fair and won what they deserved, rather than as people who were born on third
and think they hit a triple. They hate to hear that the government policies they support as sensible
might be torching social mobility and entrenching an elite. That elite is them.
"McDonald's has repeatedly said that adding kiosks won't result in mass layoffs, but will instead
move some cashiers to other parts of the restaurant where it's adding new jobs, such as table service.
The burger chain reiterated that position again on Friday."
Is McDonald's denial believable? What would you expect the company to say?
McDonald's has to deny the story or it might have a hiring problem, a morale problem, and other
problems.
"Our CEO, Steve Easterbrook, has said on many occasions that self-order kiosks in McDonald's restaurants
are not a labor replacement," a spokeswoman told Business Insider. "They provide an opportunity to
transition back-of-the-house positions to more customer service roles such as concierges and table
service where they are able to truly engage with guests and enhance the dining experience."
Move cashiers to table service? Really?
Yeah, right.
An interesting political rule from the British sitcom "Yes, Minister" is to "never believe anything
until it's officially denied".
Will Humans Be Necessary?
When someone can be replaced by a robot, how can the push for $15 be justified?
Let's start with jobs likely to be eliminated, starting with the present and with those lower-level
jobs.
Already, don't you prefer a ATM to a teller, self-checkout to the supermarket checker, drive-through
tolls rather than stop for the toll-taker, automated airline check-in rather than waiting for a clerk,
shopping on Amazon rather than fighting traffic, parking, and the check-out experience with a live
clerk, assuming the store has what you want in your size? Indeed,
malls are
closing while online retailers led by Amazon
are growing.
As minimum wage and mandated benefits rise,
fast-food restaurants especially are accelerating use of, for example, order-taking kiosks, which
McDonald's
is rolling out in 2,500 stores, robotic burger flippers and fry cooks, even
pizza, ramen and sushi makers . Even that fail-safe job, barista, is at-risk, Bosch now makes
an automated barista . Mid-range
restaurants such as Olive Garden, Outback, and Applebee are
replacing waiters
with tabletop tablets . Will you really miss having your conversation interrupted by a waiter
hawking hors de oeuvres and expecting a 15+% tip? If you owned a fast-food franchise, mighn't you
be looking to replace people with automated solutions? Can it really be long until there are completely
automated fast-food and even mid-range restaurants?
BlackRock, the world's largest fund company
has replaced seven of its 53 analysts with AI-driven stock-picking.
The remaining jobs
In such a world, how can a human justify asking to be paid to work?
Four scenarios
The range of scenarios would seem circumscribed by these. How likely do you think each of these
are?
Continue on the current path: The world continues to slowly make progress, e.g., birth rates
declining in developing nations, slowed global warming, more education and health care. Those positives
would be mitigated by declining jobs, more
concentration of wealth.
World socialism.
Mass population reduction, for example, by nuclear war, pandemic, or, per Clive Cussler, highly
communicable biovirus simultaneously put into the water supply of a half-dozen cruise ships?
A world run by machines and the few people they deem worthy.
Here is a debate between an optimistic and a
pessimist on the future
of the world.
The truth may well be something we can't even envision. After all, he who lives by the crystal
ball usually eats broken glass.
Note that Psychology Today author Marty Nemko did not ask about $15. He wonders if pay for some
jobs is worth anything at all.
When all the jobs are taken over by machines there won't be anybody with money left to buy
or pay for anything at all. WTF then? A world of no work is a world of little or no income. The
ones who survive are the ones who know how to provide for themselves without the use of currency
(barter, trade, farming, etc ).
Before that happens, these machines will be heavily vandalized. It's all part of the inevitable
ISEP problem (It's Someone Else's Problem).
For one firm to do this, it's understandable, but for an entire sector, they're ripping their
face off and everyone else's. But those making the decisions are unwilling or unable to care about
even their long-term positions. To start, they largely exist to kick the can down the road until
... you guess it! ... it's ISEP. It's a problem for the next round of overcompensated intellectual-light
and morally-bankrupt executives.
But don't think "the market" is going to fix that. Markets never do. Markets have failures
all the time yet people still pretend like they have this inherent magical property. Markets would
be fine ... in a human-free world ... because anything a sociopath touches will be turned to sh*t.
And power, be it government or "market" will attract these people. Any ideology can work, but
only until the sociopaths game the sh*t out of the system and destroy it from the inside.
Now, the less stupid people in these positions will realize the ISEP problem but know full
well the government of the future can be extorted into, effectively, bailing them out somehow.
Think of the "mandate" of ObamaCare and realize "thinkers" at the Heritage Institute saw this
down the road back in the early 1980s. Right now, I'm starting to wonder if this whole "livable
wage" is just a proxy bailout on behalf of large actors like McDonald's (who can no longer expect
growth as the incomes and costs at the bottom shrink in the former and explode in the latter).
That leadership knows full well that even if they took a leadership position on living wages,
they'll be expected to be the only ones. The sociopaths at the other firms will think ... you
got it! ... ISEP. Those firms can continue on f**king their employees while a large firm like
McDonald's is expected to shoulder the entire burden or drive them into bankruptcy. In either
of those cases, the status quo remains across the industry.
FIRE-HC-E (Financial, Insurance, Real Estate, Healthcare, Education; the major rackets of ourlives)
is destroying the markets for not just McDonald's employees, but also markets for other brick-and-mortar
companies like Apple or Home Depot. This is why I focus heavily on our poor leadership because
the leadership of the industrial sectors as a whole just sat back and watched as the likes of
Wall Street slowly eroded the bedrock of the economy.
The author, Mike Shedlock, links to a POS article in Psychology Today, authored by Marty Nemko
Ph.D. Did anyone else read that? It says under An
optimistic vision
"Longer term, it's even possible that we'll be able to accomplish more of what we want by using
gene therapy or
a chip embedded in our brain -Research to make that happen is already being funded by the
federal government." Ah, no thank you!
Mike also asks " how can the push for $15 be justified? And links to the Psycholgy Today article
which say "we may also need a guaranteed basic income paid heavily by successful corporations
and wealthy individuals". Which view do you support Mike?
Psychology Today article also states "What about journalism? Even in major media outlets, many
journalism jobs have already been lost to the armies of people willing to write for free. In addition,
software such as Quill can replace some human journalists" Maybe in this case, that's not a bad
thing.
Crocodile tears of WaPO staff... Who fully supported implementation of Washington consensus that
robbed the nations in favor of international companies... this was a new mass scale economic rape of
the Western countries and it was especially brutal in xUSSR area.
Nobel-winning economist Angus Deaton argues against giving aid to poor countries
It sounds kind of crazy to say that foreign aid often hurts, rather than helps, poor people
in poor countries. Yet that is what Angus Deaton, the newest
winner of the Nobel Prize in economics , has argued.
Deaton, an economist at Princeton University who studied poverty in India and South Africa
and spent decades working at the World Bank, won his prize for studying how the poor decide to
save or spend money. But his ideas about foreign aid are particularly provocative. Deaton argues
that, by trying to help poor people in developing countries, the rich world may actually be corrupting
those nations' governments and slowing their growth. According to Deaton, and the economists who
agree with him, much of the
$135 billion that the world's most developed countries spent on official aid in 2014 may not
have ended up helping the poor.
Angus Deaton (LARRY LEVANTI/AFP/Getty Images)
The idea of wealthier countries giving away aid blossomed in the late 1960s, as the first humanitarian
crises reached mass audiences on television. Americans watched through their TV sets as
children starved to death in Biafra, an oil-rich area that had seceded from Nigeria and was now
being blockaded by the Nigerian government, as Philip Gourevitch
recalled
in a 2010 story in the New Yorker. Protesters
called on
the Nixon administration for action so loudly that they ended up galvanizing the largest nonmilitary
airlift the world had ever seen. Only a quarter-century after Auschwitz, humanitarian aid seemed
to offer the world a new hope for fighting evil without fighting a war.
There was a strong economic and political argument for helping poor countries, too. In the
mid-20th century, economists widely believed that the key to triggering growth -- whether in an
already well-off country or one hoping to get richer -- was pumping money into a country's factories,
roads and other infrastructure. So in the hopes of spreading the Western model of democracy and
market-based economies, the United States and Western European powers encouraged foreign aid to
smaller and poorer countries that could fall under the influence of the Soviet Union and China.
The level of foreign aid distributed around the world
soared from the 1960s
, peaking at the end of the Cold War, then dipping before rising again.
Live
Aid music concerts raised public awareness about challenges like starvation in Africa, while
the United States launched major,
multibillion-dollar aid initiatives . And the World Bank and advocates of aid aggressively
seized on research that claimed that foreign aid led to economic development.
Deaton wasn't the first economist to challenge these assumptions, but over the past two decades
his arguments began to receive a great deal of attention. And he made them with perhaps a better
understanding of the data than anyone had before. Deaton's skepticism about the benefits of foreign
aid grew out of his research, which involved looking in detail at households in the developing
world, where he could see the effects of foreign aid intervention.
"I think his understanding of how the world worked at the micro level made him extremely suspicious
of these get-rich-quick schemes that some people peddled at the development level," says Daron
Acemoglu, an economist at MIT.
The data suggested that the claims of the aid community were sometimes not borne out. Even
as the level of foreign aid into Africa soared through the 1980s and 1990s, African economies
were doing worse than ever, as the chart below, from
a paper
by economist Bill Easterly of New York University, shows.
William Easterly, "Can Foreign Aid Buy Growth?"
The effect wasn't limited to Africa. Many economists were noticing that an influx of foreign aid
did not seem to produce economic growth in countries around the world. Rather, lots of foreign aid
flowing into a country tended to be correlated with lower economic growth, as this chart from a paper
by Arvind Subramanian and Raghuram
Rajan shows.
The countries that receive less aid, those on the left-hand side of the chart, tend to have higher
growth -- while those that receive more aid, on the right-hand side, have lower growth.
Raghuram G. Rajan and Arvind Subramanian, "Aid and Growth: What Does the Cross-Country Evidence Really
Show?"
Why was this happening? The answer wasn't immediately clear, but Deaton and other economists argued
that it had to do with how foreign money changed the relationship between a government and its people.
Think of it this way: In order to have the funding to run a country, a government needs to collect
taxes from its people. Since the people ultimately hold the purse strings, they have a certain amount
of control over their government. If leaders don't deliver the basic services they promise, the people
have the power to cut them off.
Deaton argued that foreign aid can weaken this relationship, leaving a government less accountable
to its people, the congress or parliament, and the courts.
"My critique of aid has been more to do with countries where they get an enormous amount of aid
relative to everything else that goes on in that country," Deaton said in an interview with Wonkblog.
"For instance, most governments depend on their people for taxes in order to run themselves and provide
services to their people. Governments that get all their money from aid don't have that at all, and
I think of that as very corrosive."
It might seem odd that having more money would not help a poor country. Yet economists have long
observed that countries that have an abundance of wealth from natural resources, like oil or diamonds,
tend to be more unequal, less developed and more impoverished, as the chart below shows. Countries
at the left-hand side of the chart have fewer fuels, ores and metals and higher growth, while those
at the right-hand side have more natural resource wealth, yet slower growth. Economists postulate
that this "natural resource curse" happens for a variety of reasons, but one is that such wealth
can strengthen and corrupt a government.
Like revenue from oil or diamonds, wealth from foreign aid can be a corrupting influence on weak
governments, "turning what should be beneficial political institutions into toxic ones," Deaton writes
in his book "The Great Escape: Health, Wealth, and the Origins of Inequality." This wealth can make
governments more despotic, and it can also increase the risk of civil war, since there is less power
sharing, as well as a lucrative prize worth fighting for.
Deaton and his supporters offer dozens of examples of humanitarian aid being used to support despotic
regimes and compounding misery, including in Zaire, Rwanda, Ethiopia, Somalia, Biafra, and the Khmer
Rouge on the border of Cambodia and Thailand. Citing Africa researcher Alex de Waal, Deaton writes
that "aid can only reach the victims of war by paying off the warlords, and sometimes extending the
war."
He also gives plenty of examples in which the United States gives aid "for 'us,' not for 'them'"
– to support our strategic allies, our commercial interests or our moral or political beliefs, rather
than the interests of the local people.
The United States gave aid to Ethiopia for decades under then-President Meles Zenawi Asres, because
he opposed Islamic fundamentalism and Ethiopia was so poor. Never mind that Asres was "one of the
most repressive and autocratic dictators in Africa," Deaton writes.
According to Deaton, "the award for sheer creativity" goes to Maaouya Ould Sid'Ahmed Taya, president
of Mauritania from 1984 to 2005. Western countries stopped giving aid to Taya after his government
became too politically repressive, but he managed to get the taps turned on again by becoming one
of the few Arab nations to recognize Israel.
Some might argue for bypassing corrupt governments altogether and distributing food or funding
directly among the people. Deaton acknowledges that, in some cases, this might be worth it to save
lives. But one problem with this approach is that it's difficult: To get to the powerless, you often
have to go through the powerful. Another issue, is that it undermines what people in developing countries
need most -- "an effective government that works with them for today and tomorrow,"
he writes .
The old calculus of foreign aid was that poor countries were merely suffering from a lack of money.
But these days, many economists question this assumption, arguing that development has more to do
with the strength of a country's institutions – political and social systems that are developed through
the interplay of a government and its people.
There are lot of places around the world that lack good roads, clean water and good hospitals,
says MIT's Acemoglu: "Why do these places exist? If you look at it, you quickly disabuse yourself
of the notion that they exist because it's impossible for the state to provide services there." What
these countries need even more than money is effective governance, something that foreign aid can
undermine, the thinking goes.
Some people believe that Deaton's critique of foreign aid goes too far. There are better and worse
ways to distribute foreign aid, they say. Some project-based approaches -- such as financing a local
business, building a well, or providing uniforms so that girls can go to school -- have been very
successful in helping local communities. In the last decade, researchers have tried to integrate
these lessons from economists and argue for more effective aid practices.
Many people believe that the aid community needs more scrutiny to determine which practices have
been effective and which have not. Economists such as Abhijit Banerjee and Esther Duflo, for example,
argue for creating
randomized control trials that allow researchers to carefully examine the development effects of
different types of projects -- for example, following microcredit as it is extended to people in
poor countries.
These methods have again led to a swell in optimism in professional circles about foreign aid
efforts. And again, Deaton is playing the skeptic.
While Deaton agrees that many development projects are successful, he's
critical of claims that these projects can be replicated elsewhere or on a larger scale. "The
trouble is that 'what works' is a highly contingent concept," he said in an interview. "If it works
in the highlands of Kenya, there's no reason to believe it will work in India, or that it will work
in Princeton, New Jersey."
The success of a local project, like microfinancing, also depends on numerous other local factors,
which are harder for researchers to isolate. Saying that these randomized control trials prove that
certain projects cause growth or development is like saying that flour causes cake, Deaton writes
in his book. "Flour 'causes' cakes, in the sense that cakes made without flour do worse than cakes
made with flour – and we can do any number of experiments to demonstrate it – but flour will not
work without a rising agent, eggs, and butter – the helping factors that are needed for the flour
to 'cause' the cake."
Deaton's critiques of foreign aid stem from his natural skepticism of how people use -- and abuse
-- economic data to advance their arguments. The science of measuring economic effects is much more
important, much harder and more controversial than we usually think, he told The Post.
Acemoglu said of Deaton: "He's challenging, and he's sharp, and he's extremely critical of things
he thinks are shoddy and things that are over-claiming. And I think the foreign aid area, that policy
arena, really riled him up because it was so lacking in rigor but also so grandiose in its claims."
Deaton doesn't argue against all types of foreign aid. In particular, he believes that certain
types of health aid – offering vaccinations, or developing cheap and effective drugs to treat malaria,
for example -- have been hugely beneficial to developing countries.
But mostly, he said, the rich world needs to think about "what can we do that would make lives
better for millions of poor people around the world without getting into their economies in the way
that we're doing by giving huge sums of money to their governments." Overall, he argues that we should
focus on doing less harm in the developing world, like selling fewer weapons to despots, or ensuring
that developing countries get a fair deal in trade agreements, and aren't harmed by U.S. foreign
policy decisions.
Deaton also believes that our attitude toward foreign aid – that developed countries ought to
swoop in and save everyone else – is condescending and suspiciously similar to the ideas of colonialism.
The rhetoric of colonialism, too, "was all about helping people, albeit about bringing civilization
and enlightenment to people whose humanity was far from fully recognized," he has written.
Instead, many of the positive things that are happening in Africa – the huge adoption in cell
phones over the past decade, for example – are totally homegrown. He points out that, while the world
has made huge strides in reducing poverty in recent decades, almost none of this has been due to
aid. Most has been due to development in countries like China, which have received very little aid
as a proportion of gross domestic product and have "had to work it out for themselves."
Ultimately, Deaton argues that we should stand aside and let poorer countries develop in their
own ways. "Who put us in charge?" he asks.
Thousands of workers face unemployment as retailers
struggle to adapt to online shopping. But even as
e-commerce grows, it isn't absorbing these workers.
JOHNSTOWN, Pa. - Dawn Nasewicz comes from a family of
steelworkers, with jobs that once dominated the local
economy. She found her niche in retail.
She manages a store, Ooh La La, that sells prom dresses
and embroidered jeans at a local mall. But just as the jobs
making automobile springs and rail anchors disappeared, local
retail jobs are now vanishing.
"I need my income," said Ms. Nasewicz, who was told that
her store will close as early as August. "I'm 53. I have no
idea what I'm going to do."
Ms. Nasewicz is another retail casualty, one of tens of
thousands of workers facing unemployment nationwide as the
industry struggles to adapt to online shopping.
Continue reading the main story
Photo
A sporting goods store in a Johnstown, Pa., mall is having a
going-out-of-business sale. Credit George Etheredge for The
New York Times
Small cities in the Midwest and Northeast are particularly
vulnerable. When major industries left town, retail accounted
for a growing share of the job market in places like
Johnstown, Decatur, Ill., and Saginaw, Mich. Now, the work
force is getting hit a second time, and there is little to
fall back on.
Moreover, while stores in these places are shedding jobs
because of e-commerce, e-commerce isn't absorbing these
workers. Growth in e-commerce jobs like marketing and
engineering, while strong, is clustered around larger cities
far away. Rural counties and small metropolitan areas account
for about 23 percent of traditional American retail
employment, but they are home to just 13 percent of
e-commerce positions.
E-commerce has also fostered a boom in other industries,
including warehouses. But most of those jobs are being
created in larger metropolitan areas, an analysis of Census
Bureau business data shows.
Almost all customer fulfillment centers run by the online
shopping behemoth Amazon are in metropolitan areas with more
than 250,000 people - close to the bulk of its customers -
according to a list of locations compiled by MWPVL
International, a logistics consulting firm. An Amazon
spokeswoman noted, however, that the company had recently
opened warehouses in two distressed cities in larger
metropolitan areas, Fall River, Mass., and Joliet, Ill.
The Johnstown metropolitan area, in western Pennsylvania,
has lost 19 percent of its retail jobs since 2001, and the
future is uncertain. At least a dozen of Ooh La La's
neighbors at the mall have closed, and a "Going out of
business" banner hangs across the front of the sporting goods
store Gander Mountain.
"Every time you lose a corner store, every time you lose a
restaurant, every time you lose a small clothing store, it
detracts from the quality of life, as well as the job loss,"
said John McGrath, a professor of management at the
University of Pittsburgh Johnstown.
This city is perhaps still best known for a flood that
ravaged it nearly 130 years ago. After rebuilding, Johnstown
eventually became prosperous from its steel and offered a
clear path to the middle class. For generations, people could
walk out of high school and into a steady factory job.
But today, the area bears the marks of a struggling town.
Its population has dwindled, and addiction treatment centers
and Dollar Generals stand in place of corner grocers and
department stores like Glosser Brothers, once owned by the
family of Stephen Miller, President Trump's speechwriter and
a policy adviser.
When Mr. Trump spoke about "rusted-out factories scattered
like tombstones across the landscape of our nation" in his
Inaugural Address, people like Donald Bonk, a local economic
development consultant, assumed that Mr. Miller - who grew up
in California but spent summers in Johnstown - was writing
about the old Bethlehem Steel buildings that still hug long
stretches of the Little Conemaugh River.
The county voted overwhelmingly for Mr. Trump, eight years
after it helped to elect Barack Obama. (It also voted for
Mitt Romney in 2012, but not by as wide a margin.)
Here and in similar towns, when the factory jobs left, a
greater share of the work force ended up in retail.
Sometimes that meant big-box retailers like Walmart, which
were often blamed for destroying mom-and-pop stores but at
least created other jobs for residents. The damage from
e-commerce plays out differently. Digital firms may attract
customers from small towns, but they are unlikely to employ
them.
Some remaining retailers are straining for solutions. ...
"... What's needed is not the arbitrary adoption of UBI, but a conversation about what a welfare state is for. In their incendiary book Inventing the Future, the authors Alex Williams and Nick Srnicek argue for UBI but link it to three other demands: collectively controlled automation, a reduction in the working week, and a diminution of the work ethic. Williams and Srnicek believe that without these other provisions, UBI could essentially act as an excuse to get rid of the welfare state. ..."
"... What's needed is not the arbitrary adoption of UBI, but an entirely different conversation about what a welfare state is for. As David Lammy MP said, after the Grenfell Tower disaster: "This is about whether the welfare state is just about schools and hospitals or whether it is about a safety net." The conversation, in light of UBI, could go even further: it's possible for the welfare state not just to act as a safety net, but as a tool for all of us to do less work and spend more time with our loved ones, pursuing personal interests or engaging in our communities. ..."
Lane Kenworthy's article shows how America is already great, with many more people working
in poverty than in the UK, Ireland or Australia. Maybe the robots stole better paying jobs? Maybe
they need more education and to skill up?
Love the idea of a universal basic income? Be careful what you wish for
Ellie Mae O'Hagan
Friday 23 June 2017 10.36 EDT
Yes, UBI could be an important part of a radical agenda. But beware: its proponents include
neoliberals hostile to the very idea of the welfare state
For some time now, the radical left has been dipping its toes in the waters of universal basic
income (or unconditional basic income, depending on who you talk to). The idea is exactly as it
sounds: the government would give every citizen – working or not – a fixed sum of money every
week or month, with no strings attached. As time goes on, universal basic income (UBI) has gradually
been transitioning from the radical left into the mainstream: it's Green party policy, is picking
up steam among SNP and Labour MPs and has been advocated by commentators including this newspaper's
very own John Harris.
Supporters of the idea got a boost this week with the news that the Finnish government has
piloted the idea with 2,000 of its citizens with very positive results. Under the scheme, the
first of its kind in Europe, participants receive €560 (£473) every month for two years without
any requirements to fill in forms or actively seek work. If anyone who receives the payment finds
work, their UBI continues. Many participants have reported "decreased stress, greater incentives
to find work and more time to pursue business ideas." In March, Ontario in Canada started trialling
a similar scheme.
Given that UBI necessarily promotes universalism and is being pursued by liberal governments
rather than overtly rightwing ones, it's tempting to view it as an inherently leftwing conceit.
In January, MEPs voted to consider UBI as a solution to the mass unemployment that might result
from robots taking over manual jobs.
From this perspective, UBI could be rolled out as a distinctly rightwing initiative. In fact
it does bear some similarity to the government's shambolic universal credit scheme, which replaces
a number of benefits with a one-off, lower, monthly payment (though it goes only to people already
on certain benefits, of course). In the hands of the right, UBI could easily be seen as a kind
of universal credit for all, undermining the entire benefits system and providing justification
for paying the poorest a poverty income.
In fact, can you imagine what UBI would be like if it were rolled out by this government, which
only yesterday promised to fight a ruling describing the benefits cap as inflicting "real misery
to no good purpose"?
Despite the fact that the families who brought a case against the government had children too
young to qualify for free childcare, the Department for Work and Pensions still perversely insisted
that "the benefit cap incentivises work". It's not hard to imagine UBI being administered by the
likes of A4e (now sold and renamed PeoplePlus), which carried out back-to-work training for the
government, and saw six of its employees receive jail sentences for defrauding the government
of £300,000. UBI cannot be a progressive initiative as long as the people with the power to implement
it are hostile to the welfare state as a whole.
What's needed is not the arbitrary adoption of UBI, but a conversation about what a welfare
state is for. In their incendiary book Inventing the Future, the authors Alex Williams and Nick
Srnicek argue for UBI but link it to three other demands: collectively controlled automation,
a reduction in the working week, and a diminution of the work ethic. Williams and Srnicek believe
that without these other provisions, UBI could essentially act as an excuse to get rid of the
welfare state.
What's needed is not the arbitrary adoption of UBI, but an entirely different conversation
about what a welfare state is for. As David Lammy MP said, after the Grenfell Tower disaster:
"This is about whether the welfare state is just about schools and hospitals or whether it is
about a safety net." The conversation, in light of UBI, could go even further: it's possible for
the welfare state not just to act as a safety net, but as a tool for all of us to do less work
and spend more time with our loved ones, pursuing personal interests or engaging in our communities.
UBI has this revolutionary potential – but not if it is simply parachuted into a political
economy that has been pursuing punitive welfare policies for the last 30 years.
On everything from climate change and overpopulation to yawning inequality and mass automation,
modern western economies face unprecedented challenges. These conditions are frightening but they
also open up the possibility of the kind of radical policies we haven't seen since the postwar
period. UBI could be the start of this debate, but it must not be the end.
> "One of the reasons I support UBI is that it
refocuses political discussions to some of the fundamental
issues, as this article points out."
I agree.
UBI might probably be the most viable first step of
Trump's MAGA. But he betrayed his electorate. Similarly it would be a good step in Obama's "change we
can believe in" which never materialized.
The level of automation that currently exists makes UBI
quite a possibility.
But...
The problem is the key idea of neoliberalism is
"socialism for rich and feudalism and/or plantation
slavery for poor."
So neither Republicans, nor Clinton Democrats are
interested in UBI. It is anathema for neoliberals.
Over 33K people in US died of opiates overdoses in 2015 according to the Centers for Disease Control
and Prevention.
Not only unemployed abuse opioids, but more and more college students and recent graduates
are abusing the opioids as well, according to a survey of 1200 college aged adults commissioned
the same year by Christie foundation.
Federal law does not require colleges to report drug death unless they are deemed criminal.
But fatal overdoses have been rising at schools nationwide underscoring and horrifying reality
of for administrators: in addition to binge drinking and marijuana, they have another crisis firmly
entrenched on campus.
Now losing 30K people in one year is like small scale civil war (like the one they have in
Ukraine) and in a way it is: war of wealthy and medical industrial complex against those in difficult
circumstances, with dreams crashed and, especially, unemployed.
CHICAGO (AP) - Accidental overdoses aren't the only deadly risk from using powerful prescription
painkillers - the drugs may also contribute to heart-related deaths and other fatalities, new
research suggests.
Among more than 45,000 patients in the study, those using opioid painkillers had a 64 percent
higher risk of dying within six months of starting treatment compared to patients taking other
prescription pain medicine. Unintentional overdoses accounted for about 18 percent of the deaths
among opioid users, versus 8 percent of the other patients.
"As bad as people think the problem of opioid use is, it's probably worse," said Wayne Ray,
the lead author and a health policy professor at Vanderbilt University's medical school. "They
should be a last resort and particular care should be exercised for patients who are at cardiovascular
risk."
His caution echoes recent advice from the Centers for Disease Control and Prevention, trying
to stem the nation's opioid epidemic. The problem includes abuse of street drugs like heroin and
overuse of prescription opioids such as hydrocodone, codeine and morphine.
The drugs can slow breathing and can worsen disrupted breathing that occurs with sleep apnea,
potentially leading to irregular heartbeats, heart attacks or sudden death, the study authors
said.
In 2014, there were more than 14,000 fatal overdoses linked with the painkillers in the U.S.
The study suggests even more have died from causes linked with the drugs, and bolster evidence
in previous research linking them with heart problems.
The study involved more than 45,000 adult Medicaid patients in Tennessee from 1999 to 2012.
They were prescribed drugs for chronic pain not caused by cancer but from other ailments including
persistent backaches and arthritis.
Half received long-acting opioids including controlled-release oxycodone, methadone and fentanyl
skin patches. Fentanyl has been implicated in the April death of Prince, although whether the
singer was using a fentanyl patch, pills or other form of the drug hasn't been publicly revealed.
Long-acting opioids remain in the body longer. The study authors noted that the body's prolonged
exposure to the drugs may increase risks for toxic reactions.
The remaining study patients had prescriptions for non-opioid drugs sometimes used to treat
nerve pain, including gabapentin; or certain antidepressants also used for pain.
There were 185 deaths among opioid users, versus 87 among other patients. The researchers calculated
that for every 145 patients on an opioid drug, there was one excess death versus deaths among
those on other painkillers.
The two groups were similar in age, medical conditions, risks for heart problems and other
characteristics that could have contributed to the outcomes.
The results were published Tuesday in the Journal of the American Medical Association .
The study involved only Medicaid patients, who include low-income and disabled adults and who
are among groups disproportionately affected by opioid abuse.
Ray noted that the study excluded the sickest patients and those with any evidence of drug
abuse. He said similar results would likely be found in other groups.
Dr. Chad Brummett, director of pain research at the University of Michigan Health System, said
the study highlights risks from the drugs in a novel way and underscores why their use should
be limited.
"... Until elites stand down and stop the brutal squeeze , expect more after painful more of this. It's what happens when societies come apart. Unless elites (of both parties) stop the push for "profit before people," policies that dominate the whole of the Neoliberal Era , there are only two outcomes for a nation on this track, each worse than the other. There are only two directions for an increasingly chaotic state to go, chaotic collapse or sufficiently militarized "order" to entirely suppress it. ..."
"... Mes petits sous, mon petit cri de coeur. ..."
"... But the elite aren't going to stand down, whatever that might mean. The elite aren't really the "elite", they are owners and controllers of certain flows of economic activity. We need to call it what it is and actively organize against it. Publius's essay seems too passive at points, too passive voice. (Yes, it's a cry from the heart in a prophetic mode, and on that level, I'm with it.) ..."
"... American Psycho ..."
"... The college students I deal with have internalized a lot of this. In their minds, TINA is reality. Everything balances for the individual on a razor's edge of failure of will or knowledge or hacktivity. It's all personal, almost never collective - it's a failure toward parents or peers or, even more grandly, what success means in America. ..."
"... unions don't matter in our TINA. Corporations do. ..."
"... our system promotes specialists and disregards generalists this leads to a population of individualists who can't see the big picture. ..."
"... That social contract is hard to pin down and define – probably has different meanings to all of us, but you are right, it is breaking down. We no longer feel that our governments are working for us. ..."
"... Increasing population, decreasing resources, increasingly expensive remaining resources on a per unit basis, unresolved trashing of the environment and an political economy that forces people to do more with less all the time (productivity improvement is mandatory, not optional, to handle the exponential function) much pain will happen even if everyone is equal. ..."
"... "Social contract:" nice Enlightment construct, out of University by City. Not a real thing, just a very incomplete shorthand to attempt to fiddle the masses and give a name to meta-livability. ..."
"... Always with the "contract" meme, as if there are no more durable and substantive notions of how humans in small and large groups might organize and interact Or maybe the notion is the best that can be achieved? ..."
"... JTMcFee, you have provided the most important aspect to this mirage of 'social contract'. The "remedies" clearly available to lawless legislation rest outside the realm of a contract which has never existed. ..."
"... Unconscionable clauses are now separately initialed in an "I dare you to sue me" shaming gambit. Meanwhile the mythical Social Contract has been atomized into 7 1/2 billion personal contracts with unstated, shifting remedies wholly tied to the depths of pockets. ..."
"... Here in oh-so-individualistic Chicago, I have been noting the fraying for some time: It isn't just the massacres in the highly segregated black neighborhoods, some of which are now in terminal decline as the inhabitants, justifiably, flee. The typical Chicagoan wanders the streets connected to a phone, so as to avoid eye contact, all the while dressed in what look like castoffs. Meanwhile, Midwesterners, who tend to be heavy, are advertisements for the obesity epidemic: Yet obesity has a metaphorical meaning as the coat of lipids that a person wears to keep the world away. ..."
"... My middle / upper-middle neighborhood is covered with a layer of upper-middle trash: Think Starbucks cups and artisanal beer bottles. ..."
"... The class war continues, and the upper class has won. As commenter relstprof notes, any kind of concerted action is now nearly impossible. Instead of the term "social contract," I might substitute "solidarity." Is there solidarity? No, solidarity was destroyed as a policy of the Reagan administration, as well as by fantasies that Americans are individualistic, and here we are, 40 years later, dealing with the rubble of the Obama administration and the Trump administration. ..."
"... The trash bit has been linked in other countries to how much the general population views the public space/environment as a shared, common good. Thus, streets, parks and public space might be soiled by litter that nobody cares to put away in trash bins properly, while simultaneously the interior of houses/apartments, and attached gardens if any, are kept meticulously clean. ..."
"... The trash bit has been linked in other countries to how much the general population views the public space/environment as a shared, common good. ..."
"... There *is* no public space anymore. Every public good, every public space is now fair game for commercial exploitation. ..."
"... The importance of the end of solidarity – that is, of the almost-murderous impulses by the upper classes to destroy any kind of solidarity. ..."
"... "Conditions will only deteriorate for anyone not in the "1%", with no sight of improvement or relief." ..."
"... "Four Futures" ..."
"... Reminds me of that one quip I saw from a guy who, why he always had to have two pigs to eat up his garbage, said that if he had only one pig, it will eat only when it wants to, but if there were two pigs, each one would eat so the other pig won't get to it first. Our current economic system in a nutshell – pigs eating crap so deny it to others first. "Greed is good". ..."
"... Don't know that the two avenues Gaius mentioned are the only two roads our society can travel. In support of this view, I recall a visit to a secondary city in Russia for a few weeks in the early 1990s after the collapse of the USSR. Those were difficult times economically and psychologically for ordinary citizens of that country. Alcoholism was rampant, emotional illness and suicide rates among men of working age were high, mortality rates generally were rising sharply, and birth rates were falling. Yet the glue of common culture, sovereign currency, language, community, and thoughtful and educated citizens held despite corrupt political leadership, the rise of an oligarchic class, and the related emergence of organized criminal networks. There was also adequate food, and critical public infrastructure was maintained, keeping in mind this was shortly after the Chernobyl disaster. ..."
Yves here. I have been saying for some years that I did not think we would see a revolution, but
more and more individuals acting out violently. That's partly the result of how community and social
bonds have weakened as a result of neoliberalism but also because the officialdom has effective ways
of blocking protests. With the overwhelming majority of people using smartphones, they are constantly
surveilled. And the coordinated 17-city paramilitary crackdown on Occupy Wall Street shows how the
officialdom moved against non-violent protests. Police have gotten only more military surplus toys
since then, and crowd-dispersion technology like sound cannons only continues to advance. The only
way a rebellion could succeed would be for it to be truly mass scale (as in over a million people
in a single city) or by targeting crucial infrastructure.
By Gaius Publius
, a professional writer living on the West Coast of the United States and frequent contributor to
DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter
@Gaius_Publius ,
Tumblr and
Facebook . GP article archive
here . Originally published at
DownWithTyranny
"[T]he super-rich are absconding with our wealth, and the plague of inequality continues
to grow. An
analysis of
2016 data found that the poorest five deciles of the world population own about $410 billion
in total wealth. As of
June 8,
2017 , the world's richest five men owned over $400 billion in wealth. Thus, on average,
each man owns nearly as much as 750 million people."
-Paul Buchheit,
Alternet
"Congressman Steve Scalise, Three Others Shot at Alexandria, Virginia, Baseball Field"
-NBC News,
June 14, 2017
"4 killed, including gunman, in shooting at UPS facility in San Francisco"
-ABC7News,
June 14, 2017
"Seriously? Another multiple shooting? So many guns. So many nut-bars. So many angry
nut-bars with guns."
-MarianneW via
Twitter
"We live in a world where "multiple dead" in San Francisco shooting can't cut through
the news of another shooting in the same day."
-SamT via
Twitter
"If the rich are determined to extract the last drop of blood, expect the victims to
put up a fuss. And don't expect that fuss to be pretty. I'm not arguing for social war; I'm
arguing for justice and peace."
-
Yours truly
When the social contract breaks from above, it breaks from below as well.
Until elites stand down and stop the
brutal squeeze , expect more after painful more of this. It's what happens when societies come
apart. Unless elites (of both parties) stop the push for "profit before people," policies that dominate
the whole of the
Neoliberal
Era , there are only two outcomes for a nation on this track, each worse than the other. There
are only two directions for an increasingly chaotic state to go, chaotic collapse or sufficiently
militarized "order" to entirely suppress it.
As with the climate, I'm concerned about the short term for sure - the storm that kills this year,
the hurricane that kills the next - but I'm also concerned about the longer term as well. If the
beatings
from "our betters" won't stop until our acceptance of their "serve the rich" policies improves,
the beatings will never stop, and both sides will take up the cudgel.
Then where will we be?
America's Most Abundant Manufactured Product May Be Pain
I look out the window and see more and more homeless people, noticeably more than last year and
the year before. And they're noticeably scruffier, less "kemp," if that makes sense to you (it does
if you live, as I do, in a community that includes a number of them as neighbors).
The squeeze hasn't let up, and those getting squeezed out of society have nowhere to drain to
but down - physically, economically, emotionally. The
Case-Deaton study speaks volumes to this point. The less fortunate economically are already dying
of drugs and despair. If people are killing themselves in increasing numbers, isn't it just
remotely maybe possible they'll also aim their anger out as well?
The pot isn't boiling yet - these shootings are random, individualized - but they seem to be piling
on top of each other. A hard-boiling, over-flowing pot may not be far behind. That's concerning as
well, much moreso than even the random horrid events we recoil at today.
Many More Ways Than One to Be a Denier
My comparison above to the climate problem was deliberate. It's not just the occasional storms
we see that matter. It's also that, seen over time, those storms are increasing, marking a trend
that matters even more. As with climate, the whole can indeed be greater than its parts. There's
more than one way in which to be a denier of change.
These are not just metaphors. The country is already in a
pre-revolutionary state ; that's one huge reason people chose Trump over Clinton, and would have
chosen Sanders over Trump. The Big Squeeze has to stop, or this will be just the beginning of a long
and painful path. We're on a track that nations we have watched - tightly "ordered" states, highly
chaotic ones - have trod already. While we look at them in pity, their example stares back at us.
But the elite aren't going to stand down, whatever that might mean. The elite aren't really
the "elite", they are owners and controllers of certain flows of economic activity. We need to
call it what it is and actively organize against it. Publius's essay seems too passive at points,
too passive voice. (Yes, it's a cry from the heart in a prophetic mode, and on that level, I'm
with it.)
"If people are killing themselves in increasing numbers, isn't it just remotely maybe possible
they'll also aim their anger out as well?"
Not necessarily. What Lacan called the "Big Other" is quite powerful. We internalize a lot
of socio-economic junk from our cultural inheritance, especially as it's been configured over
the last 40 years - our values, our body images, our criteria for judgment, our sense of what
material well-being consists, etc. Ellis's American Psycho is the great satire of our
time, and this time is not quite over yet. Dismemberment reigns.
The college students I deal with have internalized a lot of this. In their minds, TINA
is reality. Everything balances for the individual on a razor's edge of failure of will or knowledge
or hacktivity. It's all personal, almost never collective - it's a failure toward parents or peers
or, even more grandly, what success means in America.
The idea that agency could be a collective action of a union for a strike isn't even on the
horizon. And at the same time, these same students don't bat an eye at socialism. They're willing
to listen.
But unions don't matter in our TINA. Corporations do.
Most of the elite do not understand the money system. They do not understand how different
sectors have benefitted from policies and/or subsidies that increased the money flows into these.
So they think they deserve their money more than those who toiled in sectors with less support.
Furthermore, our system promotes specialists and disregards generalists this leads to a population
of individualists who can't see the big picture.
Thank you Gaius, a thoughtful post. That social contract is hard to pin down and define – probably
has different meanings to all of us, but you are right, it is breaking down. We no longer feel
that our governments are working for us.
Of tangential interest, Turnbull has just announced another gun amnesty targeting guns that
people no longer need and a tightening of some of the ownership laws.
One problem is the use of the term "social contract", implying that there is some kind of agreement
( = consensus) on what that is. I don't remember signing any "contract".
I fear for my friends, I fear for my family.
They do not know how ravenous the hounds behind nor ahead are. For myself? I imagine myself the same in a Mad Max world. It will be more clear, and perception shattering, to most whose lives allow the ignoring of
gradual chokeholds, be them political or economic, but those of us who struggle daily, yearly,
decadely with both, will only say Welcome to the party, pals.
Increasing population, decreasing resources, increasingly expensive remaining resources on
a per unit basis, unresolved trashing of the environment and an political economy that forces
people to do more with less all the time (productivity improvement is mandatory, not optional,
to handle the exponential function) much pain will happen even if everyone is equal.
Each person
does what is right in their own eyes, but the net effect is impoverishment and destruction. Life
is unfair, indeed. A social contract is a mutual suicide pact, whether you renegotiate it or not.
This is Fight Club. The first rule of Fight Club, is we don't speak of Fight Club. Go to the gym,
toughen up, while you still can.
"Social contract:" nice Enlightment construct, out of University by City. Not a real thing,
just a very incomplete shorthand to attempt to fiddle the masses and give a name to meta-livability.
Always with the "contract" meme, as if there are no more durable and substantive notions of
how humans in small and large groups might organize and interact Or maybe the notion is the best
that can be achieved? Recalling that as my Contracts professor in law school emphasized over and
over, in "contracts" there are no rights in the absence of effective remedies. It being a Boston
law school, the notion was echoed in Torts, and in Commercial Paper and Sales and, tellingly,
in Constitutional Law and Federal Jurisdiction, and even in Criminal Law and Criminal Procedure.
No remedy, no right. What remedies are there in "the system," for the "other halves" of the "social
contract," the "have-naught" halves?
When honest "remedies under law" become nugatory, there's always the recourse to direct action
of course with zero guarantee of redress
"What remedies are there in "the system," for the "other halves" of the "social contract,"
the "have-naught" halves?"
Ah yes the ultimate remedy is outright rebellion against the highest authorities .with as you
say, " zero guarantee of redress."
But, history teaches us that that path will be taken ..the streets. It doesn't (didn't) take a
genius to see what was coming back in the late 1960's on .regarding the beginnings of the revolt(s)
by big money against organized labor. Having been very involved in observing, studying and actually
active in certain groups back then, the US was acting out in other countries particularly in the
Southern Hemisphere, against any social progression, repressing, arresting (thru its surrogates)
torturing, killing any individuals or groups that opposed that infamous theory of "free market
capitalism". It had a very definite "creep" effect, northwards to the mainstream US because so
many of our major corporations were deeply involved with our covert intelligence operatives and
objectives (along with USAID and NED). I used to tell my friends about what was happening and
they would look at me as if I was a lunatic. The agency for change would be "organized labor",
but now, today that agency has been trashed enough where so many of the young have no clue as
to what it all means. The ultimate agenda along with "globalization" is the complete repression
of any opposition to the " spread of money markets" around the world". The US intends to lead;
whether the US citizenry does is another matter. Hence the streets.
JTMcFee, you have provided the most important aspect to this mirage of 'social contract'. The
"remedies" clearly available to lawless legislation rest outside the realm of a contract which
has never existed.
The Social Contract, ephemeral, reflects perfectly what contracts have become. Older rulings
frequently labeled clauses unconscionable - a tacit recognition that so few of the darn things
are actually agreed upon. Rather, a party with resources, options and security imposes the agreement
on a party in some form of crisis (nowadays the ever present crisis of paycheck to paycheck living
– or worse). Never mind informational asymmetries, necessity drives us into crappy rental agreements
and debt promises with eyes wide open. And suddenly we're all agents of the state.
Unconscionable clauses are now separately initialed in an "I dare you to sue me" shaming gambit.
Meanwhile the mythical Social Contract has been atomized into 7 1/2 billion personal contracts
with unstated, shifting remedies wholly tied to the depths of pockets.
Solidarity, of course. Hard when Identity politics lubricate a labor market that insists on
specialization, and talented children of privilege somehow manage to navigate the new entrepreneurism
while talented others look on in frustration. The resistance insists on being leaderless (fueled
in part IMHO by the uncomfortable fact that effective leaders are regularly killed or co-opted).
And the overriding message of resistance is negative: "Stop it!"
But that's where we are. Again, just my opinion: but the pivotal step away from the jackpot
is to convince or coerce our wealthiest not to cash in. Stop making and saving so much stinking
money, y'all.
and there's the Karma bec. even now we see a private banking system synthesizing an economy
to maintain asset values and profits and they have the nerve to blame it on social spending.
I think Giaus's term 'Denier' is perfect for all those vested practitioners of profit-capitalism
at any cost. They've already failed miserably. For the most part they're just too proud to admit
it and, naturally, they wanna hang on to "their" money. I don't think it will take a revolution
– in fact it would be better if no chaos ensued – just let these arrogant goofballs stew in their
own juice a while longer. They are killing themselves.
When I hear so much impatient and irritable complaint, so much readiness to replace what we
have by guardians for us all, those supermen, evoked somewhere from the clouds, whom none have
seen and none are ready to name, I lapse into a dream, as it were. I see children playing on the
grass; their voices are shrill and discordant as children's are; they are restive and quarrelsome;
they cannot agree to any common plan; their play annoys them; it goes poorly. And one says, let
us make Jack the master; Jack knows all about it; Jack will tell us what each is to do and we
shall all agree. But Jack is like all the rest; Helen is discontented with her part and Henry
with his, and soon they fall again into their old state. No, the children must learn to play by
themselves; there is no Jack the master. And in the end slowly and with infinite disappointment
they do learn a little; they learn to forbear, to reckon with another, accept a little where they
wanted much, to live and let live, to yield when they must yield; perhaps, we may hope, not to
take all they can. But the condition is that they shall be willing at least to listen to one another,
to get the habit of pooling their wishes. Somehow or other they must do this, if the play is to
go on; maybe it will not, but there is no Jack, in or out of the box, who can come to straighten
the game. -Learned Hand
Here in oh-so-individualistic Chicago, I have been noting the fraying for some time: It isn't
just the massacres in the highly segregated black neighborhoods, some of which are now in terminal
decline as the inhabitants, justifiably, flee. The typical Chicagoan wanders the streets connected
to a phone, so as to avoid eye contact, all the while dressed in what look like castoffs. Meanwhile,
Midwesterners, who tend to be heavy, are advertisements for the obesity epidemic: Yet obesity
has a metaphorical meaning as the coat of lipids that a person wears to keep the world away.
My middle / upper-middle neighborhood is covered with a layer of upper-middle trash: Think
Starbucks cups and artisanal beer bottles. Some trash is carefully posed: Cups with straws on windsills, awaiting the Paris Agreement Pixie, who will clean up after these oh-so-earnest environmentalists.
Meanwhile, I just got a message from my car-share service: They are cutting back on the number
of cars on offer. Too much vandalism.
Are these things caused by pressure from above? Yes, in part: The class war continues, and
the upper class has won. As commenter relstprof notes, any kind of concerted action is now nearly
impossible. Instead of the term "social contract," I might substitute "solidarity." Is there solidarity?
No, solidarity was destroyed as a policy of the Reagan administration, as well as by fantasies
that Americans are individualistic, and here we are, 40 years later, dealing with the rubble of
the Obama administration and the Trump administration.
DJG: My middle / upper-middle neighborhood is covered with a layer of upper-middle trash:
Think Starbucks cups and artisanal beer bottles. Some trash is carefully posed: Cups with straws
on windsills, awaiting the Paris Agreement Pixie, who will clean up after these oh-so-earnest
environmentalists.
Yes, the trash bit is hard to understand. What does it stand for? Does it mean, We can infinitely
disregard our surroundings by throwing away plastic, cardboard, metal and paper and nothing will
happen? Does it mean, There is more where that came from! Does it mean, I don't care a fig for
the earth? Does it mean, Human beings are stupid and, unlike pigs, mess up their immediate environment
and move on? Does it mean, Nothing–that we are just nihilists waiting to die? I am so fed up with
the garbage strewn on the roads and in the woods where I live; I used to pick it up and could
collect as much as 9 garbage bags of junk in 9 days during a 4 kilometer walk. I don't pick up
any more because I am 77 and cannot keep doing it.
However, I am certain that strewn garbage will surely be the last national flag waving in the
breeze as the anthem plays junk music and we all succumb to our terrible future.
Related to this, I thought one day of who probably NEVER gets any appreciation but strives
to make things nicer, anyone planning or planting the highway strips (government workers maybe
although it could be convicts also unfortunately, I'm not sure). Yes highways are ugly, yes they
will destroy the world, but some of the planting strips are sometimes genuinely nice. So they
add some niceness to the ugly and people still litter of course.
The trash bit has been linked in other countries to how much the general population views the
public space/environment as a shared, common good. Thus, streets, parks and public space might be soiled by litter that nobody cares to put away
in trash bins properly, while simultaneously the interior of houses/apartments, and attached gardens
if any, are kept meticulously clean.
Basically, the world people care about stops outside their dwellings, because they do not feel
it is "theirs" or that they participate in its possession in a genuine way. It belongs to the
"town administration", or to a "private corporation", or to the "government" - and if they feel
they have no say in the ownership, management, regulation and benefits thereof, why should they
care? Let the town administration/government/corporation do the clean-up - we already pay enough
taxes/fees/tolls, and "they" are always putting up more restrictions on how to use everything,
so
In conclusion: the phenomenon of litter/trash is another manifestation of a fraying social
contract.
The trash bit has been linked in other countries to how much the general population
views the public space/environment as a shared, common good.
There *is* no public space anymore. Every public good, every public space is now fair game
for commercial exploitation.
I live in NYC, and just yesterday as I attempted to refill my MetroCard, the machine told me
it was expired and I had to replace it. The replacement card doesn't look at all like a MetroCard
with the familiar yellow and black graphic saying "MetroCard". Instead? It's an ad. For a fucking
insurance company. And so now, every single time that I go somewhere on the subway, I have to
see an ad from Empire Blue Cross/Blue Shield.
The importance of the end of solidarity – that is, of the almost-murderous impulses by the upper
classes to destroy any kind of solidarity. From Yves's posting of Yanis Varoufakis's analysis
of the newest terms of the continuing destruction of Greece:
With regard to labour market reforms, the Eurogroup welcomes the adopted legislation safeguarding
previous reforms on collective bargaining and bringing collective dismissals in line with best
EU practices.
I see! "Safeguarding previous reforms on collective bargaining" refers, of course, to the 2012
removal of the right to collective bargaining and the end to trades union representation for each
and every Greek worker. Our government was elected in January 2015 with an express mandate to
restore these workers' and trades unions' rights. Prime Minister Tsipras has repeatedly pledged
to do so, even after our falling out and my resignation in July 2015. Now, yesterday, his government
consented to this piece of Eurogroup triumphalism that celebrates the 'safeguarding' of the 2012
'reforms'. In short, the SYRIZA government has capitulated on this issue too: Workers' and trades'
unions' rights will not be restored. And, as if that were not bad enough, "collective dismissals"
will be brought "in line with best EU practices". What this means is that the last remaining constraints
on corporations, i.e. a restriction on what percentage of workers can be fired each month, is
relaxed. Make no mistake: The Eurogroup is telling us that, now that employers are guaranteed
the absence of trades unions, and the right to fire more workers, growth enhancement will follow
suit! Let's not hold our breath!
The so-called "Elites"? Stand down? Right.
Every year I look up the cardinal topics discussed at the larger economic forums and conferences
(mainly Davos and G8), and some variation of "The consequences of rising inequality" is a recurring
one. Despite this, nothing ever comes out if them. I imagine they go something like this:
"-Oh hi Mark. Racism is bad.
-Definitely. So is inequality, right, Tim?
-Sure, wish we could do something about it. HEY GUYS, HAVE YOU HEARD ABOUT MY NEW SCHEME TO BUY
OUT NEW AND UPCOMING COMPANIES TO MAKE MORE MONEY?"
A wet dream come true, both for an AnCap and a communist conspiracy theorist. I'm by no means
either. However, I think capitalism has already failed and can't go on for much longer. Conditions
will only deteriorate for anyone not in the "1%", with no sight of improvement or relief.
"Conditions will only deteriorate for anyone not in the "1%", with no sight of improvement
or relief." Frase's Quadrant Four. Hierarchy + Scarcity = Exterminism (From "Four Futures" )
Reminds me of that one quip I saw from a guy who, why he always had to have two pigs to eat
up his garbage, said that if he had only one pig, it will eat only when it wants to, but if there
were two pigs, each one would eat so the other pig won't get to it first. Our current economic system in a nutshell – pigs eating crap so deny it to others first.
"Greed is good".
Don't know that the two avenues Gaius mentioned are the only two roads our society can travel.
In support of this view, I recall a visit to a secondary city in Russia for a few weeks in the
early 1990s after the collapse of the USSR. Those were difficult times economically and psychologically
for ordinary citizens of that country. Alcoholism was rampant, emotional illness and suicide rates
among men of working age were high, mortality rates generally were rising sharply, and birth rates
were falling. Yet the glue of common culture, sovereign currency, language, community, and thoughtful
and educated citizens held despite corrupt political leadership, the rise of an oligarchic class,
and the related emergence of organized criminal networks. There was also adequate food, and critical
public infrastructure was maintained, keeping in mind this was shortly after the Chernobyl disaster.
Here in the US the New Deal and other legislation helped preserve social order in the 1930s.
Yves also raises an important point in her preface that can provide support for the center by
those who are able to do so under the current economic framework. That glue is to participate
in one's community; whether it is volunteering at a school, the local food bank, community-oriented
social clubs, or in a multitude of other ways; regardless of whether your community is a small
town or a large city.
" Yet the glue of common culture, sovereign currency, language, community, and thoughtful and
educated citizens held despite corrupt political leadership, the rise of an oligarchic class,
and the related emergence of organized criminal networks."
None of which applies to the Imperium, of course. There's glue, all right, but it's the kind
that is used for flooring in Roach Motels (TM), and those horrific rat and mouse traps that stick
the rodent to a large rectangle of plastic, where they die eventually of exhaustion and dehydration
and starvation The rat can gnaw off a leg that's glued down, but then it tips over and gets glued
down by the chest or face or butt
I have to note that several people I know are fastidious about picking up trash other people
"throw away." I do it, when I'm up to bending over. I used to be rude about it - one young attractive
woman dumped a McDonald's bag and her ashtray out the window of her car at one of our very long
Florida traffic lights. I got out of my car, used the mouth of the McDonald's bag to scoop up
most of the lipsticked butts, and threw them back into her car. Speaking of mouths, that woman
with the artfully painted lips sure had one on her
Happily, an alternative exists to the billion dollar "don't blame kids" approach, one that has
historically proven itself and will cost far less than $16,000 per pupil to impart adequate academic
skills. It is simple: pressure laggards to shape up and punish those who disrupt the learning of
classmates. Just return to an earlier era when students themselves were held responsible for learning
their lessons.
Junk the Rousseauian fantasy that children naturally have a thirst for acquiring knowledge so
"educators" need only let nature take its course. Yes, Homo sapiens relish learning, but youngsters
are not innately disposed to sit quietly for long periods and dutifully suffer failure. Learning
may be natural; schooling is not. The corollary is that school for the cognitively weak will be the
most painful. Thus, for many African Americans cultivating self-esteem is anathema to academic
achievement.
Fortunately, the repertoire to impose this necessary discipline is well-known and requires only
modest skill to implement. High-priced rocket science it is not. This is almost forgotten educational
world of shame, stigma, humiliation, dunce caps, browbeating even corporal punishment where teachers
forcefully exert authority over the little savages who refuse to learn while impeding the progress
of others. Further require teachers to impose clear, grammatically correct English to those
with slurred speech and reflexively use profanity. If the teacher's efforts fail, the little miscreants
can immediately be sent out for discipline to be monitored by a wicked witch. Conceivably, some retired
discipline-skilled Nuns from Catholic schools or a retired Marine drill sergeant could offer three-day
workshops on how to manage the classroom
Students can practice sitting still and being quiet for longer and longer times, marching in step
when changing classes, mastering polite conversation when addressing authority figures ("Thank you
Mr. Smith" not 'hey teach'") memorizing famous orations, and build the habits of punctuality, restraint
and patience.
I run a large AP program in a what is euphemistically called a "priority" neighbourhood in
a major Canadian city. Although most of our students are East Asian and South Asian and come from
outside our catchment area, the majority of the local community is black.
After twenty years of our program offering completely subsidized AP exams, after-class tutorials,
and massive promotion efforts emphasizing the advantages of taking AP directed to our black students,
still less that 5% of the population of our AP classes consists of blacks.
And we have never had a black AP National Scholar. Not one. The local school board would LOVE
to see such an event, and I can't imagine it ever happening
Are you suggesting that our alien, Third-World, clan-based minority populations adopt the
values of discipline, accountability, punctuality, and rule-following typical of the majority's
beyond-kin, altruistic-based culture from northern Europe in the hope of achieving similar
social, academic, technical, and economic outcomes?
There's an extent to which this does work. Parochial schools with strict discipline
policies have always gotten more out of black students than public schools. African students,
who do not typically have a race card to play and are products of Euro-colonial school systems,
in my experience are nearly always better students than black Americans.
Imagine a Venn diagram, in which one circle represents cognitive ability (IQ) and the other
circle represents discipline and culture. The overlapping area represents "educational achievement."
The overall black cognitive ability circle, by itself, will always be smaller than a corresponding
white circle, but it is possible to gain more achievement with more structure and discipline.
There is a limit to how far you can go with this approach, but you can make some gains.
Of course, public schools and colleges practically kiss blacks on the ass for misbehavior rather
than discipline them. Blacks are fully aware that the black teachers and administrators are incompetent
frauds, that liberal whites are easily pushed around or manipulated, that they can always play
the "racism" card, and that Afrocentric curricula is pure bullshit and that it was the white man
who invented their iPhones, space flight, etc.
One aspect of the black personality is that blacks respond to, and generally respect, a show
a force. You see this in sports, for instance, in prison, and the military. Some of the most competent
and useful blacks you will encounter are in the military, where there is a set of expectations,
a white chain of command, and punishment for failure.
Blacks wouldn't necessarily become geniuses if you applied a military structure to education,
but you'd see some improvement.
Can every child receive a good education? With school choice and competition, yes. The problem?
Powerful teachers unions oppose school choice. Rebecca Friedrichs, a public school teacher who
took her case against the teachers union all the way to the Supreme Court, explains why school
choice is the right choice.
@Njguy73 There's no need to racially segregate schools. The solution has already been implemented.
It's called having a school district where the housing prices do the discrimination, so the schools
don't have to. An awfully expensive solution that consigns white working class children to the
tender mercies of the snarling black underclass.
The plight of black students in black schools became especially dire when the education establishment
and the media pulled a slight of hand and started labeling lazy ( a personal fault) students as
unmotivated (and therefore the fault of society not motivating them.)
What hasn't been pointed out is while public schools in poor areas have been failing for decades,
Catholic schools located in the same areas have continued to turn out hundred of thousands of
literate, well behaved black students.
The real tragedy is that these very productive ghetto Catholics schools have been closing at
an increasing rate despite their successes because of economic problems. Vouchers would help them
to stay open,
THE ACLU however, would make sure that they wouldn't get them.
I'm always impressed by the quality of my black African postgrad students, who mostly come
from lower middle/upper working class backgrounds in cities like Laos. They are clearly decently
educated, by methods the exact opposite of what is advocated in the USA – strict discipline, uniforms,
regulation, a decent amount of rote memorisation (but not the passivity of the Middle East/South
Asia).
US educationists could learn a lot from Nigeria, or even Jamaica, but are clearly far too arrogant
to do so.
Testing and teaching are incompatible to one another, less tests and more teaching.
Primary school is NOT the most important time, a few essential skills, a wide and rambling
exposure to general knowledge, and some actual fun will do.
Primary school should produce a student capable of writing coherent sentences, reading 80-120
words per minute (well written texts only with unusual words), general knowledge of science,
the general framework of modern world history, and enough maths to do simple algebra - anything
more is a bonus, but not essential to secondary school.
Secondary school is the secondary level of knowledge - it has nothing much in common with
Primary education.
Secondary school is about the development of concepts in different subjects - and the study
of literature (a self-contained concept), is foundational to all the other higher subjects.
Literature is about concepts, not morals, slogans, good behaviour or anything else. They
are complete, honest works supremely well written world view of the author. The quality of
literature is it most important feature - the best and only the best.
The conceptual integrity of literature, not a particular style of language is critical.
Literature should not be chosen because it is reverent, but because it is good and great. Confession
I hate reading Jane Austin, a girly book of all girly books, but when I finish her work I understand
the world were being good is not just a virtue, but an aspiration. For many reasons she was
one of the most read authors in the trenches of World War I.
The quality of text books (books of text not pictures) is ESSENTIAL there is no choice in
this, no leeway. They must be coherent, the work of the best minds in the subject, comprehensive,
and clearly written - only a true expert can make things simple without also making it stupid.
Text books of quality do not have to be up-to-date, but they have to be conceptually complete
and clear - a good textbook is not necessarily a recent one.
Textbooks are the last resort, which is the reason they have to be good - it is where the
student goes to understand what they do not understand - that is always hard and they need
a reliable source material - only the best textbooks will do.
Textbooks are not teaching material, they are reference material.
Standard tests are rubbish, written examinations twice a year are best - this is why text
books are important - hitting the books is not easy, I say it again, they therefore need to
be the very best - not the normal US textbook - which is CRAP.
The best mark of a substantial work should be the grade, not the average mark - students
who learn have to be brave and need to push things - a good student tries and fails long before
they try and succeed (the order is sometimes in the reverse).
A student's progress is marked by their best mark, their highest achievement that counts,
all the rest are run-offs. A student can be lazy, a student might rest on their laurels, that
does not matter, what they achieved, not how they went about it is what examination should
do.
It does not matter what a teacher is called by students, but that teacher actually knows
their area, is enthusiastic about their knowledge, is supported by the school, encouraged to
do more and occasionally make mistakes in trying.
Micro-management, in fact management in general, and good teaching are incompatible.
School discipline is simple and only breaks down because of mismanagement.
Heads and deputies are not there to attend meetings, they must be seen, patrol the halls,
greet the students and be known.
Teachers need only have a disruptive student leave the class room and stand in the hall.
The deputies need to take them to detention where they sit and do nothing until the next lesson.
Do not trap students behind files of bad behaviour. Boys especially do stupid things, often
and repeatedly, only the mean acts should be recorded in detail.
Stop trying to get kids to apologise, girls will do it, and the better boys won't.
Make sure the kids get food, and have fun exercise (competitive sport should be an elective).
Running education is not hard, the fundamentals have been known for hundreds of years. What
exists now has been made, it is a policy of de-education and it is working all too well.
If diversity represents sort of "reverse racial discrimination", academic achievements be damned?
Notable quotes:
"... is the notion of "diversity" that is being aimed at supposed to replicate among faculty the current demographic breakdown of our country as a whole? ..."
"... Conversely, if the goal of diversity is compensatory, i.e., seeks to make up for past social injustices and the demographic disequilibrium they have produced, then here too we must be explicit about the point of reference that is to guide our remedial efforts. ..."
"... is diversity pursued under that principle to amount to a retroactive balancing of sorts, an open-ended institutional "reparation" for past injustices and inequities? ..."
"... Leaving aside logistical difficulties, to which one may certainly be sympathetic, why exclude any number of other descriptors from our conception of diversity, such as social class, ethnic background, veteran status, political views, religious belief, childhood trauma, aesthetic preferences, dietary philosophy, dance and gardening skills, past struggles with mental disability, etc.? ..."
"... 'Diversity' was always at best a racket and at worst a knowing stage – a mere stage – in the war to replace Western Civilization. ..."
The recent controversy surrounding my colleague and friend, Paul Griffiths, Warren Professor of Catholic
Theology in the Duke Divinity School (DDS), has been widely covered. Countless op-ed pieces, fueled
by
Rod
Dreher's online publication of internal memos and public emails at The American Conservative
, as well as prominent editorials in the Wall Street Journal and the New York Times
, have reached many readers.
... ... ...
Unfortunately, that dialogue remains more elusive than ever. Instead, for quite some time now, the
word "diversity" has served two distinct and equally problematic purposes: the magical and the litigious.
Some university administrators, particularly those less loyal to the job they have than to the one they
covet next, have embraced "diversity" as a professional talisman of sorts, a term that, if wielded frequently
and with conspicuous reverence, will magically unlock doors higher up on the professional ladder. Conversely,
to faculty members craving moral ascendancy over colleagues whose superior achievements they may regard
with a mix of dread, inadequacy and envy, there is no more powerful weapon than to charge the target
of their resentment with opposition to diversity, which in the present order of opportune allegations
ranks just below that of the child molester. To put it in Platonic terms, contemporary academia has
been mirroring our country's deteriorating civic discourse by supplanting knowledge with opinion, and
by weaponizing our opinions, rather than understanding them as something for which we bear great responsibility.
1) Is the notion of "diversity" to be understood as a mimetic or compensatory endeavor? That is,
is the notion of "diversity" that is being aimed at supposed to replicate among faculty the current
demographic breakdown of our country as a whole? Or is the objective to compensate for the extreme
dominance of a certain type of faculty-white, Caucasian, male, and (putatively) heterosexual-as it undeniably
prevailed well into the 1990s at many institutions of higher learning?
2) Supposing, then, that higher education understands itself to be committed to a mimetic conception
of diversity, then what is to serve as our point of reference? Is diversity, as currently affirmed by
institutions of higher education, to be modeled on the overall demographic breakdown of the population
in the United States-say, as captured by the most recent national census? Or is the university's conception
of diversity aimed at some other norm of proportionate representation of minorities, say, one prevalent
in academia as a whole or as endemic to specific disciplines?
3) Conversely, if the goal of diversity is compensatory, i.e., seeks to make up for past social
injustices and the demographic disequilibrium they have produced, then here too we must be explicit
about the point of reference that is to guide our remedial efforts. Is the objective to compensate
for a historical lack of diversity that for many decades prevailed inside the academy? And, if so,
is diversity pursued under that principle to amount to a retroactive balancing of sorts, an open-ended
institutional "reparation" for past injustices and inequities? Here it ought to be kept in mind
that, to cast the matter in sacramental terms, there can be no atonement without forgiveness. Hence,
if diversity is understood as compensation, then not only must past wrongs in this regard be clearly
identified, but any institutional acknowledgment of past injustice must also be met by, and conclude
with, an act of comprehensive forgiveness. Otherwise, institutions would remain forever caught up in
a downward spiral of moral recrimination and self-abasement, respectively.
4) Assuming that these questions can be openly deliberated and satisfactorily answered (which in
the present climate is to assume a great deal indeed), more intractable issues yet will arise. For regardless
of whether the modern research university opts for a mimetic or compensatory approach to diversity,
it is by definition an inherently selective, elite institution. Thus, one must wonder whether institutions
of higher education can balance their highly selective practices of faculty recruitment-practices directly
related to the goal of the university as such, viz., advancing knowledge-with a demographically representative
notion of "diversity" such as it exists outside of academia?
5) Finally, we should ask why currently prevailing assumptions and practices concerning "diversity"
are conceived in such peculiarly narrow, not to say non-diverse ways. We know that empirical demographic
studies, including the national census conducted by the U.S. government every decade or so, rely on
many categories and descriptors and, consequently, yield a far more inflected and robust conception
of our society's diverse composition. That being so, what justifies higher education's conception of
"faculty diversity" being mainly restricted to the categories of race and gender? Leaving aside
logistical difficulties, to which one may certainly be sympathetic, why exclude any number of other
descriptors from our conception of diversity, such as social class, ethnic background, veteran status,
political views, religious belief, childhood trauma, aesthetic preferences, dietary philosophy, dance
and gardening skills, past struggles with mental disability, etc.?
Notwithstanding my agreement with the author, this article is very poorly
written and filled with academic jargon, each sentence representing the very antithesis of Churchill's
observation that there is nothing more powerful in the English language than a simple, objective sentence.
"'Diversity' is turning into idolatrous worship of empty notions"
The above statement is false because the verb tense is wrong. This is not something new. 'Diversity'
was always at best a racket and at worst a knowing stage – a mere stage –
in the war to replace Western Civilization.
Professor Pfau: Did you stand up and defend the Duke lacrosse team and its head coach? Did you condemn
colleagues such as Leftist Houston Baker.
"... Tutition used to be free in the UK. Then they decided that those lazy students needed to have some skin in the game and suddenly tuition was 1000 pounds. Then a few years later it was 9000 pounds and all the college grads there now have US-level student debt. ..."
"... A big reason Corbyn's a commie is because he wants to abolish tuition to bring the UK back to its communist past of 1997 and give young people the same deal all the people in charge had. ..."
No actual figures, but presumably there was big yute
turnout in the UK Everyone will now claim that a non-commie
Labour leader like that nice Ed Miliband would OF COURSE have
done as well as Joseph Stalin Lenin Marx Corbyn, and in fact
BETTER, but that's bullshit.
That nice Ed Miliband couldn't
do in 2015, and I'm not sure who the "unnamed generic normal
Labour candidate" would otherwise be. Theresa May's
incompetent evil helped, but Corbyn staved off what was
supposed to have been a Labour extinction election and while
there will still likely be a Tory-led government, it will be
pretty fragile. A coalition with a bunch of bigoted religious
nutters from Northern Ireland who aren't on board with May's
Brexit plans.
Labour went after The Kids Today and got them
to the polls. Wasn't enough to win, but the polling outfit
predicting a likely hung parliament was considered to be
"insane" even just a few days ago.
Tutition used to be free in the UK. Then they decided that
those lazy students needed to have some skin in the game and
suddenly tuition was 1000 pounds. Then a few years later it
was 9000 pounds and all the college grads there now have
US-level student debt.
A big reason Corbyn's a commie is
because he wants to abolish tuition to bring the UK back to
its communist past of 1997 and give young people the same
deal all the people in charge had.
In 2015, Miliband said he'd cut them. To just SIX THOUSAND
POUNDS. Maybe if he'd gone all the way...
"... The biggest winner last year was Thomas M. Rutledge of Charter Communications, who pulled down a $98 million pay package, according to the Equilar 200 highest-paid chief executive rankings, conducted for The New York Times. ..."
"... Mr. Rutledge, 63, stormed to the front of the pack after closing his company's mega-merger, a $65 billion takeover of Time Warner and a smaller competitor. For that, he got a big bump in pay. The year before, his compensation totaled $16.4 million. ..."
As C.E.O. Pay Packages Grow, Top Executives
Have the President's Ear
https://nyti.ms/2r4t6mY
NYT - MATTHEW GOLDSTEIN - MAY 26, 2017
Pay packages for
America's top executives once again climbed in 2016 after
slipping the year before.
Perhaps the pay surge reflects the times: Stocks are
coming off a strong run. Unemployment is low. The economy is
percolating.
And President Trump is not only promising to roll back
what he calls excessive business regulations but also
listening keenly to what corporate America has to say. Since
taking office on Jan. 20, the businessman-turned-politician
has met with hundreds of executives, including at least 41 of
last year's 200 best-paid C.E.O.s, a New York Times analysis
shows.
The biggest winner last year was Thomas M. Rutledge of
Charter Communications, who pulled down a $98 million pay
package, according to the Equilar 200 highest-paid chief
executive rankings, conducted for The New York Times.
Mr. Rutledge, 63, stormed to the front of the pack after
closing his company's mega-merger, a $65 billion takeover of
Time Warner and a smaller competitor.
For that, he got a big bump in pay. The year before, his
compensation totaled $16.4 million.
This past March, Mr. Rutledge met with Mr. Trump in the
Oval Office. The president lavished him with praise for a
plan to add 20,000 jobs, although the broad outlines of that
initiative had been laid out nearly two years earlier, when
the merger was first announced.
This combination - the gains in pay for chief executives,
the president's pledge to deregulate and cut corporate tax
rates - sets the stage for perhaps the most consequential
moment for corporate governance since the financial crisis of
2008. Rising executive compensation only widens the gap
between top executives and most American workers. Mr.
Rutledge, for instance, made 2,617 times the average American
worker's salary of $37,632, according to figures maintained
by the A.F.L.-C.I.O. ...
(graphic, at the link))
President Trump Greets the C.E.O.s
Since Inauguration Day, President Donald J. Trump has met
with at least 307 chief executives of American companies, 41
of whom were among the 200 highest-paid C.E.O.s in 2016, as
calculated by Equilar, a compensation analysis company.
Would Shareholders in Charter Communications Have Less
Money If They Paid Their CEO $10 Million Instead of $98
Million?
That's the question the board of directors of Charter
should be asking, but I suspect they never do. The company
scored first in the New York Times's annual compilation * of
CEO pay packages, coming in almost $30 million ahead of CBS,
which is number 2. Of course if the CEOs earned less than the
other top people in the corporate hierarchy would likely get
smaller paychecks as well. And, it might be harder for the
presidents of universities, foundations, and non-profits to
explain the need for seven figure salaries for their work.
It seems unlikely that directors ever push in a big way
for lower pay for CEOs because they have almost no incentive
to do so. More than 99 percent of the directors put up for
re-election are approved by shareholders. This is because it
is very difficult to organize among shareholders to unseat a
director. (Think of the difficulty of unseating an incumbent
member of Congress and multiple by about 100.)
As a result, there is no reason to raise unpleasant
questions at board meetings. Even though they are supposed to
serve shareholders, which means not paying one penny more
than necessary to CEOs and top management for their
performance (just as CEOs try to pay workers as little as
possible), their incentive is to get along with top
management. The result is the upward spiral in CEO pay that
we have seen in the last four decades.
A big part of the problem is that asset managers (think
Vanguard and Blackrock) routinely support management slates
as they vote trillions (literally) of dollars worth of stock
held by people in their 401(k)s and IRAs. These asset
managers care more about staying on good terms with top
management than making sure they aren't overpaid. This
creates a structure where ridiculously rich CEOs, who are
usually big celebrants of the market, are effectively
shielded themselves from market discipline. Isn't that the
way markets are supposed to work?
Here are 200 of the highest-paid chief executives in
American business. The data comes from the Equilar 200
Highest-Paid CEO Rankings, which lists the compensation of
the chief executives of 200 public companies with annual
revenue of at least $1 billion, that filed proxies by May
1st.
This list is often seen posted on the bedroom wall of certain
young ladies living in Manhattan. And the poor young dudes at
the gym cannot figure out why they can't get a date.
The Question Isn't Why Wage Growth Is So Low. It's Why
It's So High.
https://nyti.ms/2r5tRMx
via @UpshotNYT
NYT - NEIL IRWIN - MAY 26, 2017
One of the economy's biggest mysteries is this: The labor
market is the strongest it has been in a decade, yet wages
are rising barely faster than inflation.
For some reason, the booming job market and ultralow
unemployment rate, which fell to 4.4 percent in April,
haven't led employers to raise pay in a meaningful way. That
flies in the face of a basic assumption of how the economy
works: A tight labor market is expected to lead to pay
increases that in turn fuel broader inflation.
But the mystery of the missing pay raises may have a
surprisingly simple solution, and one that sheds light on the
larger economic challenges of our age.
Consider a simple model for how much the average worker's
pay ought to be rising: You could simply add together the
productivity growth rate - how rapidly the output generated
by each hour of labor is increasing - and the inflation rate,
which tells us how quickly prices are rising.
Over the last 24 months through March, inflation has come
in at 1.4 percent a year, and productivity growth at 0.6
percent. Those are very low numbers. And in our supersimple
model, you may expect average worker wages to have risen only
2 percent.
In fact, the average hourly earnings for nonmanagerial
private sector workers rose 2.4 percent a year in that
period. You may not feel like cheering about that, but it's
more than we might have expected, with inflation and
productivity so weak. The real mystery, then, isn't why wages
are rising so slowly, but why they're rising so fast.
If anything, the numbers show that workers are capturing
more than their share of the spoils from a growing economy.
And that, as it happens, is the reverse of a decades-long
trend. For most of the last half-century - 84 percent of the
time since 1966 - average wages have grown more slowly than
would be predicted based on productivity and inflation
growth. The rise in the share of employee compensation that
takes the form of health benefits instead of wages is a
factor, but doesn't explain the whole gap; for long
stretches, that gap exceeded 2 percentage points a year.
That means the labor share of national income was
shrinking, or, more plainly, that workers' slice of the
economic pie got smaller while the part taken by shareholders
and other owners of capital grew. ...
A Wall Street Journal analysis shows that since the 1990s,
sparsely populated counties have replaced large cities as
America's most troubled areas by key measures of
socioeconomic well-being-a decline that's accelerating
By Janet Adamy and Paul Overberg
Atthe corner where East North Street meets North Cherry
Street in the small Ohio town of Kenton, the Immaculate
Conception Church keeps a handwritten record of major
ceremonies. Over the last decade, according to these
sacramental registries, the church has held twice as many
funerals as baptisms.
In tiny communities like Kenton, an unprecedented shift is
under way. Federal and other data show that in 2013, in the
majority of sparsely populated U.S. counties, more people
died than were born-the first time that's happened since the
dawn of universal birth registration in the 1930s.
...
In many cities, falling crime has attracted more middle-
and upper-class families while an influx of millennials
delaying marriage has helped keep divorce rates low.
Maria Nelson, a 45-year-old media company manager who came
to Washington, D.C., to work after college, had always
assumed she would someday move to the suburbs, where she had
grown up. A generation of heavy federal spending helped make
the nation's capital one of the country's highest-earning
urban centers. Its median household income rose to $71,000 a
year in 2015, a 51% increase since 1980, adjusted for
inflation.
While Ms. Nelson was able to buy a brick row house in
2002, she said she worries about younger colleagues-let alone
anyone moving in from a small town-who face soaring
real-estate prices. "The whole area just seems to be out of
range for most people now," she said
In Kenton, Father Young said that despite their mounting
troubles, he is optimistic about his parishioners. Some of
them tell him they worry about what will happen when they die
because they still provide for their adult children.
He likes to say there is always hope. "They can find a
job," he said. "Columbus is close enough."
Sorry Kentucky; in a federal government run like a business -
you are a LOSER. Time to cut you off and leave you behind. If
we are going to WIN so much that we get tired of it, we just
cannot carry to load of someone like you.
Middlebury College just completed its final round of
disciplinary hearings
for students involved in March's violent disruption of a lecture by Charles Murray, the
influential but controversial social scientist.
This toothless response reflects a deeper rot.
Middlebury, like many prestigious colleges, has steadily gravitated away from its core
educational mission and now serves primarily as a sort of finishing school for the
ruling class. Professors and administrators alike are simply expected to shower students
with affirmation-and then hand over a degree securing smooth entry into America's elite.
College has become four years of expensive fun. This is what parents and students now
demand.
This change-from institutions of learning to
institutions of affirming-threatens the nation's future as colleges foster a vicious
strain of anti-intellectualism.
At over $60,000 a year, Middlebury's tuition buys much
more than books, lodging, and classes. Students also get a
campus-wide square dance
,
dining halls that host culinary "
world
tours
," lavish fitness facilities, and
an annual winter carnival
complete with fireworks, a hot chocolate bar, and snow sculptures.
Rob Montz is a fellow at the Moving Picture Institute. Find his work at: RobMontz.com.
Check out his interview with TAC executive editor Pratik Chougule at Fearless Parent Radio:
http://fearlessparent.org/free-speech-controversy-us-elite-universities-episode-104/
"... Baker correctly diagnoses the impact of boomers aging, but there is another effect - "knowledge work" and "high skill manufacturing" is more easily outsourced/offshored than work requiring a physical presence. ..."
Baker correctly diagnoses the impact of boomers aging, but
there is another effect - "knowledge work" and "high skill
manufacturing" is more easily outsourced/offshored than
work requiring a physical presence.
Also outsourcing
"higher wage" work is more profitable than outsourcing
"lower wage" work - with lower wages also labor cost as a
proportion of total cost tends to be lower (not always).
And outsourcing and geographically relocating work
creates other overhead costs that are not much related to
the wages of the local work replaced - and those overheads
are larger in relation to lower wages than in relation to
higher wages.
libezkova -> cm... May 20, 2017 at 08:34 PM
"Also outsourcing "higher wage" work is more profitable than outsourcing "lower wage" work"
"... What the author inadvertently points out is that capitalism, particularly the so called consumer capitalism that we have is like a board game; It has a beginning when anything is possible. A middle when a broad spectrum of players prosper and there is extra money for infrastructure and public amenities. Then an end where wealth is increasingly concentrated in fewer and fewer hands and the waste stream has taken its toll. ..."
"... Tell me, when where these good old days, of "true" capitalism? Back when we were enslaving Africans? ..."
"... workers fail to ..."
"... Yeah, it's really a pity that author of such a well-written piece confuses GDP with living standards. If that was the case people wouldn't vote for nationalist and populists. ..."
"... serving their own interests; ..."
"... In our imperial system, it does not matter to the people whether they vote, or how; it matters, occasionally, to the contestants' position in the power structure, but nothing more than that. ..."
"... there are rumors that the Federal Liberal Party in Canada is exploring this. ..."
"... 8) Nothing in this section shall be construed to impose a duty upon: (a) A provider of an electronic store, gateway, marketplace or other means of purchasing or downloading software or applications to review or enforce compliance with this section by those applications or software; or (b) A provider of an interactive computer service to review or enforce compliance with this section by third-party content providers. As used in this paragraph, "interactive computer service" means any information service, system or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such services or systems operated or offered by libraries or educational institutions. (9) This section does not apply to general audience Internet websites, general audience online services, general audience online applications or general audience mobile applications, even if login credentials created for an operator's site, service or application may be used to access those general audience sites, services or applications. ..."
Definitely worth reading and reading again. What popped on first reading is the description
of the rise of income in Poland and the stagnation of income in the U S of A. What pops for me
on seccond reading is these paragraphs about tax evasion and income inequality: >>
One reason nothing happens is a culture of tax evasion. There's a folk belief in American business
that if you pay full taxes, you're not doing your fiduciary duty, and your board will fire you.
Apple now has a quarter trillion dollars offshore that it refuses to put into direct productive
use in the United States. Apple boasts that its products are designed in California-they will
sell you a $300 book called Designed By Apple In California. But they do their damndest to make
sure that California never sees a penny of their overseas profits.
You in the EU are all too familiar with this brand of tax evasion. Google, Amazon, Apple, Microsoft
have all been under investigation or in court on charges of evading European taxes.
Another reason good intentions don't translate is that capitalism, especially venture capital,
doesn't work very well when there is vast wealth inequality.
[Tax evasion isn't just a folk belief: It is taught in U.S. law schools and in business schools,
along with union busting.]
What the author inadvertently points out is that capitalism, particularly the so called
consumer capitalism that we have is like a board game; It has a beginning when anything is possible.
A middle when a broad spectrum of players prosper and there is extra money for infrastructure
and public amenities. Then an end where wealth is increasingly concentrated in fewer and fewer
hands and the waste stream has taken its toll.
Another reason good intentions don't translate is that capitalism, especially venture capital,
doesn't work very well when there is vast wealth inequality.
The author does not understand that capitalism creates vast wealth inequality: that's the whole
point. Inequality is a feature, not a bug, and so trying to save capitalism while eliminating
vast wealth inequalities is working at cross-purposes, and only one of those aims can be successful and
guess which one it always is?
"capitalism creates vast wealth inequality: that's the whole point."
Not in Adam Smith's world, nor Henry Ford's. True capitalists prosper by creating wealth which
improves the lives of everyone around them. Crony capitalists, the ones we have now, strip wealth
from others. Witness today's bubble-and-bust cycles rather than the prior widespread economic
growth.
The capitalism you see today is an abomination of the original concept, just as Mnuchin's claim
to support "Glass Steagall" is an abomination. And don't get me started on the "Affordable" Care
Act, or the "Patriot" act which gutted the Constitution
P.S. The original author's article is riddled with glaring factual errors, but he has the big
picture right: it's time to restore Antitrust Law and apply it to the internet monopolists. And
restore privacy rights and and it's a long list. Start fighting now, if you want anything to
happen in your lifetime!
The author's central thesis strikes me as correct: that Europe provides the only hope for applying
any brakes whatsoever to the American tech sector. I hope someone over there is listening, as
prospects here seem utterly hopeless.
Freedom means people should have reasonable alternatives, choices on any product, service or
ideology. Today's internet experience lacks that freedom aspect quite a bit.
Hokum. The "theory" is that it benefits everyone, but the reality is quite different.
Tell
me, when where these good old days, of "true" capitalism? Back when we were enslaving Africans?
Back when we were hanging Wobblies? Back when we had to put nets around our factories to keep
the workers from committing suicide? Please the dictatorship of the proletariat worked out just
fine in Marx's theory, too.
Another one for the gallery of glaring factual errors: "capitalists prosper by creating wealth".
Unless that was an epic typo for something like: " workers fail to prosper while creating
wealth".
As for "the original concept" of "capitalism", in which district of the astral plane did you
find that? Apart from his anthropological sci-fi about the origins of money in "barter", Adam
Smith generally tried to write about the real world. Just like Marx, except that Smith was speaking
for a different class interest, whose "moral philosopher" imagined himself to be. For that reason,
"capital" and "capitalist"(n.) were important concepts for Smith and Marx alike, but "capitalism"
- a sort of hybrid implying the social reality and the ideology cheerleading for it at once without
ever really distinguishing between the two - is an abstraction that neither had much time for,
and one that only really caught on once both were dead.
Wasteman – for a start, unlike todays Cronyists, Adam Smith understood that capitalism would
not function for the benefit of all unless monopolies were restrained by government:
"The interest of the dealers [referring to stock owners, manufacturers, and merchants], however,
in any particular branch of trade or manufacture, is always in some respects different from, and
even opposite to, that of the public. To widen the market and to narrow the competition, is always
the interest of the dealers. To widen the market may frequently be agreeable enough to the interest
of the public; but to narrow the competition must always be against it, and can serve only to
enable the dealers, by raising their profits above what they naturally would be, to levy, for
their own benefit, and absurd tax upon the rest of their fellow-citizens. (Adam Smith, Wealth
of Nations (Amherst, New York: Prometheus Books, 1991), pages 219-220)"
Another interesting perspective is from J. K. Galbraith (sorry I lost the source) who pointed
out that in an economy with healthy competition, profit margins are lower, but employment and
wage income are necessarily higher.
And pray tell, who is it who will restrain the monopolists? Our elected officials, who just
so happen to be under the control of those same capitalists? Which is possible due to the vast
wealth inequalities that capitalism generates .
Capitalists, almost without exception, do everything in their power to avoid competition. The
idea is to make a profit and competition is antithetical to that.
Lots of things are good in theory, like three-way relationships. Reality, on the other hand,
feels no obligation to correspond with theory.
Not exactly. Capitalism extends or expands existing inequality. It was the development of agriculture
several thousand years ago that broke the approximate egalitarianism of the hunter gatherer lifestyle.
Even that had some inequality, but not much. For more information, see the early chapters of
The Great Leveler ,
by Walter Scheidel.
Hence the "vast" part. I'm not so silly as to think that before capitalism there was not wealth
inequality. But not the type where a few hundred people control more wealth than a few billion.
It would seem to me, on just a gut level based on a little reading, that whereas systems like
feudalism were unequal but relatively stable*, i.e. the level of inequality stayed the same generation
to generation, capitalism's dynamics have caused inequality to skyrocket, both nationally and
globally.
*Or at least cyclically stable, as with regular debt jubilees in Sumer.
"Living standards in Poland in 2010 had more than doubled from 1990." This sentence annoyed me to no end. Yes, the reason that is true is because every capitalist country in the world worked to smash
and destroy communism without pause for its entire life and then internal and external oligarchs
snatched up everything.
Living standards increased over that period in Poland but so did inequality and poverty.
So the country got some shiny new consumer goods (which the author seems enamored by) while
the populations poverty rate continues to climb. Thank god for privatization ("Suddenly people had cars, phones, appliances" and suddenly poverty
surged as well), and the end of those no good dirty commies, right?
Yeah, it's really a pity that author of such a well-written piece confuses GDP with living
standards. If that was the case people wouldn't vote for nationalist and populists.
In any case, despite very good performance of Polish economy, its convergence to West Europe
at least in terms of GDP (PPP) is questionable as the cases of Czech Republic and Slovenia show.
See the article The convergence dream 25 years on in Bruegel
There is a reason why people voted for the populist PiS and ousted the liberals who had made
such a great job at bringing Poland into the EU and its "market society".
A long but brilliant article that everyone should take the time to read! I want all the techies
in my family to read it because it points out some of the uneasiness even techies feel about the
their industry.
My favorite paragraph (although there were many close seconds):
"But real problems are messy. Tech culture prefers to solve harder, more abstract problems
that haven't been sullied by contact with reality. So they worry about how to give Mars an earth-like
climate, rather than how to give Earth an earth-like climate. They debate how to make a morally
benevolent God-like AI, rather than figuring out how to put ethical guard rails around the more
pedestrian AI they are introducing into every area of people's lives."
Yep .
A previous example was given about a hypothetical House vote, where, in yes-districts, voters
are split 51-49 yes (assuming that is so lots of times, congress persons vote 'their conscience')
and voters in no-districts are 90-10 for no. Yes votes win by one.
In that case, the popular vote actually is for No.
And that has nothing to do with slavery.
It's how the math works in a representative voting system.
Before responding to MLTPB, I'd like to voice my opinion that the OP article is thoughtful
and reflects a decent level of awareness of the reality of the world, along with positive solutions
that would be achievable in a polity that had the public good as its aim.
As for MLTPB's opinion on the vote, I beg to differ: it has everything to do with slavery.
That's how the numbers work in our system, which is imperial, not representative. It's a bitch
when instead of Augustus you get Caligula, but it doesn't change the basic reality of how the
system works, and has worked since Ike. In our imperial system, it does not matter to the people
whether they vote, or how; it matters, occasionally, to the contestants' position in the power
structure, but nothing more than that.
Here is the reality: the people in any office in our federal government-basically everyone
who lives in or around Washington DC-have the same relationship to American people as they have
to Russian, Chinese, or Indian people: that of serving their own interests; predation,
if you will; animal husbandry, if you prefer. They will act so as to extract the maximum value
consistent with not-killing-the-goose-that-lays-the-golden-eggs from every person, wherever they
are located, whatever their religion, whatever their nationality, as long as they are powerless,
which means everyone who is a private citizen, however rich, or a small business; everyone who
is not a Forbes 500 corporation.
The notion that the federal government is somehow tied to "Americans," or even to the geographical
entity now known as the USA, much less to the values expressed in the so-called "founding documents,"
is a child's bedtime story.
It's amusing that it took the election of Trump to bring this realization about; but really,
that is why some of us actually voted for Trump: to rub the idiots' noses in the reality of their
political environment. (Not me, mind you; because I do not bother to vote: when I want something
done, I write a check, like any experienced consumer of government services.)
There is a cure, but it is not changing the election mechanism so the choice of president results
from the popular vote totals in a population of 300 million. No, it means changing it so there
are 1000 presidents and 100,000 representatives and 1000 supreme courts, and 1000 republics. Those
are the numbers that would achieve representative government the way it was designed to function
by people who knew. Alternatively, you could reduce federal taxation to 1/10th of its current
level, and assign all other taxation to the township, with a population limit of 20,000. Now you
would have something that is no longer imperial.
But since most people since the dawn of history have lived under organizations that are imperial
with perfect happiness, the appropriate course of action is not to struggle in futility for change,
which would almost certainly do more harm than good, and result in an outcome that would just
use up the world's resources more swiftly in the chaos of consumption and war. The optimum course
is to watch reruns of amusing sitcoms and eat good food; to gratify the animal pleasures and such
pleasures of the mind as remain to aging bodies mistreated by pharmaceuticals; and to die as quickly
and painlessly as the authorities permit.
In our imperial system, it does not matter to the people whether they vote, or how; it matters,
occasionally, to the contestants' position in the power structure, but nothing more than that.
In that case, the popular vote question is not a question anymore (with the current 1 president,
instead of 1,000 setup), as you point out here:
There is a cure, but it is not changing the election mechanism so the choice of president
results from the popular vote totals in a population of 300 million.
I have mentioned before that Rome had, at one time, 2 or 4 co-emperors. You suggest 1,000 presidents,
as a solution. That's nothing to do with slavery, except in the sense that we're all serfs or
slaves. It about making one's voice heard within a smaller group, having someone representing
you along with fewer constituents.
The inherent problem of having representatives vote, versus direct voting, is still here, as
in the example given above. The math scales up and down.
Nice piece: Two things to note
– The Clintons, Bush & Obama presided over this mess and aided in it's creation but the albatross
of abuse is being hung on Trump.
– He shares an enormous egotistical blind spot common to tech workers. He wants unionization and
strength for tech workers but seems to advocate for a globalized work force. More than anything
else, foreign workers are responsible for wage suppression in the US. Is he saying 'Tech workers
are special and should be pampered but others should work for $1.85 per day"?
– The above points are not germaine to his central theme, which is important and well written.
But it does raise questions about his values.
" Boycotts won't work, since opting out of a site like Google means opting out of much of modern
life ."
Good .Opt out of modern life. Now. Get as far away from it as you possibly can. You'll be the
better person for it. There was a time I felt 'modern life' was the place to be .Now the older
me realizes 'modern life' is a sham, an illusion, and a trap.
A very cleverly designed trap, and one in which the cattle to be slaughtered all believe they
are choosing their own destiny even as they are herded inexorably closer to the slaughterhouse.
Amusingly, although my younger naive and idealistic self had a significant part to play in
the great tech revolutions and evolutions through the 90's and early 2000's (for which I will
be eternally regretful and ashamed, given how the creations we labored on have been whored out
by the pimps in the oligarchy and government) I was also incredibly lucky to have grown up on
a farm and learned how to use a hoe, a hand powered washing machine, how to gather eggs and grow
things.
Real things, things that can feed people. But more importantly .how to grow things like spirit
and independence that do not rely on any flow of electrons to come to glorious fruition.
I also so much better understand what that prophet Edward Abbey was trying to warn us about
all those decades ago .
" Growth for the sake of growth is the ideology of the cancer cell "
Indeed. The promise of technology has devolved into Clickbait Nation - where millions mindlessly
click on endless deceptive headlines like rats pushing levers in a giant Skinner box.
Is "opting out" really an option? Are we willing to opt out out of modern medicine too?
Whether we like it or not, we aren't opting out of using the internet, so we aren't opting out
of anything this author talked about .
Sooooo ..wouldn't a better idea be to learn as much as we can about this technology and get
involved in its decision making, so that we can control it and make it work for rather than against
us?
I've had that debate before, people typically starting with the 'well, you are posting using
the Internet so you aren't really opting out of anything', but thats a simplistic approach, and
the process of opting out is a matter of degrees – it is never a binary on/off.
One can continue 'opting out' of aspects of society, and technology, to as extreme a position
as you wish .even back to the stone age, should you choose. (sort of the ultimate boycott)
Tradeoffs are inherent to the process, no argument there .just be aware that the experience
of opting out is itself liberating. You realize all these shiny objects, and expensive things,
and
complicated processes that you have been raised to think of as critical necessities that cannot
ever EVER be parted with .may not be so critical as you think.
Sometimes the tradeoffs will be negative, more often – in my experience – (once you have solved
the problems presented by improvising/adapting/overcoming) you will find the 'tradeoffs' are
a net positive.
You are, of course, a creature with free will and free to do what you choose . opt in, opt
out .as you will. :)
Agreed, there are several gradations to this whole opting out thing. I for one am completely
absent from any social media platform and feel no loss whatsoever because of this. It takes a
committed group of independent thinkers to deconstruct and debunk this whole narrative that you're
either "all-in" with these internet platforms or you opt out and life passes you by as you're
consigned to an existence of irrelevance and ignorance about the world around you.
If by social media we are talking facebook, instagram et al, then I have never participated
in any of those. To be sure, this is not meant to sound like I take a dim view on those who do,
the point is the narrative is typically framed, at least in my part of the world, as an all-in/opt-out
binary in which participation in social media platforms is a prime determinant in who "remains
relevant" and who doesn't
I'm not sure what you think you are opting out of. If you are on the internet, then you have
to have a carrier – Verizon, Comcast, etc. Do you think their data collection systems are different
than what Google, Facebook, or any other social media does?
Yea I think the truly open minded probably try many of the internet platforms just to see what
they are like and then delete their accounts (this does not need to entail posting one's entire
private life there needless to say). Not a lot of open mindedness out there really though, it's
all extremes: rigid abstinence from it all, or hopeless addiction to it.
I mean I understand a priori rejection of the majority of what capitalism produces (except
if it's necessary to life then well), but it is a pretty uninformed position from which to criticize
(as is being addicted to it really).
Even if you opt out personally, you're still going to be interacting with a lot of people,
businesses, governments, etc., that are dependent on the Five Horsemen. Pay cash at the local
business, but travel down the supply chain that brought the goods there and you'll run into someone
using cloud storage, social media, consumer surveillance data, etc.
Ordinary folks have really only two ways to do this. One is in their consumer choices. Avoid
or boycott companies that abuse their customers – hit them in their wallets. The other is in their
voting and political participation push privacy rights, antitrust enforcement, etc. higher on
the political agenda.
It's entirely possible to be comfortably social without "social media". Personally, I boycott
Facebook, Twitter, and (as much as possible) Google and Ebay. Google is tough because they have
infiltrated the schools with Google Classroom (which has value, but do we really want an internet
advertising company to be gathering data on our children?). Microsoft is tough because of the
Office monopoly, but just because I have to use it at work doesn't mean I need to pay them any
money anywhere else in my life There are also ways to buy online without using Amazon.
There are other search engines, browsers, email services, etc. besides those operated by the
giants. DuckDuckGo, protonmail, and the Opera browser (with free built-in VPN!) work well for
me.
The problem is, if these other services ever do get popular enough, the tech giants will either
block them by getting their stooges appointed to Federal agencies and regulating them out of existence,
or buy them.
I've been running from ISP acquisitions for years, as the little guys get bought out I have
to find an even littler one. Luckily I've found a local ISP, GWI, that I've used for years now.
They actually came out against the new regulations that would allow them to gather and sell their
customers' data. Such anathema will probably wind up with their CEO publicly flayed for going
against all that is good and holy according to the Five Horsemen.
There are two sides to opting out.
When net neutrality is gone, then capital and market concentration will transform the internet
into what cable TV is now, and nobody will need it much.
Contrariwise the big tech companies are taking over the implementation of major social functions:
– if you can't vote without the internet
– if you can't spend your money without the internet
– if you can't contact your friends without the internet
– if you can't get news without the internet - this has already happened - just look at us all
here.
– if you can't join a political party without liking it on your Facebook page and following it
on Twitter - there are rumors that the Federal Liberal Party in Canada is exploring this.
As I said somewhere else, all this would amount to an uncontracted and unspecified public/private
partnership (various ones, actually) and all entered into unexamined. Time to examine them while
they're still easy to change.
To assume that workers in ANY Industry (including tech where we know the big players have rigged
the labor market against tech workers) have more power than consumers seems pretty unrealistic
to me. Of course consumer power is one dollar one vote and hardly democratic but at least consumers
do have options and some power. The employee role is a powerless one in the U.S..
We can either continue on the knowledge economy road, where our personal data is commodified.
Or we could fight for a knowledge society, where we collectively access knowledge while protecting
our identity and privacy. I vote for the latter.
Google would plant a chip in every child if they could. Short of that, they have insinuated
themselves in public schools, hoping that every kid in America will consummate their relationship
with this giant after they graduate from k-12. See this NY Times article from last weekend:
How Google Took Over the Classroom
It's hard to mitigate their reach. In a landmark student privacy law passed in California (with
an
even weaker version passed in my state of Oregon), they built in what I call a Google exemption
clause.
( 8) Nothing in this section shall be construed to impose a duty upon:
(a) A provider of an electronic store, gateway, marketplace or other means of purchasing or downloading
software or applications to review or enforce compliance with this section by those applications
or software; or
(b) A provider of an interactive computer service to review or enforce compliance with this section
by third-party content providers. As used in this paragraph, "interactive computer service" means
any information service, system or access software provider that provides or enables computer
access by multiple users to a computer server, including specifically a service or system that
provides access to the Internet and such services or systems operated or offered by libraries
or educational institutions.
(9) This section does not apply to general audience Internet websites, general audience online
services, general audience online applications or general audience mobile applications, even if
login credentials created for an operator's site, service or application may be used to access
those general audience sites, services or applications.
The Campaign for a Commercial-Free Child and the Parent Coalition for Student Privacy (a group
with which I have worked) just put out a
Parent Toolkit for Student Privacy .
We can either continue on the knowledge economy road, where our personal data is commodified.
Or we could fight for a knowledge society, where we collectively access knowledge while protecting
our identity and privacy. I vote for the latter.
When I am not accessing knowledge, I would still prefer to remain private.
For example, what videos I access for entertainment should private. It's not knowledge I access,
just something to pass time.
That those activities should b protected as well.
Privacy-protected-society is probably a broader term than knowledge society.
I had another
topic lined up today, but this (
hat
tip alert reader ChrisAtRU
) is so remarkable - and so necessary to
frame
contextualize immediately - I thought I should bring it your
attention, dear readers. The headline is
"Toward a Marshall Plan for America
," the authors are a gaggle of CAP
luminaries with Neera Tanden leading and Rey Teixeira trailing, and the
"Marshall Plan" indeed includes something called a "Jobs Guarantee." Of
course, I trust Clinton operatives like Tanden, and Third Way types like
Teixeira, about as far as I can throw a concert grand piano. Nevertheless,
one sign of an idea whose time has come is that sleazy opportunists and
has-beens try to get out in front of it to seize credit[1] and stay
relevant. So, modified rapture.
In this brief post, I'm going to look at the political context that drove
CAP - taking Tanden, Teixeira, and the gaggle as a proxy for CAP - to
consider a Jobs Guarantee (JG), briefly describe the nature and purpose of a
JG, and conclude with some thoughts on how Tanden, Teixeira would screw the
JG up, like the good liberals they are.
Political Context for CAP's JG
Let's begin with the photo of Prairie du Chien, WI at the top of CAP's JG
article. Here it is:
I went to Google Maps Street View, found
Stark's Sports Shop
(and Liquor Store), and took a quick look round
town. Things don't look too bad, which is to say things look pretty much
like they do in my own home town, in the fly-over state of Maine; many local
businesses. The street lamps make my back teeth itch a little, because along
with bike paths to attract professionals, they're one of those panaceas to
"bring back downtown," but as it turns out Prairie du Chien has marketed
itself to summer tourists quite successfully as "
the
oldest Euro-American settlement established on the Upper Mississippi River,"
so those lamps are legit! (Of course, Prairie du Chien, like so much of
flyover country,
is fighting an opioid problem
, but that doesn't show up in Street View,
or affect the tourists in any way.)
In 2012, [Lydia Holt] voted for Barack Obama because he promised her
change, but she feels that change hasn't reached her here. So last year
she chose a presidential candidate unlike any she'd ever seen, the
billionaire businessman who promised to help America, and people like
her, win again. Many of her neighbors did, too .
In this corner of middle America, in this one, small slice of the
nation that sent Trump to Washington, they are watching and they are
waiting, their hopes pinned on his promised economic renaissance. And if
four years from now the change he pledged hasn't found them here, the
people of Crawford County said they might change again to someone else.
"[T]hings aren't going the way we want them here," she said, "so we
needed to go in another direction."
And the issues:
[Holt] tugged 13 envelopes from a cabinet above the stove, each one
labeled with a different debt: the house payment, the student loans, the
vacuum cleaner she bought on credit.
Lydia Holt and her husband tuck money into these envelopes with each
paycheck to whittle away at what they owe. They both earn about $10 an
hour and, with two kids, there are usually some they can't fill. She did
the math; at this rate, they'll be paying these same bills for 87 years.
Kramer said she's glad the Affordable Care Act has helped millions get
insurance, but it hasn't helped her he and her husband were stunned to
find premiums over $1,000 a month. Her daughter recently moved into their
house with her five children, so there's no money to spare. They opted to
pay the penalty of $2,000, and pray they don't get sick until Trump, she
hopes, keeps his promise to replace the law with something better.
Among them is a woman who works for $10.50 an hour in a sewing
factory, who still admires Obama, bristles at Trump's bluster, but can't
afford health insurance. And the dairy farmer who thinks Trump is a jerk
- "somebody needs to get some Gorilla Glue and glue his lips shut" - but
has watched his profits plummet and was willing to take the risk.
So that's Prairie du Chien, Wisconsin. CAP frames the electoral context
this way:
While the election was decided by a small number of votes overall,
there was a significant shift of votes in counties in critical Electoral
College states, including Iowa, Michigan, Ohio, Pennsylvania, and
Wisconsin.
(I could have told them that.
In fact, I did!
) And the reasons for the shift:
What was going on in these heavily white working-class counties that
might explain support for Trump? Without diminishing the importance of
cultural and racial influences, it is clear to us that lingering [sic]
economic pressures among important voting blocs helped to create a larger
opening for Trump's victory.
We do not yet know the exact reasons for the drop in turnout among
young people and black voters. But with President Obama not on the ticket
to drive voter enthusiasm, it is quite possible that lingering job and
wage pressures in more urban areas with lots of young people, and in
areas with large populations of African-Americans, yielded similar, if
distinct, economic anxiety in ways that may have depressed voter turnout
among base progressives. The combined effect of economic anxiety may have
been to drive white noncollege voters toward Trump and to drive down
voter engagement and participation among base progressives.
Either way, issues related to lost jobs, low wages, high costs, and
diminished mobility played a critical role in setting the stage for a
narrow populist victory for Trump.
(I could have told them that, too.
In fact, I did!
) Note the lingering
"Obama Coalition"
/
identity
politics
brain damage that casually assumes "base progressives" equate
to African-Americans and youth. Nevertheless, mild kudos to CAP for fighting
through to the concept that "economic pressures among important voting blocs
helped to create a larger opening for Trump's victory." The CAP paper then
goes on to recommend a JG as an answer to such "economic pressures."[2]
How would the JG work from the perspective of a working person (not an
owner?) Or from the perspective of the millions of permanently
disemployed?
The MMT Primer
:
If you are involuntarily unemployed today (or are stuck with a
part-time job when you really want to work full time) you only have
three choices:
Employ yourself (create your own business-something that
usually goes up in recessions although most of these businesses
fail)
Convince an employer to hire you, adding to the firm's
workforce
Convince an employer to replace an existing worker, hiring you
The second option requires that the firm's employment is below
optimum-it must not currently have the number of workers desired to
produce the amount of output the firm thinks it can sell. …
If the firm is in equilibrium, then, producing what it believes it
can sell, it will hire you only on the conditions stated in the third
case-to replace an existing worker. Perhaps you promise to work
harder, or better, or at a lower wage. But, obviously, that just
shifts the unemployment to someone else.
It is the "dogs and bones" problem: if you bury 9 bones and send 10
dogs out to go bone-hunting you know at least one dog will come back
"empty mouthed". You can take that dog and teach her lots of new
tricks in bone-finding, but if you bury only 9 bones, again, some
unlucky dog comes back without a bone.
The only solution is to provide a 10
th
bone. That is
what the JG does: it ensures a bone for every dog that wants to hunt.
It expands the options to include:
There is a "residual" employer who will always provide a job to
anyone who shows up ready and willing to work.
It expands choice. If you want to work and exhaust the first 3
alternatives listed above, there is a 4
th
: the JG.
It expands choice without reducing other choices. You can still try
the first 3 alternatives. You can take advantage of all the safety net
alternatives provided. Or you can choose to do nothing. It is up to
you.
If I were one of the millions of people permanently disemployed, I
would welcome that additional choice. It's certainly far more humane than
any policy on offer by either party. And the JG is in the great tradition
of programs the New Deal sponsored, like the CCC, the WPA,
Federal Writers' Project
, and the
Federal Art Project
. So what's not to like? (
Here's
a list
of other JGs). Like the New Deal, but not temporary!
Intuitively: What the JG does is set a baseline[3] for the entire
package offered to workers, and employers have to offer a better package,
or not get the workers they need. When I came up here to Maine I'd quit
my job voluntarily and so wasn't eligible for unemployment. Then the
economy crashed, and I had no work (except for blogging) for two years.
There were no jobs to be had. I would have screamed with joy for a
program even remotely like this, and I don't even have dependents to take
care of. It may be objected that the political process won't deliver an
offer as good as the Primer suggests. Well, don't mourn. Organize. It may
be objected that a reform like the JG merely reinforces the power of the
0.01%. If so, I'm not sure I'm willing to throw the currently disemployed
under the bus because "worse is better," regardless. Anyhow, does
"democratic control over the living wage"
really
sound all that
squillionaire-friendly to you? Aren't they doing everything in their
power to fight anything that sounds like that? The JG sounds like the
slogan Lincoln ran on, to me:
"Vote yourself a farm!"
[3]
So, what does the JG for the economy? MMT was put together by
economists; from an economists perspective, what is it good for? Why did
they do that?
The Primer
once more:
some supporters emphasize that a program with a uniform basic
wage[4] also helps to promote economic and price stability.
The JG/ELR program will act as an automatic stabilizer as
employment in the program grows in recession and shrinks in economic
expansion, counteracting private sector employment fluctuations. The
federal government budget will become more counter-cyclical because
its spending on the ELR program will likewise grow in recession and
fall in expansion.
Furthermore, the uniform basic wage will reduce both inflationary
pressure in a boom and deflationary pressure in a bust. In a boom,
private employers can recruit from the program's pool of workers,
paying a mark-up over the program wage. The pool acts like a "reserve
army" of the employed, dampening wage pressures as private employment
grows. In recession, workers down-sized by private employers can work
at the JG/ELR wage, which puts a floor to how low wages and income can
fall.
Research by Pavlina Tcherneva and Rania Antonopoulos indicates that
when asked, most people want to work. Studying how job guarantees
affect women in poor countries, they find the programs are popular
largely because they recognize-and more fairly distribute and
compensate-all the child- and elder care that is now often performed
by women for free (out of love or duty), off the books, or not at all.
We propose today a new jobs guarantee, and we further expect a
robust[3] agenda to be developed by the commission.
The low wages and low employment rates for those without college
degrees only exist because of a failure of imagination. There is no
shortage of important work that needs to be done in our country. There
are not nearly enough home care workers to aid the aged and disabled.
Many working families with children under the age of 5 need access to
affordable child care. Schools need teachers' aides, and cities need
EMTs. And there is no shortage of people who could do this work. What has
been missing is policy that can mobilize people.
To solve this problem, we propose a large-scale, permanent program of
public employment and infrastructure investment-similar to the Works
Progress Administration (WPA) during the Great Depression but modernized
for the 21st century. It will increase employment and wages for those
without a college degree while providing needed services that are
currently out of reach for lower-income households and cash-strapped
state and local governments. Furthermore, some individuals may be hired
into paying public jobs in which their primary duty will be to complete
intensive, full-time training for high-growth, in-demand occupations.
These "public apprenticeships" could include rotations with public and
private entities to gain on-the-ground experience and lead to guaranteed
private-sector employment upon successful completion of training.
Such an expanded public employment program could, for example, have a
target of maintaining the employment rate for prime-age workers without a
bachelor's degree at the 2000 level of 79 percent. Currently, this would
require the creation of 4.4 million jobs. At a living wage-which we can
approximate as $15 per hour plus the cost of contributions to Social
Security and Medicare via payroll taxes-the direct cost of each job would
be approximately $36,000 annually. Thus, a rough estimate of the costs of
this employment program would be about $158 billion in the current year.
This is approximately one-quarter of Trump's proposed tax cut for the
wealthy on an annual basis.
With tis background, let's look at how liberals would screw the JG up.
How a CAP JG Would Go Wrong
Before getting into a little policy detail, I'll examine a few
cultural/framing issues. After all, CAP
does
want the program's
intended recipients to accept it with good grace, no? Let me introduce the
over-riding concern, from Joan C. Williams in
The Financial Times
:
"They don't want compassion. They want respect"
:
Williams warns that Republican errors alone won't give Democrats back
the WWC.
Or any part of the WC; as even CAP recognizes, although WWC
disproportionately voted Trump, and non-WWC disproportionately stayed home.
While [Williams] agrees that the Democrats have mobilised their base
since Trump's election, she has "one simple message" for the party: it
needs to show the WWC respect, "in a tone suitable for grown-ups".
Democrats must say: "We regret that we have disrespected you, we now hear
you." She asks: "Is this so hard? Although the risk is that the response
will be, 'Oh, those poor little white people with their opioid epidemics,
let's open our hearts in compassion to them.' That's going to infuriate
them. They don't want compassion, they want respect."
To show respect, it would really behoove liberals to deep-six the phrase
"economic anxiety," along with "economic frustrations," "economic concerns,"
"economic grievances," and "lingering economic pressures."[4] All these
phrases make successful class warfare a psychological condition, no doubt to
be treated by a professional (who by definition is not anxious, not
frustrated, has no grievances, and certainly no economic pressures, because
of their hourly rate (or possibly their government contract).
To show respect, it would also behoove liberals to deep-six the concept
that markets come first; people who sell their labor power by the hour tend
to be sensitive about such things. Take, for a tiny example, the caption
beneath the image of Prairie du Chein. Let me quote it:
A customer crosses the street while leaving a shop along the main
business district in Prairie du Chien, Wisconsin, January 2017.
Really? A
customer
? Does the human figure have to be a
customer
? Why?
Along the same lines, drop the "affordable" crap; ObamaCare should have
ruined that branding already; what seems like it's affordable to CAP writers
in the Beltway probably isn't affordable at all to somebody making $10 an
hour. Anyhow, if something like childcare or for that matter #MedicareForAll
ought to be a universal direct material benefit, then deliver it!
To show respect, abandon the "Marshall Plan" framing immediately. Because
it means the "winners" are going to graciously help the "losers," right? And
prudentially, liberals don't really want to get the working class asking
themselves who conducted a war against them, and why, right?
To show respect, make the JG a truly universal benefit, a real guarantee,
and don't turn it into an ObamaCare-like Rube Goldberg device of
means-testing, worthiness detection, gatekeeping, and various complex forms
of insult and degradation, like narrow networks. This passage from CAP has
me concerned:
Such an expanded public employment program could, for example, have
a target
of maintaining the employment rate for prime-age
workers without a bachelor's degree at the 2000 level of 79 percent.
That 'target" language sounds to me very much like the "dogs and bones"
problem. Suppose currently we have 6 bones and 10 dogs. The "target" is 7
bones. Suppose we meet it? There are still 3 dogs without bones! Some
guarantee! The JG should be simple: A job for everyone who wants one. None
of this targeting or slicing and dicing demographics. The JG isn't supposed
to be an employment guarantee for macro-economists (who basically have one
anyone).
To show respect, make the JG set the baseline for wages (and working
conditions). This passage from CAP has me concerned:
Second, because it would employ people to provide services that are
currently needed but unaffordable, it would not compete with existing
private-sector employment.
This language seems a bit slippery to me. If Walmart is paying $10.00 an
hour, is the JG really going to pay $9.50?
Finally, you will notice that the CAP JG is shorn of any macro-economic
implications. Note, for example, that replacing our current cruel system of
regulating the economy by throwing people out of work isn't mentioned. Note
also that CAP also accepts the false notion that Federal taxes pay for
Federal spending. That puts CAP in the austerity box, meaning that the JG
might be cut back just when it is most needed, not least by working people.
Conclusion
I do want to congratulate CAP, and without irony, for this passage:
[The JG] would provide the dignity of work, the value of which is
significant. When useful work is not available, there are large negative
consequences, ranging from depression, to a decline in family stability,
to "deaths of [sic] despair."
It's good to see the Case-Deaton study penetrating the liberal hive mind.
Took long enough. Oh, and this makes the JG a moral issue, too. The pallid
language of "economic anxiety" should be reformulated to reflect this, as
should the program itself.
NOTES
[1] The JG originally comes from the MMT community;
here is a high-level summary
. Oddly, or not, there's no footnote
crediting MMTers. Interestingly, Stephanie Kelton, who hails from the
University of Missouri at Kansas City's MMT-friendly economics department,
before Sanders brought her onto the staff at the Senate Budget committee,
was not able to persuade Sanders of the correctness and/or political utility
of MMT generally or the JG in particular.
[2] I guess
those famous Democrat 2016 post mortems
will
never
be
published, eh? This will have to do for a poor substitute. Or maybe the
Democrats just want us to read
Shattered
.
[3] In my view, "robust" is a bullshit tell. Back when I was a hotshot
consultant, the operational definition of "robust" was "contained in a very
large three-ring binder."
[4] Dear God. Are these people demented? Nobody who is actually under
"economic pressure" would use these words. And so far as I can tell,
"lingering" means permanent.
About Lambert Strether
Readers, I have had a correspondent characterize my views as realistic
cynical. Let me briefly explain them. I believe in universal programs
that provide concrete material benefits, especially to the working class.
Medicare for All is the prime example, but tuition-free college and a
Post Office Bank also fall under this heading. So do a Jobs Guarantee and
a Debt Jubilee. Clearly, neither liberal Democrats nor conservative
Republicans can deliver on such programs, because the two are different
flavors of neoliberalism ("Because markets"). I don't much care about the
"ism" that delivers the benefits, although whichever one does have to put
common humanity first, as opposed to markets. Could be a second FDR
saving capitalism, democratic socialism leashing and collaring it, or
communism razing it. I don't much care, as long as the benefits are
delivered. To me, the key issue - and this is why Medicare for All is
always first with me - is the tens of thousands of excess "deaths from
despair," as described by the Case-Deaton study, and other recent
studies. That enormous body count makes Medicare for All, at the very
least, a moral and strategic imperative. And that level of suffering and
organic damage makes the concerns of identity politics - even the worthy
fight to help the refugees Bush, Obama, and Clinton's wars created -
bright shiny objects by comparison. Hence my frustration with the news
flow - currently in my view the swirling intersection of two, separate
Shock Doctrine campaigns, one by the Administration, and the other by
out-of-power liberals and their allies in the State and in the press - a
news flow that constantly forces me to focus on matters that I regard as
of secondary importance to the excess deaths. What kind of political
economy is it that halts or even reverses the increases in life
expectancy that civilized societies have achieved? I am also very hopeful
that the continuing destruction of both party establishments will open
the space for voices supporting programs similar to those I have listed;
let's call such voices "the left." Volatility creates opportunity,
especially if the Democrat establishment, which puts markets first and
opposes all such programs, isn't allowed to get back into the saddle.
Eyes on the prize! I love the tactical level, and secretly love even the
horse race, since I've been blogging about it daily for fourteen years,
but everything I write has this perspective at the back of it.
Yes, a great essay. And thank you commentariat.
Of course, there is a potential conflict from those who want a basic
income, but don't want to work. Such a position frames such people
badly, but a basic income remains an essential part of a JG world IMO.
The JG would provide incentive if you didn't lose the safety net and
could add to it by working in a JG program.
Most here in this place accept that a sovereign government can pay for
programs which are not funded by taxes (or debt) and the JG and basic
income concepts could be a way to test this in a controlled way.
The main reason I think that politicians continue to have blinkers (LA
LA, CAN'T HEAR YOU) with respect to MMT is that they are scared
witless of a government with unlimited spending powers. That's why we
can't have nice things.
don't want to work, hmm I don't even know if I could work in a
job without a decent amount of slack (A.D.D. mind may not be
capable of it or something and often not for lack of trying, though
I do a decent amount of unpaid work in my precious leisure time).
Or at least not the full 40 hours, so if the job guarantee bosses
are slave drivers, I don't know, I'd probably be fired from my job
guaranteed job period.
But what if a job was aligned with one's interest? Don't know,
never experienced that.
But all that aside and never even mind unemployment, given how
horrible the job circumstances are that I see many people caught in
(and I definitely don't mean having slack – that's a good thing, I
mean verbal ABUSE, I mean working endless hours of unpaid overtime
etc.), any alternative would seem good.
The "target" language also makes me worry that they're defining optimal
employment by the inflation-obsessed standards of Chicago-school economists,
thus coming up short in the name of protecting the investor class.
Minor quibble: Does Maine constitute flyover country? Usually that term
means the parts of the country that the well-to-do "fly over" from east
coast cities to west coast ones, with perhaps an exception for Chicago. You
wouldn't fly over Maine for any of those routes. Not to mention, Maine is a
popular vacationing/summer home state for rich New Englanders, so it doesn't
exactly have an "other" status for them the way rural Wisconsin would.
I think Maine is legit flyover country as flying over Maine was once
mandatory on the transatlantic route in order to Gander Airport in
Newfoundland. I know, I know, it's a bit of a stretch but I'm trying
here!
As for Maine's other status, you're spot on about "down east"
(coastal) Maine and some of the lakes being popular with the landed
gentry, but the interior of the state is sparsely populated, poor, white,
and marginalized. Many of the paper mills have gone belly-up and the
economy in many places consists of picking potatoes or cutting down
trees.
I used to do a lot of business travel to Nova Scotia. Hard to get
there from the US without flying over Maine. But I think Lambert meant
flyover in the pejorative "why would you live here when you could be an
artisanal pickle maker in Brooklyn" sense.
Matt Bruenig had other issues with the article:
More Job Guarantee Muddle
. While he points out that the jobs
suggested in the article should be permanent rather than temporary jobs,
I go on with my own little sense of discomfort that they all involve
putting the otherwise jobless in charge of caring for the helpless. I
don't find that a good idea. I've spent enough time both working with and
volunteering in human service organizations to have observed that it's
not really appropriate work for a lot of people, even for many
good-hearted volunteers. It really dampens my enthusiasm for a JG that I
have yet to see an argument for it that doesn't invoke child and elderly
care as just great jobs that the jobless can be put to doing.
Just another quibble with this post. I first heard of a job guarantee
and heard arguments for it in the U.S. civilian society from Michael
Harrington in the early 1980s (guaranteed jobs have been a feature of the
state capitalist societies that call themselves socialist throughout the
20th c.), so I don't find it particularly odd when the MMT community
isn't mentioned as originating the idea. In fact, I tend to respond with
"Hey, MMTers, learn some history."
Thanks for this article Lambert. Why should we trust CAP to handle this
when they have done nothing toward this end in their entire history. In
fact, in undeniable fact, if we don't do something about demand in this
country we will have no economy left at all. For these guys to even approach
a JG you know they are panicked. Nobody goes over this fact because it turns
them all into instant hypocrites. I spent yesterday listening to some MMTers
on U-Tube, Wray and some others. They all clearly and succinctly explain the
systemic reasons for JG. Not nonsense. In fact, MMT approaches a JG as the
opposite of nonsense on so many levels. As you have pointed out – these CAP
people are a little late to reality. And their dear leader Obama is first in
line for the blame, followed closely by Bill Clinton and his
balance-the-budget cabal of bankster idiots. And etc. And these JG jobs
could be just the jobs we need to turn global warming around. It could be
the best spent money ever. It is a very straight-forward calculation.
I don't know how you even bother. America is so far away from this
intellectually and culturally, there is no chance. Right now the "jobs
guarantee" is get arrested for something bogus and be sentenced to prison to
do forced labor for outsourcing corporations (yes this is real). Look where
the GOP stands on basic issues which were settled long ago in Europe, they
are in the Stone age. The Dems are right wing everywhere else.
With US institutions usually run horribly how do you expect this to be
well run? Is the VA a shining example? I certainly would not have hope for
this at the federal level.
I feel the same way often but I've got to allow myself some hope once
in a while. This development is at least turn in the right direction for
the moment, nothing else. There's nothing wrong with being
(aprehensively) pleased about that.
I'd like to get a basic unemployment welfare scheme going first. We
don't even have that! We have an "insurance" program which requires
you to first have held a job which paid enough for long enough, and
then get fired, not quit. And it only pays for six months. Again, this
was settled in other rich countries a long time ago.
There is a job guarantee in Castro's Cuba. So wonderful, people are
swimming from Miami to Havana ever day.
Though you have it exactly right in the US the job guarantee is to
be a felon on a privatized prison farm usually called a "plantation". I
am looking forward to my neighbors finally being put to work. At least it
is only building a Presidential Library for Obama, not a pyramid for
Pharaoh.
My prediction: by the time this makes it through Congress, it will be a
guarantee for no more than 15 hours per week at slightly below the minimum
wage and you'll only be able to be in the program for nine months,
total during your lifetime. Or am I being overly cynical?
Maybe we need to update that old saw: "First they ignore you, then they
laugh at you, then they co-opt your idea and strip the soul out of it, then
you kinda win but not really, but hey that's progress, right?"
Even though I'm cynical, I'm with Lambert in being for just about
anything that makes us bottom-20%ers lives better, even if it is highly
flawed. Heck, I'd even be for a BIG on that basis, even if Yves is right
about the negative side-effects of that policy.
If I understood correctly, Norway is running such a program since many
years.
Basically, when you are out of a job, you get unemployment benefits (a low
but decent salary, health care and other modern facilities unheard of is the
US) – which last
forever
.
On the other hand, any public institution can call you in to help a hand:
washing dishes at the school kitchen one day, waiting on the elderly the
other day, helping out in the local library wherever hands are needed but
not available.
So it is not really a JG, but you are guaranteed to help out your local
community, and you are guaranteed a minimal income. That seems close enough
to me.
Thanks, Lambert, for a very interesting post. I combed through CAP's
panel of "experts." I was not impressed.
I'm going to start my own think tank. Gonna call it CRAP: Center for Real
American Progress.
Of course in the north in the winter you could go back to shoveling snow
with snow shovels (no machines allowed) and ban use by public employees of
riding lawnmowers in the summer in favor of powered walk behind mowers. From
what I have read this is what china did on the 3 gorges dam, partly making
the project a jobs project by doing things in a human intensive way. (of
course you could go back to the hand push non powered reel mower but then
you have to worry about folks and heart attacks. (Or use those in their 20s
for this. Growing up in MI and In this is how we mowed the yard. (in the
1950s and 1960) and for snow shoveling, my dad got a snow blower when I went
off to college.
Now if you really want a low productivity way of cutting grass get one of
the hand grass trimmers and set to work cutting it by that, it would employ
a lot of folks and not have the exertion problem of a push mower (Again I
used these in the 1960s in MI before we had the string trimmers and edgers
etc. (also recall the old hand powered lawn edgers.)
It sounds like the CAP JG proposal is "top down" in that the "palette" of
jobs to be funded is decided by the same agency (or an agency at the same
level of government) as the fund disbursement authority, or is specified in
the law itself.
IIRC, the JG concept proposed in the MMT primer would devolve the
decision of "how to usefully employ willing underutilized workers" to local
level. Funding would still be Federal. There would be some kind of "request
for proposals/peer review" process to decide which locally-wanted projects
would receive JG dollars (presumably in order to be a guarantee, enough
projects would be approved for every locality to employ the available
under-utilized willing workforce. If a locality only proposed one project,
that would be funded)
It that right, Lambert? Is "top down" another way that centrists could
screw up a JG? And might the "local devolution" aspect of the NEP/MMT Primer
concept appeal to folks on the right?
Great write up. I obviously have a long-running disagreement on the
policy prescription of JG, but I do find it interesting talking about how
groups like CAP present it outside the specific confines of MMT (and,
apparently, without even tipping the hat to them ?).
One concrete bit of info I would love to know is how they estimate 4.4
million workers for take-up. First, it's a hilarious instance of false
precision. Second, it's remarkably low. $15/hr is approximately the median
wage. Tens of millions of workers would sign up, both from the ranks of the
crap jobs and from the ranks of those out of the labor force.
"... "The minute you to start talking about the inequality of opportunity, you fuel the politics of anger. The politics of anger have a tendency to produce improbable results. The major risk is that we don't know how much we've strained the underlying system. But what we do know is we are getting signals that suggest it's under enormous stress, which means the probability of either a policy mistake or market accident goes up." ..."
"... Third, pockets of extreme indebtedness must be addressed, a lesson he learned working with the IMF in Latin America in the 1980s. "When you have a debt overhang, it's like a black cloud," he argues. "It sucks oxygen out of the system. You cannot grow of it: whether it's Greece or student loans in the US, you need to deal with debt overhangs." The process of debt forgiveness is hard, he concedes, because some people are unfairly rewarded – "but the alternatives are worse." ..."
Leading economist and investor believes world leaders, and global capitalism, have reached
fork in road between equality and chaos
This is the nub of El-Erian's analysis of why the developed world is approaching a fork in the
road. The inequality generated by the current low-growth climate has three elements: inequality of
wealth, income and opportunity. The last of the three – manifested in high youth unemployment in
many eurozone countries, for example – is the most explosive element.
"The minute you to start talking about the inequality of opportunity, you fuel the politics
of anger. The politics of anger have a tendency to produce improbable results. The major risk is
that we don't know how much we've strained the underlying system. But what we do know is we are getting
signals that suggest it's under enormous stress, which means the probability of either a policy mistake
or market accident goes up."
... ... ...
How do we take the high, benign road? El-Erian has a four-point plan.
First, "we need to get back to investing in things that promote economic growth, infrastructure,
a more pro-growth tax system for the US, serious labour retooling ... If you're in Europe, youth
employment is an issue you've really got to think about very seriously."
Second, countries that can afford to do so must "exploit the fiscal space," meaning borrowing
to invest or cutting taxes. He puts the US and Germany unambiguously in that category "and to a certain
extent the UK".
Third, pockets of extreme indebtedness must be addressed, a lesson he learned working with
the IMF in Latin America in the 1980s. "When you have a debt overhang, it's like a black cloud,"
he argues. "It sucks oxygen out of the system. You cannot grow of it: whether it's Greece or student
loans in the US, you need to deal with debt overhangs." The process of debt forgiveness is hard,
he concedes, because some people are unfairly rewarded – "but the alternatives are worse."
Fourth, regional and global governance needs repair. He compares the eurozone to a stool with
one-and-a-half legs instead of four. The complete leg is monetary union, the half is banking union.
The missing legs are fiscal integration, meaning a common budget, and political harmonisation. No
wonder the eurozone is unstable, he says: "You can do three legs, you can't do one and half."
To return to El-Erian's core T-junction analogy, none of the required manoeuvres sound easy. "You
don't need a big bang," he replies. "If you want to take the good turn you have to see some progress
on some of these elements. If you don't, then we take the other turn." He ascribes equal probabilities
– "it's a political judgment."
What's an investor to do? El-Erian says his own approach, which he admits is hard for the average
person to copy, is framed like a bar-bell. At one end, he's invested in high-risk startups where
you don't need all to succeed. At the other, he's in cash and cash-like investments. In the middle,
he'll invest in public markets only tactically.
"... Weinstein argues that the GUI agenda (inspired by Reaganomics) sought to prevent these salary increases. He contends that the legislation that enabled this oversupply was the Immigration Act of 1990 that expanded the H-1B nonimmigrant visa program and instituted employment-based immigration preferences. ..."
"... As I show in my book Sustainable Prosperity in the New Economy? , the beginning of the end of CWOC was the transformation of IBM, the world's leading computer company, from OEBM to NEBM from 1990 to 1994. In 1990, with 374,000 employees, IBM still bragged about its adherence to the CWOC norm (calling it "lifelong employment"), claiming that the company had not laid off anyone involuntarily since 1921. By 1994 IBM had 220,000 employees, and, with senior executives under CEO Louis Gerstner themselves getting fired for not laying off employees fast enough, CWOC was history. Over the course of the 1990s and into the 2000s, other major Old Economy companies followed IBM's example, throwing out of work older employees, many of them highly educated and with accumulated experience that had previously been highly valued by the companies. ..."
"... The salaries of S&E employees tended to increase with years of experience with the company, with a defined-benefit pension (based on years of service and highest salary levels) in retirement. These types of secure employment relations, and the high and rising pay levels associated with them, were the norm among established high-tech companies in the mid-1980s, but, as exemplified by IBM's transformation, started to become undone in the early 1990s, and were virtually extinct a decade later, as Old Economy companies either made the transition to the NEBM, or disappeared.8 The culprit in the weakening in the demand for, and earnings of, S&E PhDs from the early 1990s was the demise of CWOC-a phenomenon that Weinstein (and Teitelbaum) entirely ignore. ..."
"... As exemplified by IBM in the 1990s and beyond, a company's stock price could be raised by laying off expensive older workers and using the resultant "free" cash flow (as the purveyors of MSV called it) to do stock buybacks. 12 ..."
"... "But the company is "returning" capital to shareholders who never gave the company anything in the first place; the only time in its history that Apple has ever raised funds on the public stock market was $97 million in its 1980 IPO." ..."
"... During that period, the only job market for native PhD STEM students became the American Defense and Intelligence agencies, because they required security clearances and US Citizenship. I found myself driven in those directions too. ..."
"... Technology for the most part is just increasing complexity and increasing complexity has diminishing returns. With energy becoming less available, we probably need a lot less complexity. ..."
"... I wouldn't say that there is a lack of R&D - it just isn't done in-house any more. Gone are the Bell Labs and the Xerox PARCs; welcome to the brave new world of university partnerships and non-profit R&D shops (most famous: the Southwest Research Institute). ..."
"... Basically the rich are waging class war. That's the problem no matter how you slice and dice this one. This whole "New Economy" has been one big war on wages. I mean look at the collusion too between Google, Apple, and Intel to keep wages low. ..."
"... Basically it comes down to, the rich are really greedy. The issue right now for the rich is that they are desperate to keep the looting from happening, while people are increasingly aware that the system is against them. Bernie Sanders got a lot of support in the Valley and while it is a very Democratic leaning area, I cannot imagine that Trump's anti-H1B and L1B stance would have been opposed by the average employee. I think that the rich are not going to concede anything and that there needs to be some sort of solidarity union amongst all workers. ..."
"... Is there a single person here who has worked on Wall Street (writ large) who can convince us that his job or his company had an overall positive effect on the US and/or world economy over five years, ten years, or twenty-five years? ..."
"... Its not just PhDs. I know several Engineers who advise their children to do something else. It's just not worth the amount of effort that is required to be put into it and there is no future hope of a turn around. As bad as it is for graduates today, it's only going to get worse. ..."
"... They're catching up with us arts and humanities majors. Sad! ..."
"... I am a civil engineer and one of my daughters is studying to become a structural engineer. I would not have advised her to go into engineering because of the problem with the H-1B visas. ..."
"... But who am I to advise? Who can know the future? The world is just changing too fast now to really be able to advise our children on what careers to take. Besides, one of the advantages of studying engineering as you can work anywhere in the world. ..."
"... Post WWII labor overplayed its hand by the 1970's. Corporations and their decided they had had it. Corps and management proceeded to change the rules of the game on everything -- courts, trade, taxation and regulation. These countermeasures have had disastrous long term consequences. Corporations now run the country in a fascist manner. Government capture has created myriad problems beyond financialization, only one tool in the corporate quiver. Oligopolies across most to all industries comes to mind. Rail, air, health insurance, banking, defense, telecom, entertainment . ..."
"... Not sure about the labor part overplaying their hand. They just wanted an even wage and productivity rise. It is capital IMO that has overplayed its hand and the rise of neoliberal economics which has led to declines in public R&D spending. There isn't anything like the Space Race anymore. ..."
"... Frankly, labour underplayed its hand. At one point it had capital by the throat, and should have finished it off then. If peace is not an option, you should utterly and permanently destroy your enemy. ..."
"... Labor did NOT overplay its hand after WW2 - Taft-Hartley was a HUGE smack-down to labor after the privations of the Depression followed by the war effort. The decent wages during the post-war period were part of a concerted effort to convince workers that they didn't need unions and to be complacent. ..."
"... Labor leadership certainly became corrupt from all the money sloshing around without global competition due to war devastation of Europe and Japan, the Cold War, and the death throes of colonialism, but this was not due to "overplaying" their hand. ..."
"... Contrary to popular belief, in aggregate U.S. corporations fund the stock market, not vice versa. Note that almost all of the buybacks in the decade 1976-1985 occurred in 1984 and 1985 after in November 1982 the U.S. Securities and Exchange Commission adopted Rule 10b-18 that gave license to massive buybacks, in essence legalizing systemic stock-price manipulation and the looting of the U.S. business corporation. ..."
"... Actually though, watching the train wreck that is the outlook for the youngest generation today, provides some grim amusement. For instance noting that the "bubble-driven" economy composed of companies desperate to prevent their stock becoming "badly diluted" by having fire sales on capitol and expertise that probably took their predecessors decades to build can really only have one outcome. Depression, misery, socialism. Maybe we skip the Mao route this time, maybe not. ..."
"... Gregory Peck: "The Robber Barons of old at least left something tangible in their wake - a coal mine, a railroad, banks. THIS MAN LEAVES NOTHING. HE CREATES NOTHING. HE BUILDS NOTHING. HE RUNS NOTHING. And in his wake lies nothing but a blizzard of paper to cover the pain. Oh, if he said, "I know how to run your business better than you," that would be something worth talking about. But he's not saying that. He's saying, "I'm going to kill you because at this particular moment in time, you're worth more dead than alive." https://www.youtube.com/watch?v=xJRhrow3Jws ..."
"... IBM. Poster child of everything wrong at the executive-level and the shareholder-level. ..."
"... Yes, the IBM reference is interesting.The author gives an ordinal lead to IBM as a mover from the OEBM to NEBM. I ask myself if, from a mere one large corporation managing perspective, this was IBM's 11th hour response to the by then devastating rise of its competitors like Apple & Microsoft. ..."
"... Also the irony that it did not help IBM at least in the midterm. So, IBM was the prime mover to initiate some aspects of a model change -change which every major player adhered to- in response to a new technological disadvantage vs. competitors, and in turned did not seem to do much for IBM in the immediate years. Although, if I recall well, IBM was immersed in many political battles and internal problems, legal and otherwise. Nevertheless, I doubt there was a historic inevitability on IBM's ordinal force. Outstanding work by Lazonick ..."
"... "IBM is the poster child for shenanigans. Last month, IBM reported its 20th quarter in a row of declining year over year revenues .. a 13% drop in earnings, profit margins that declined in every business segment ( much worse than expected ), free cash flow that plummeted over 50% year over year and an earnings "beat" of 3 cents per share. How could this "beat" happen? .. a negative tax rate of -23% . This is why they pay the CEO Rometti the big bucks ( estimated at $50 to $65 million last year)." ..."
"... And this is one of the Bluest of the Blue Chip companies in the world. ..."
"... Amazon has lost money every fucking quarter for the last 20 fucking years, and that Bezos motherfucker is the king. ..."
"... In addition, the rise of 401(k) based investing, in which workers are tax-incentivized to buy in to the corporate stock scheming, but lack the normal shareholder voice in corporate governance, has taken the chains off the looters as well. ..."
"... The impact on the Grads was secondary a byproduct of a larger agenda which included the transfer offshore and consolidation of "IP" of the entire American, EU and Asian industrial economies along with the withdrawl of capital, while at the same time intentionally sabotaging future innovations with the handicap of diversity. Who got the loot and capital? Usual suspects. ..."
At the outset of his paper, Weinstein argues that:
Long term labor shortages do not happen naturally in market economies. That is not to say that
they don't exist. They are created when employers or government agencies tamper with the natural
functioning of the wage mechanism.
The contention, written from the perspective of the late 1990s, is that in the first half of the
1990s an oversupply ("a glut") of science and engineering (S&E) labor that depressed the wages of
PhD scientists and engineers was primarily the result of the promotion of a government-university-industry
(GUI) agenda, coordinated by the National Science Foundation under the leadership of Erich Bloch,
head of the NSF from 1984 to 1990. Beginning in 1985, the NSF predicted a shortfall of 675,000 S&E
personnel in the U.S. economy over the next two decades. According to a study by the NSF's Policy
Research and Analysis (PRA) division, quoted by Weinstein, salary data show that real PhD-level pay
began to rise after 1982, moving from $52,000 to $64,000 in 1987 (measured in 1984 dollars). One
set of salary projections show that real pay will reach $75,000 in 1996 and approach $100,000 shortly
beyond the year 2000.
Weinstein argues that the GUI agenda (inspired by Reaganomics) sought to prevent these salary
increases. He contends that the legislation that enabled this oversupply was the Immigration Act
of 1990 that expanded the H-1B nonimmigrant visa program and instituted employment-based immigration
preferences. Given that most of these foreigners came from lower-wage (Asian) nations, it is
assumed that they were attracted to work in the United States by what for them were high wages, whereas
Americans with S&E PhDs began to shun S&E careers as the salaries became less attractive.1
There is a lot missing from Weinstein's perspective, which is also the perspective of demographer
Michael Teitelbaum, who Weinstein cites extensively and who was at the Sloan Foundation from 1983
to 2013, rising to Vice-President in 2006. Weinstein and Teitelbaum view the salaries of scientists
and engineers as being determined by supply and demand on the labor market ("the natural wage rate"
and "the natural functioning of the labor market"). From this (neoclassical) perspective, they completely
ignore the "marketization" of employment relations for S&E workers that occurred in the U.S. business
sector from the mid-1980s as well as the concomitant "financialization" of the U.S. business corporation
that remains, in my view, the most damaging economic problem facing the United States. This transformation
of employment relations put out of work large numbers of PhD scientists and engineers who previously
had secure employment and who enjoyed high incomes and benefits as well as creative corporate careers.
The marketization of employment relations brought to an end of the norm of a career with one company
(CWOC)-an employment norm that was pervasive in U.S. business corporations from the 1950s to the
1980s, but that has since disappeared. 2 The "financialization" of the corporation, manifested by
massive distributions to shareholders in the forms of cash dividends and stock buybacks, undermined
the opportunities for business-sector S&E careers.
The major cause of marketization was the rise of the "New Economy business model" (NEBM) in which
high-tech startups, primarily in information-and-communication technology (ICT) and biotechnology,
lured S&E personnel away from established companies, which offered CWOC under the "Old Economy business
model" (OEBM). As startups with uncertain futures, the New Economy companies could not realistically
offer CWOC, but instead enticed S&E personnel away from CWOC at Old Economy companies by offering
these employees stock options on top of their salaries (which were typically lower than those at
the Old Economy companies). The stock options could become extremely valuable if and when the startup
did an initial public offering (IPO) or a merger-and-acquisition (M&A) deal with an established publicly-listed
company.
The rise in S&E PhD salaries from 1982 to 1987, identified in the NSF study that Weinstein quotes,
was the result of increased demand for S&E personnel by New Economy companies, with some of the increase
taking the form of stock-based pay, which in the Census data drawn from tax returns is lumped in
with salaries.3 Competing with companies for S&E personnel, the rise of the NEBM in turn put pressure
on salaries at Old Economy companies as they tried to use CWOC to attract and retain S&E labor in
the face of the stock-based alternative. By the last half of the 1980s, this New Economy competition
for talent was eroding the learning capabilities of the corporate research labs that, in many cases
from the early twentieth century, had been a characteristic feature of Old Economy companies in a
wide range of knowledge-intensive industries. 4
The CWOC norm under OEBM had provided employment security and rising wages from years-of-service
with the company and internal promotion of S&E personnel (significant proportions of whom in science-
based companies had PhDs). As I show in my book Sustainable Prosperity in the New Economy?
, the beginning of the end of CWOC was the transformation of IBM, the world's leading computer
company, from OEBM to NEBM from 1990 to 1994. In 1990, with 374,000 employees, IBM still bragged
about its adherence to the CWOC norm (calling it "lifelong employment"), claiming that the company
had not laid off anyone involuntarily since 1921. By 1994 IBM had 220,000 employees, and, with senior
executives under CEO Louis Gerstner themselves getting fired for not laying off employees fast enough,
CWOC was history. Over the course of the 1990s and into the 2000s, other major Old Economy companies
followed IBM's example, throwing out of work older employees, many of them highly educated and with
accumulated experience that had previously been highly valued by the companies.
Already in the early 1990s, the marketization of employment relations was responsible for a precipitous
decline of employment at the corporate research labs that had underpinned the twentieth-century growth
of Old Economy high-tech companies, of which IBM was an exemplar. In 1993, a conference held at Harvard
Business School decried the "end of an era" in industrial research, with papers from the conference
appearing in a volume Engines of Innovation , published in 1996.5 In the introductory chapter,
entitled "Technology's Vanishing Wellspring," conference organizers and volume editors Richard Rosenbloom
and William Spencer argued that industrial research (as distinct from product development) of the
type that had been carried out by corporate labs in the "golden era" of the post- World War II decades
"expands the base of knowledge on which existing industries depend and generates new knowledge that
leads to new technologies and the birth of new industries." In the more competitive environment of
the 1980s and 1990s, however, in the new industries of "biotechnology, exotic materials, and information
products (and services based on them)", Rosenbloom and Spencer observed that it was more difficult
for companies "to keep new technologies fully proprietary", and hence "research activities have been
downsized, redirected, and restructured in recent years within most of the firms that once were among
the largest sponsors of industrial research." 6
There is little doubt that S&E PhDs were major victims of this transformation. But the problem
that they, along with most other members of the U.S. labor force, have faced is not simply the marketization
of employment relations. For reasons that I have fully described in my publications cited above,
the transition from OEBM to NEBM was accompanied by the "financialization" of the U.S. business corporation
as, from the last half of the 1980s, U.S. boardrooms and business schools embraced the ideology that,
for the sake of superior economic performance, a business enterprise should be run to "maximize shareholder
value" (MSV). Instead of retaining employees and reinvesting in their productive capabilities, as
had been the case when CWOC had prevailed, MSV advocated and legitimized the downsizing of the company's
labor force and the distribution of corporate revenues to shareholders in the forms of both cash
dividends and stock repurchases. 7
With the demise of CWOC, older employees were the most vulnerable, not only because they tended
to have the highest salaries, but also because the shift from OEBM to NEBM was a shift from proprietary
technology systems, in which employees with long years of experience were highly valued, to open
technology systems that favored younger workers with the latest computer-related skills (often acquired
by working at other companies). Under CWOC, older employees were more expensive not because of a
"natural wage rate" that was the result of supply and demand on the S&E labor market, but because
of the internal job ladders that are integral to a "retain-and-reinvest" resource-allocation regime.
The salaries of S&E employees tended to increase with years of experience with the company, with
a defined-benefit pension (based on years of service and highest salary levels) in retirement. These
types of secure employment relations, and the high and rising pay levels associated with them, were
the norm among established high-tech companies in the mid-1980s, but, as exemplified by IBM's transformation,
started to become undone in the early 1990s, and were virtually extinct a decade later, as Old Economy
companies either made the transition to the NEBM, or disappeared.8 The culprit in the weakening in
the demand for, and earnings of, S&E PhDs from the early 1990s was the demise of CWOC-a phenomenon
that Weinstein (and Teitelbaum) entirely ignore.
With the rise of NEBM, companies wanted employees who were younger and cheaper , and that
was the major reason why at the end of the 1980s the ICT industry pushed for an expansion of H-1B
nonimmigrant visas and employment-based immigration visas. It is not at all clear that an influx
of PhDs from foreign countries via these programs was undermining the earnings of S&E PhDs in the
early 1990s. Most H-1B visa holders had Bachelor's degrees when they entered the United States. At
the same time, large numbers of non-immigrant visa holders entered the United States on student visas
to do Master's and PhD degrees, and then looked to employment on H-1B visas to enable them to stay
in the United States for extended periods (up to seven years).9 It was in response to the availability
of advanced- degree graduates of U.S. universities that in 2005 an additional 20,000 H-1B visas were
added to the normal cap of 65,000. Without the influx of foreign students into U.S. S&E Master's
and PhD programs, many of these programs would not have survived. Through this route, the H-1B visa
program has made more foreign-born PhDs available to corporations for employment in the United States.
But I posit that it has been the demise of OEBM and rise of the NEBM, not an increased supply of
foreign-born PhDs, that has placed downward pressure on the career earnings of the most highly educated
members of the U.S. labor force.
Besides giving employers access to an expanded supply of younger and cheaper high-tech labor in
the United States, the H-1B visa along with the L-1 visa for people who had previously worked for
the employer for at least one year outside the United States have another valuable attribute for
employers: the person on the visa is immobile on the labor market-he or she can't change jobs-whereas
under NEBM the most valued high-tech workers are those who are highly mobile. This mobility of labor
can boost the worker's pay package but is highly problematic for a company that needs these employees
to be engaged in the collective and cumulative learning processes that are the essence of generating
competitive products. Under OEBM, CWOC was the central employment institution for college-educated
workers precisely because of the need for collective and cumulative learning. But it was the rise
of NEBM, not the Immigration Act of 1990, that undermined CWOC. The growing dominance of NEBM with
its open systems architectures then led employers to make increased use of H-1 and L-1 visas in the
1980s, prompting them to get behind an expanded cap for H-1B visas in the Immigration Act of 1990.
10
Once OEBM was attacked by NEBM, with its offer of stock-based pay, these corporations became fertile
territory for the adoption of the ideology that a company should be run to "maximize shareholder
value" (MSV). This momentous transformation in U.S. corporate governance occurred from the late 1980s,
legitimizing the transition from a "retain-and-reinvest" to a "downsize-and-distribute" corporate-
governance regime. In the 1990s and beyond, this corporate-governance transformation laid waste to
CWOC across corporate America, knowledge-intensive companies included. 11 With corporate research
eroding as high-tech personnel responded to the lure of stock-based pay from NEBM companies- including
not only startups but also those such as Intel, Microsoft, Oracle, Sun Microsystems, and Cisco Systems
that during the 1990s grew to employ tens of thousands of people, most of them with stock- based
pay-senior executives at the Old Economy high-tech companies began to see their company's stock price
as not only key to the size of their own stock-based pay packages but also as an instrument to compete
for a broad-based of high-tech personnel. As exemplified by IBM in the 1990s and beyond, a company's
stock price could be raised by laying off expensive older workers and using the resultant "free"
cash flow (as the purveyors of MSV called it) to do stock buybacks. 12
As I have documented in detail, over the past three decades this legalized looting of the U.S.
business corporation has only gotten worse. As shown Table 1, driven by stock buybacks, net equity
issues by U.S. nonfinancial corporations were, in 2015 dollars, minus $4.5 trillion over the
decade 2006-2015. In 2016 net equity issues were minus $586 billion. Net equity issues are new stock
issues by companies (in this case nonfinancial corporations) minus stock retired from the market
as the result of stock repurchases and M&A deals. The massively negative numbers in recent decades
are the result of stock buybacks. I have calculated net equity issues as a percent of GDP by decade
to provide a measure of the value of buybacks done relative to the size of the U.S. economy. In both
absolute inflation-adjusted dollars and as a percent of GDP, buybacks have become a prime mode of
corporate resource allocation in the U.S. economy. Contrary to popular belief, in aggregate U.S.
corporations fund the stock market, not vice versa. Note that almost all of the buybacks in the decade
1976-1985 occurred in 1984 and 1985 after in November 1982 the U.S. Securities and Exchange Commission
adopted Rule 10b-18 that gave license to massive buybacks, in essence legalizing systemic stock-price
manipulation and the looting of the U.S. business corporation.
Table 1: Net equity issues of nonfinancial corporations in the United States, 1946-2015, by
decade, in 2015 dollars, and as a percent of GDP
Decade
Net Equity Issues,
2015$ billions
Net Equity Issues
as % of GDP
1946-1955
143.2
0.56
1956-1965
110.9
0.30
1966-1975
316.0
0.58
1976-1985
-290.9
-0.40
1986-1995
-1,002.5
-1.00
1996-2005
-1,524.4
-1.09
2006-2015
-4,466.6
-2.65
Source: Board of Governors of the Federal Reserve System, Federal Reserve Statistical Release
Z.1, "Financial Accounts of the United States: Flow of Funds, Balance Sheets, and Integrated Macroeconomic
Accounts," Table F-223: Corporate Equities, March 9, 2017, at
https://www.federalreserve.gov/releases/z1/current/
.
Over the years 2006-2015, the 459 companies in the S&P 500 Index in January 2016 that were publicly
listed over the ten-year period expended $3.9 trillion on stock buybacks, representing 53.6 percent
of net income, plus another 36.7 percent of net income on dividends. Much of the remaining 9.7 percent
of profits was held abroad, sheltered from U.S. taxes. Mean buybacks for these 459 companies ranged
from $291 million in 2009, when the stock markets had collapsed, to $1,205 million in 2007, when
the stock market peaked before the Great Financial Crisis. In 2015, with the stock market booming,
mean buybacks for these companies were $1,173 million. Meanwhile, dividends declined moderately in
2009, but over the period 2006-2015 they trended up in real terms.
Among the largest repurchasers are America's premier high-tech companies. Table 2 shows the top
25 repurchasers over the decade 2006-2015. Among the companies that one would expect to employ large
numbers of S&E PhDs are Exxon Mobil, Microsoft, IBM, Apple, Cisco Systems, Hewlett Packard, Pfizer,
Oracle, Intel, General Electric, Johnson & Johnson, Chevron, and ConocoPhillips. We do not know the
historical numbers of S&E PhDs at these companies, but I hypothesize that numbers would be much higher
than they are if the companies were not financialized. Many of America's largest corporations
routinely distribute more than 100 percent of net income to shareholders, generating the extra
cash by reducing cash reserves, selling off assets, taking on debt, or laying off employees.13 As
I have shown, the only logical explanation for this buyback activity is that the stock-based pay
that represents the vast majority of the remuneration of senior corporate executives incentivizes
them to manipulate their companies' stock prices, leaving most Americans worse off. 14
Table 2: The 25 largest stock repurchasers among U.S.-based corporations, 2006-2015, showing
net income (NI) stock buybacks (BB), and cash dividends (DV)
Source: Calculated from data downloaded from Standard & Poor's Compustat database.
The Weinstein-Teitelbaum focus on a GUI design to expand the supply of S&E PhDs ignores the
transformations of corporate governance and employment relations that have decimated career employment
for this group of workers over the past three decades. At the same time, the channeling of trillions
of dollars of value created in U.S. nonfinancial corporations to the financial sector has opened
up jobs on Wall Street that can provide quick income bonanzas for highly-educated members of the
U.S. labor force, many of whom might have otherwise pursued S&E careers. Among the wealthiest
of these Wall Street players are corporate predators-euphemistically known as "hedge-fund activists"-who
have billions of dollars in assets under management with which they can attack companies to pump
up their stock prices through the implementation of "downsize-and-distribute" allocation regimes
and, even if it takes a few years, dump the stock for huge gains.15
In the case of Apple, we have shown how Carl Icahn used his wealth, visibility, hype, and influence
to take $2 billion in stock-market gains by buying $3.6 billion of Apple shares in the summer of
2013 and selling them in the winter of 2016, even though he contributed absolutely nothing of any
kind to Apple as a value-creating company.16 Apple CEO Tim Cook and his board (which includes former
U.S. Vice President Al Gore) helped Icahn turn his accumulated fortune into an even bigger one by
having Apple repurchase $45 billion in shares in 2014 and $36 billion in 2015-by far the two largest
one-year stock buybacks of any company in history. Imagine the corporate research capabilities in
which Apple could have invested, and the S&E PhDs the company could have employed, had it looked
for productive ways to use even a fraction of the almost unimaginable sums that it wasted on buybacks.17
From 2011 through the first quarter of 2017, Apple spent $144 billion on buybacks and $51 billion
on dividends under what it calls its "Capital Return" program. But the company is "returning" capital
to shareholders who never gave the company anything in the first place; the only time in its history
that Apple has ever raised funds on the public stock market was $97 million in its 1980 IPO. 18
A number of "hedge-fund activists"-Nelson Peltz of Trian, Daniel Loeb of Third Point, and William
Ackman of Pershing Square are among the most prominent-have been able to put up one or two billion
dollars to purchase small stakes in major high-tech companies, and, with the proxy votes of pension
funds, mutual funds and endowments, have been able put pressure on companies, often by placing their
representatives on the boards of directors, to implement "downsize-and-distribute" regimes for the
sake of "maximizing shareholder value."19 In the summer of 2013, Nelson Peltz's Trian Fund Management
bought DuPont stock worth $1.3 billion, representing 2.2% of shares outstanding. In May 2015 Peltz
lost a proxy fight to put four of his nominees on the DuPont board, but in October 2015 DuPont CEO
Ellen Kullman, who had opposed Peltz, resigned, and the new management began to implement Peltz's
plans to cut costs and hit financial targets, to be done in the context of a merger with Dow Chemical,
which had fallen into the hands of another corporate predator Daniel Loeb. Meanwhile, in October
2015, Peltz bought 0.8 percent of the shares of General Electric (GE), and began to pressure another
iconic high-tech company to cut costs and increase its stock price. GE was already a financialized
company that had done $52 billion in buybacks in the decade 2006-2015 (see Table 2)-a massive amount
of money for the purpose of manipulating its stock price. Undoubtedly responding to additional pressure
from Peltz, during 2016, GE, with profits of $8.0 billion, paid out $8.5 billion in dividends and
spent another $22.0 billion on buybacks. This financialization of U.S. high-tech corporations undermines,
among other things, the employment of S&E PhDs.
We need research on this subject to quantify its impacts. I submit, however, that such a research
agenda must focus on transformations of regimes of corporate governance and employment relations.
Relying on the neoclassical economist's notion of a "natural wage rate" determined by the interaction
of supply and demand, Weinstein, a mathematician, and Teitelbaum, a demographer, missed the transformations
in corporate governance and employment relations that marked the late 1980s and early 1990s-and beyond-and
as result, in my view, failed to understand the changing fortunes of S&E PhDs in the marketized,
globalized, and financialized New Economy. Given the dominance of what I have called "the myth of
the market economy"20 in the thought processes of economists, Weinstein and Teitelbaum were by no
means alone in erroneously focusing on supply and demand on the PhD labor market while failing to
recognize the centrality of corporate governance and employment relations in determining the earnings
and career prospects of S&E PhDs. It is time for new economic thinking on these critical questions.
Footnotes
1 The Weinstein paper appears to have been published prior to the adoption of the American
Competitiveness and Workforce
2 William Lazonick, Sustainable Prosperity in the New Economy? Business Organization and High-Tech
Employment in the United States, W. E. Upjohn Institute for Employment Research, 2009; ; William
Lazonick, "The New Economy Business Model and the Crisis of US Capitalism," Capitalism and Society,
4, 2, 2009: article 4; William Lazonick, Philip Moss, Hal Salzman, and Öner Tulum, "Skill Development
and Sustainable Prosperity: Collective and Cumulative Careers versus Skill-Biased Technical Change,"
Institute for New Economic Thinking Working Group on the Political Economy of Distribution Working
Paper No. 7, December 2014, at
https://www.ineteconomics.org/ideas-papers/research-papers/skill-development-and-sustainable-prosperity-cumulative-and-collective-careers-versus-skill-biased-technical-change
; William Lazonick, "Labor in the Twenty- First Century: The Top 0.1% and the Disappearing
Middle Class," in Christian E. Weller, ed., Inequality, Uncertainty, and Opportunity: The Varied
and Growing Role of Finance in Labor Relations, Cornell University Press, 2015: 143-192.
3 Almost all gains from exercising employee stock options and the vesting of employee stock
awards are taxed at the ordinary income-tax rate, not at the capital-gains tax rate, with taxes
withheld by the employer at the time that options are exercised or awards vest. Hence these stock-based
gains are reported as part of "wages, tips, other compensation" on IRS Form 1040.
5 Rosenbloom and Spencer, Engines of Innovation . Richard Rosenbloom was David Sarnoff
Professor of Business Administration at Harvard Business School, while William Spencer was CEO
of SEMATECH.
6 Ibid., pp. 2-3.
7 William Lazonick, "Profits Without Prosperity: Stock Buybacks Manipulate the Market and
Leave Most Americans Worse Off," Harvard Business Review , September 2014, 46-55; William
Lazonick, "Stock Buybacks: From Retain-and-Reinvest to Downsize-and-Distribute," Center for Effective
Public Management, Brookings Institution, April 2015 at
http://www.brookings.edu/research/papers/2015/04/17-stock-buybacks-lazonick.
8 Lazonick, Sustainable Prosperity , ch. 3. For an important case study that includes
the fate of the once renowned Bell Labs, see William Lazonick and Edward March, "The Rise and
Demise of Lucent Technologies," Journal of Strategic Management Education , 7, 4, 2011.
9 Lazonick, Sustainable Prosperity , ch. 5.
10 Ibid., ch. 2. Note that the H-1 visa for workers in specialty occupations was renamed the
H-1B visa in 1990 after the H-1A visa was created specifically for nurses.
11 Lazonick, "Stock Buybacks"; Lazonick, "Labor in the Twenty-First Century."
12 Lazonick, "Profits Without Prosperity"; Lazonick, "Stock Buybacks."
13 Lazonick, "Labor in the Twenty-First Century": William Lazonick, "How Stock Buybacks Make
Americans Vulnerable to Globalization," Paper presented at the Workshop on Mega-Regionalism: New
Challenges for Trade and Innovation, East-West Center, University of Hawaii, Honolulu, January
20-21, 2016, at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2745387
14 Lazonick, "Profits Without Prosperity."
15 Rachel Butt, "Here are some of the 10 biggest activist money managers and some of their
most impressive bets," Business Insider , June 17, 2016, at
http://www.businessinsider.com/top-10-biggest-activist-investors-2016-6. Matt Hopkins, William
Lazonick, and Jang-Sup Shin are engaged in research on the methods and gains of these predatory
value extractors.
19 With Matt Hopkins and Jang-Sup Shin, I am involved in project on how the U. S. SEC has
accommodated and even encouraged the corporate value extractors who call themselves "shareholder
activists" or "hedge-fund activists."
20 William Lazonick, Business Organization and the Myth of the Market Economy , Cambridge
University Press, 1991
It was indeed a tough article to read to the end, but this nugget near the end was worth it:
"But the company is "returning" capital to shareholders who never gave the company anything
in the first place; the only time in its history that Apple has ever raised funds on the public
stock market was $97 million in its 1980 IPO."
As one who actually lived this process, I can tell you that the premise of this article must
be basically true.
Back in the early '90s I set out to fill in the gaps of my own computer science background
(I'm actually an astrophysicist). And my classes were filled entirely by people from Asia, except
for myself and one other Anglo. Job ads in the journals were already beginning to ask for PhD
level CompSci with emphasis on, e.g., voice recognition, for a pay rate of $26K (1992 !). That
was definitely appealing to the foreign students and unappealing to American STEM students.
During that period, the only job market for native PhD STEM students became the American
Defense and Intelligence agencies, because they required security clearances and US Citizenship.
I found myself driven in those directions too.
Now, after many years doing my own thing, I look around at the STEM marketplace and I am shocked
to find large numbers of compatriots being pressured into the GIG Economy, and pay rates are appalling
by former standards. There is a serious lack of expenditure on research and development today.
There is a serious lack of expenditure on research and development today.
From another perspective this is just over investment in education. Technology for the
most part is just increasing complexity and increasing complexity has diminishing returns. With
energy becoming less available, we probably need a lot less complexity.
"American Defense". hmmm, wonder if sending the jobs and know-how to China and India in the
belief both will always be the US's willing subcontractors is such a good idea (from a US national
defense point of view).
I wouldn't say that there is a lack of R&D - it just isn't done in-house any more.
Gone are the Bell Labs and the Xerox PARCs; welcome to the brave new world of university partnerships
and non-profit R&D shops (most famous: the Southwest Research Institute).
Basically the rich are waging class war. That's the problem no matter how you slice and
dice this one. This whole "New Economy" has been one big war on wages. I mean look at the collusion
too between Google, Apple, and Intel to keep wages low.
Considering how slap on the wrist this was, what incentive is there to not do it again? They
know they can get away with this. Not to mention, this H1B and L1B program has become a way to
keep wages low in the technology sector. In many sectors, there really isn't a "shortage" of Americans.
Oh and for all the talk of these companies being "innovative", if they are prioritizing money
on stock buybacks over R&D, that's not really innovative as much as it is trying to boost salaries
by capitalizing on the huge cash reserves they get for being the dominant companies in their sector.
Same could be said about Exxon. Not much being spent on R&D means that they are more about rent
seeking rather than innovation. Perhaps not yet as blatant as those patent trolls, which are little
more than shell companies that sue other companies over patents, but that is their ideal business
model.
I think that at the end of the day, even though many engineers in the tech companies are in
the top 10% in terms of income percentile, their interests are closer aligned with working class
people. The other issue is that I bet when many of these engineers turn into their 40s, they are
going to witness first hand the very real age discrimination that exists in the technology industry.
Basically it comes down to, the rich are really greedy. The issue right now for the rich
is that they are desperate to keep the looting from happening, while people are increasingly aware
that the system is against them. Bernie Sanders got a lot of support in the Valley and while it
is a very Democratic leaning area, I cannot imagine that Trump's anti-H1B and L1B stance would
have been opposed by the average employee. I think that the rich are not going to concede anything
and that there needs to be some sort of solidarity union amongst all workers.
Is there a single person here who has worked on Wall Street (writ large) who can convince
us that his job or his company had an overall positive effect on the US and/or world economy over
five years, ten years, or twenty-five years?
I'll go first: three investment banks under my belt and one was a giant financial and moral
sucking machine called Citi. The other two were wannabe's but certainly did not add value.
While "maximizing shareholder value" is the huge problem wrecking our economy, having watched
the genesis of New Economic Paradigm through the experiences my wife and most of my friends going
through the Silicon Valley start-up Tulip-mania from the mid-'80's through the first decade of
th e 2000's, the author is hitting important points while over-simplifying and missing other equally
important points, such as the role of the "Peace Dividend" in the collapse of aerospace and research
funding, and the role of the Reagan and Clinton "tax reforms" in driving stock-based compensation
systems.
Early on, the use of stock-based compensation drove down wage-based compensation and increased
the role of financial speculators. Today, the speculators get the stock, but wages remain suppressed
and only foreign workers will accept them. The author is correct: the causes are complicated,
but the result drove down wages and job security for STEM workers.
I got my Ph.D. in biology in 2000. It was absolutely the worst decision in my life. In fact,
it actually destroyed my life, reducing me to near homelessness and starvation because-GASP--regular
employers (like office jobs, retail etc.) will not hire Ph.D.s. There there is the lovely student
debt that has grown exponentially, as my wages could not make the smallest dent. Convicted felons
make more that I do. So to make a long story short, I started a small on-line business 9 years
ago and got the FFFFF OUT of the rotten POS United States and moved to Ecuador, one of the most
progressive countries in the world. I cannot believe how the US abuses its national treasures-is
is truly a POS and I do not miss it for one day. I hope the US crashes and rots in hell.
Its not just PhDs. I know several Engineers who advise their children to do something else.
It's just not worth the amount of effort that is required to be put into it and there is no future
hope of a turn around. As bad as it is for graduates today, it's only going to get worse.
I am a civil engineer and one of my daughters is studying to become a structural engineer.
I would not have advised her to go into engineering because of the problem with the H-1B visas.
But who am I to advise? Who can know the future? The world is just changing too fast now
to really be able to advise our children on what careers to take. Besides, one of the advantages
of studying engineering as you can work anywhere in the world.
I bought houses for each of my children and told them if they wanted to go to college they
could trade the house in for the education. I personally think they should have considered keeping
the house and working minimum wage jobs that they enjoy. But both of them are pursuing educations,
my son to be history teacher!
Post WWII labor overplayed its hand by the 1970's. Corporations and their decided they
had had it. Corps and management proceeded to change the rules of the game on everything -- courts,
trade, taxation and regulation. These countermeasures have had disastrous long term consequences.
Corporations now run the country in a fascist manner. Government capture has created myriad problems
beyond financialization, only one tool in the corporate quiver. Oligopolies across most to all
industries comes to mind. Rail, air, health insurance, banking, defense, telecom, entertainment
.
But this paper is also lamenting a lack of business capex, which is directly correlated to
public investment. When you decided to offshore manufacturing and fail to invest in infrastructure
you get a double whammy that hits business capex. Increasing regulation and taxation on small
and midsize companies has lead to consolidation. Approximately 5000 public companies have likely
been consolidated. Sarbanes-Oxley added millions to compliance costs making it highly uneconomical
to be a public company with less than $300 million in revenue. Dodd-Frank has created increases
in cost for financial firms that had nothing to do with the crisis. In fact, the big banks have
benefited enormously from implementation of this legislation.
Not sure about the labor part overplaying their hand. They just wanted an even wage and
productivity rise. It is capital IMO that has overplayed its hand and the rise of neoliberal economics
which has led to declines in public R&D spending. There isn't anything like the Space Race anymore.
Frankly, labour underplayed its hand. At one point it had capital by the throat, and should
have finished it off then. If peace is not an option, you should utterly and permanently destroy
your enemy.
Labor did NOT overplay its hand after WW2 - Taft-Hartley was a HUGE smack-down to labor
after the privations of the Depression followed by the war effort. The decent wages during the
post-war period were part of a concerted effort to convince workers that they didn't need unions
and to be complacent.
Labor leadership certainly became corrupt from all the money sloshing around without global
competition due to war devastation of Europe and Japan, the Cold War, and the death throes of
colonialism, but this was not due to "overplaying" their hand.
The trends described in the post predate by decades the communist tyranny [/s] imposed by those
bills.
The wholesale closing or offshoring of corporate research labs already started in the 1980s,
driven in part by corporate raiders like Milken, Pickens and Icahn.
IBM, GM, Kodak, Xerox, GE they all had labs that provided jobs to STEM graduates
and a stream of discoveries and inventions to generate more jobs.
Now these are largely gone or substantially off-shored.
What has happened to corporate R&D shouldn't be used as an excuse to make life easier
for the Wall Street culture largely responsible for it.
Yes, any burdens imposed by Sarbanes Oxley are the fault of numerous unethical business executives
over recent decades, and not the fault of people in government.
When I was a student in IT, the shining stars at the firmament of industrial computer science
and engineering R&D were Xerox PARC, DEC SRC, ATT Bell Labs and IBM Yorktown Heights.
Contrary to popular belief, in aggregate U.S. corporations fund the stock market, not
vice versa. Note that almost all of the buybacks in the decade 1976-1985 occurred in 1984 and
1985 after in November 1982 the U.S. Securities and Exchange Commission adopted Rule 10b-18
that gave license to massive buybacks, in essence legalizing systemic stock-price manipulation
and the looting of the U.S. business corporation.
See Lazonick's footnoted paper for many loving particulars. Especially note the details of
how Rule 10b-18 offers no protection from abuse and (no news to NC readers) is a pillar of general
corporate asset-stripping .
Engineering long-term career arc has been an issue since at least my father's generation (those
born during WWI). Longer tenure (mid to late mid career) engineers were being eased out for young
grads. When I was in a ChemE program in the 70s, advice was to follow the engineering degree with
either law or a business degree because the odds of a long career doing engineering was not great.
No one advised going for a PhD in engineering.
When I asked him why he got the degree, which didn't seem necessary for someone who spent much
of his career in industrial R&D, he said, "I'm like Mallory climbing Mount Everest. I got that
degree because it is there."
So, there you have it. My old man getting that degree because he wanted to. And because my
mother was willing to support both of them while he worked on it.
"Many of America's largest corporations routinely distribute more than 100 percent of net income
to shareholders, generating the extra cash by reducing cash reserves, selling off assets, taking
on debt, or laying off employees the only logical explanation for this buyback activity is that
the stock-based pay that represents the vast majority of the remuneration of senior corporate
executives incentivizes them to manipulate their companies' stock prices "
This not only applies to the STEM sector, but nearly every large corp. in America. "Earnings
quality" (i.e stock price) takes precedence over everything else leading to the crapification
of products & services and devaluation of employees.
Thank gawd this type of thinking wasn't around when Jonas Salk was working on the polio vaccine.
" In November 1982 the U.S. Securities and Exchange Commission adopted Rule 10b-18 that
gave license to massive buybacks, in essence legalizing systemic stock-price manipulation and
the looting of the U.S. business corporation. "
How can you have "looting" without lootees? The stockholders aren't complaining. If any party
is being disadvantaged by borrowing to fund stock buybacks, it's existing bondholders. As David
Swensen describes in an extended example in Pioneering Portfolio Management , managers
compensated by stock options tend to treat corporate debt holders quite shabbily by piling on
more debt, compromising the interest coverage ratio.
High tech companies use stock buybacks to offset their widespread granting of stock options
which - absent Rule 10b-18 - would badly dilute existing stock holders over time.
Trying to paint the well-disclosed practice of stock buybacks as "looting" is histrionic ax
grinding on Lazonick's part. Over-leveraged companies are going to regret it in the next recession.
But that's a lamentable social phenomenon in a bubble-driven economy. Those who disagree with
it are free to sell short over-leveraged stocks - perhaps a more meaningful way of expressing
dissent than scribbling academic screeds.
Well Jim, ponzi schemes work pretty well for those at the top. I suppose we shouldn't worry
about it until we start getting complaints..
Actually though, watching the train wreck that is the outlook for the youngest generation
today, provides some grim amusement. For instance noting that the "bubble-driven" economy composed
of companies desperate to prevent their stock becoming "badly diluted" by having fire sales on
capitol and expertise that probably took their predecessors decades to build can really only have
one outcome. Depression, misery, socialism. Maybe we skip the Mao route this time, maybe not.
Here's some related "histrionics" of your channeling D.D . an excerpt of a debate about "creative
destruction" (emphasis mine) from 1991(context), chronologically, roughly following the tandem
of Ronnie and Maggie.
Gregory Peck: "The Robber Barons of old at least left something tangible in their wake
- a coal mine, a railroad, banks. THIS MAN LEAVES NOTHING. HE CREATES NOTHING. HE BUILDS NOTHING.
HE RUNS NOTHING. And in his wake lies nothing but a blizzard of paper to cover the pain. Oh, if
he said, "I know how to run your business better than you," that would be something worth talking
about. But he's not saying that. He's saying, "I'm going to kill you because at this particular
moment in time, you're worth more dead than alive."
https://www.youtube.com/watch?v=xJRhrow3Jws
Danny Devito: "Let's have the intelligence, let's have the decency to sign the death certificate,
collect the insurance, and invest in something with a future "Ah, but we can't," goes the prayer.
"We can't because we have responsibility, a responsibility to our employees, to our community.
What will happen to them?" I got two words for that: WHO CARES? Care about them? Why? They didn't
care about you. They sucked you dry. You have no responsibility to them. For the last ten years
this company bled your money. Did this community ever say, "We know times are tough. We'll lower
taxes, reduce water and sewer." https://www.youtube.com/watch?v=62kxPyNZF3Q
Yes, the IBM reference is interesting.The author gives an ordinal lead to IBM as a mover
from the OEBM to NEBM. I ask myself if, from a mere one large corporation managing perspective,
this was IBM's 11th hour response to the by then devastating rise of its competitors like Apple
& Microsoft.
Also the irony that it did not help IBM at least in the midterm. So, IBM was the prime
mover to initiate some aspects of a model change -change which every major player adhered to-
in response to a new technological disadvantage vs. competitors, and in turned did not seem to
do much for IBM in the immediate years. Although, if I recall well, IBM was immersed in many political
battles and internal problems, legal and otherwise. Nevertheless, I doubt there was a historic
inevitability on IBM's ordinal force. Outstanding work by Lazonick
"IBM is the poster child for shenanigans. Last month, IBM reported its 20th quarter in
a row of declining year over year revenues .. a 13% drop in earnings, profit margins that declined
in every business segment ( much worse than expected ), free cash flow that plummeted over 50%
year over year and an earnings "beat" of 3 cents per share. How could this "beat" happen? .. a
negative tax rate of -23% . This is why they pay the CEO Rometti the big bucks ( estimated at
$50 to $65 million last year)."
And this is one of the Bluest of the Blue Chip companies in the world.
I read IBM spent a fortune at that time defending itself against monopolistic claims litigation.
This was happening while Microsoft and Apple were clearly consolidating their oligopolistic empires.
I read reports stating Oracle initial breakthroughs were taken from IBM's research work.
Not sure if anyone watches "Silicon Valley", but here is a quote that seems fitting:
Season 2 – Bad Money
Richard: Once we get a few customers and start a subscription-revenue model.
Russ: What? Revenue? No, no, no, no, no. No. If you show revenue, people will ask "How much?"
And it will never be enough, but if you have no revenue, you can say you're pre-revenue. You're
a potential pure play. It's not about how much you earn, it's about what you're worth. And
who's worth the most? Companies that lose money. Pinterest, Snap chat No revenue. Amazon
has lost money every fucking quarter for the last 20 fucking years, and that Bezos motherfucker
is the king.
Just wanted to point out that there is one more link in the chain to be followed: the financiers
would not have such an easy time playing Nero with our economy, if the banking sector were still
properly constrained by a gold standard (=limited supply of printed credit), the risk of bank
runs by outraged consumers, the Glass-Steagall separation of commercial from investment banking,
personal rather than corporate punishment for fraud and abuse, antitrust enforcement, etc.
In addition, the rise of 401(k) based investing, in which workers are tax-incentivized
to buy in to the corporate stock scheming, but lack the normal shareholder voice in corporate
governance, has taken the chains off the looters as well.
It's time to end the impunity. The government has been corrupted by the corporations, so only
a populist uprising will produce reform. The uprising will require sacrifices of time, income,
security. It will require boycotts of products that people like, but whose producers and vendors
are evil. The products will not disappear while demand persists – but the producers and vendors
must be brought to heel.
Consider the following inductees into the Corporate Hall of Shame:
Wells Fargo – customer abuse
United Airlines – customer abuse
UBER – employee abuse; legal system abuse
Mylan (Epi Pens) – Monopolistic price abuse
Hewlett Packard (spyware on laptops) – customer abuse
pick an industry, you'll find a Hall of Shame candidate. Hit them all in the wallet until they
reform.
The impact on the Grads was secondary a byproduct of a larger agenda which included the
transfer offshore and consolidation of "IP" of the entire American, EU and Asian industrial economies
along with the withdrawl of capital, while at the same time intentionally sabotaging future innovations
with the handicap of diversity. Who got the loot and capital? Usual suspects.
Perhaps this report raises the possibility that this low
pressure low growth economy may actually lead to a new
high in the prime working age cohort, still with little
wage growth.
Boomers are retiring and that increases employment in
prime age (25-54) cohort. So to take only prime age is a
little bit disingenuous. This effect needs to be taken
into consideration.
Those who were born before 1950 were probably the most
numerous. They all will be over 67 at the end of the year.
"... By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development and Anis Chowdhury, former Professor of Economics, University of Western Sydney, who held various senior United Nations positions in New York and Bangkok. Originally published at Inter Press Service ..."
Yves here. Even though much of the material in this post will be familiar to
regular readers, some points are worth emphasizing. One defense regularly made
of globalization is that even though it has lowered income of less-skilled
workers in advanced economies (and even those of some skilled workers),
laborers in emerging economies have gained. This picture is simplistic. As
Joseph Stiglitz pointed out years ago, and the picture hasn't changed much,
China has captured all of the income gains by emerging economies. Poverty in
developing economies ex China hasn't budged. And the authors stress that
inequality has exploded in China.
By Jomo Kwame Sundaram, former UN Assistant Secretary General
for Economic Development and Anis Chowdhury, former Professor of Economics,
University of Western Sydney, who held various senior United Nations positions
in New York and Bangkok. Originally published at
Inter
Press Service
Income and wealth inequality has increased in recent decades, but
recognition of the role of economic liberalization and globalization in
exacerbating inequality has never been so widespread. The guardians of global
capitalism are nervous, yet little has been done to check, let alone reverse
the underlying forces.
Global Elite Alarmed by Growing Inequality
The World Economic Forum (WEF) has described severe income inequality as the
biggest risk facing the world. WEF founder Klaus Schwab has observed, "We have
too large a disparity in the world; we need more inclusiveness If we continue
to have un-inclusive growth and we continue with the unemployment situation,
particularly youth unemployment, our global society is not sustainable."
Christine Lagarde, IMF Managing Director, told political and business
leaders at the WEF, "in far too many countries the benefits of growth are being
enjoyed by far too few people. This is not a recipe for stability and
sustainability." Similarly, World Bank President Jim Yong Kim has warned that
failure to tackle inequality risked causing social unrest. "It's going to erupt
to a great extent because of these inequalities."
In the same vein, the influential US Council of Foreign Relations' journal,
Foreign Affairs
, carried an article cautioning, "Inequality is indeed
increasing almost everywhere in the post-industrial capitalist world . if left
unaddressed, rising inequality and economic insecurity can erode social order
and generate a populist backlash against the capitalist system at large."
Much Ado About Nothing?
Increasingly, the main benefits of economic growth are being captured by a
tiny elite. Despite global economic stagnation for almost a decade, the number
of billionaires in the world has increased to a record 2,199. The richest one
per cent of the world's population now has as much wealth as the rest of the
world combined. The world's eight richest people have as much wealth as the
poorer half.
In India, the number of billionaires has increased at least tenfold in the
past decade. India now has 111 billionaires, third in the world by country. The
largest number of the world's abject poor also live in the same country - over
425 million, a third of the world's poor, and well over a third of the
country's population.
Africa had a resource boom for a decade until 2014, but most people there
still struggle daily for food, clean water and health care. Meanwhile, the
number of people living in extreme poverty, according to the World Bank, has
grown substantially to at least 330 million from 280 million in 1990!
In Europe, poor people bore the brunt of draconian austerity policies while
bank bailouts mainly benefited the moneyed. 122.3 million people, or 24.4 per
cent of the population in the EU-28, are at risk of poverty. Between 2009 and
2013, the number of Europeans without enough money to heat their homes or cope
with unforeseen expenses, i.e., living with "severe material deprivation," rose
by 7.5 million to 50 million people, while the continent is home to 342
billionaires!
In the United States, the income share of the top one per cent is at its
highest level since the eve of the Great Depression, almost nine decades ago.
The top 0.01 per cent, or 14,000 American families, own 22.2 per cent of its
wealth, while the bottom 90 per cent, over 133 million families, own a meagre
four per cent of the nation's wealth. The top five per cent of households
increased their share of US wealth, especially after the 2008 financial crisis.
Meanwhile, the richest one per cent tripled their share of US income within a
generation.
This unprecedented wealth concentration and the corresponding deprivation of
others have generated backlashes, arguably contributing to the victory of
Donald Trump in the US presidential election, the Brexit referendum, the
strength of Marine Le Pen in France, the Alternative for Germany, and the
ascendance of the Hindutva right in secular India.
"Communist" China and Inequality
Meanwhile, China has increasingly participated in and grown rapidly as
inequality has risen sharply in the ostensibly communist-ruled country. China
has supplied cheaper consumer goods to the world, checking inflation and
improving living standards for many. Part of its huge trade surplus - due to
relatively low, albeit recently rising wages - has been recycled in financial
markets, mainly in the US, which helped expand credit at low interest rates
there.
Thus, cheap consumer products and cheap credit have enabled the slowly
shrinking "middle class" in the West to mitigate the downward pressure on their
living standards despite stagnating or falling real wages and mounting personal
and household debt.
China's export-led development on the basis of low wages has sharply
increased income inequality in the world's largest country for more than three
decades. Beijing is the new "billionaire capital of the world," no longer New
York. China now has 594 billionaires, 33 more than in the US!
Since the 1980s, income inequality in China has risen faster than most!
China now has one of the world's highest levels of income inequality, rising
mainly in the last three decades. The richest one per cent of households own a
third of the country's wealth, while the poorest quarter own only one per cent.
China's Gini coefficient for income rose to 0.49 in 2012 from 0.3 over three
decades before when it was one of the most egalitarian countries in the world.
Another survey put China's income Gini at 0.61 in 2010, greatly exceeding the
US's 0.45!
Global Elite Alarmed by Growing Inequality
is a rather
misleading, or rather, abbreviated, subhead. On suspects it should be
Global Elite Alarmed that Growing Inequality may not be Sustainable
.
Is there any evidence anywhere that Global Elites would want voluntarily to
reduce inequality?
The reality is the global elite are alarmed that inequality isn't high
enough, and fear having to give up a single dollar to the poors. There is no
measuring stick big enough to measure the elite's greed.
Apple workers in China are so abused and underpaid, I am waiting for a
factory rampage. When your sweat is stolen by Tim Cook colluding with the
criminal leaders of China to steal all your effort for themselves, that
would drive anyone nuts. Buying an Apple product means thousands of Chinese
slaves are tortured.
Proof: 1% in US keep on arguing how they only collect 20% of income
but pay 40% of taxes.
They don't seem to realize that if their income had stayed at 30x the
lowest paid instead of 300x, the lower paid would actually be paying more
taxes.
Second, the rich typically have low incomes relative to assets so if
taxes included assets, it would be interesting to see how that proportion
would change.
Furthermore, why should someone get waterfront property just because
of their birthright and have the audacity to tell the younger ones to
pick themselves up by their bootstraps? If society does not fix the
problem, Mother Nature will.
Chinese labor get's shot if they were to try and organize a fight
for better working conditions. The elite here and there conspire with
each other to profit from it.
Here is proof:
Meanwhile, China has increasingly participated in and grown
rapidly as inequality has risen sharply in the ostensibly
communist-ruled country. China has supplied
cheaper consumer
goods to the world, checking inflation and improving living standards
for many
. Part of its huge trade surplus - due to
relatively low
, albeit recently rising wages - has been
recycled in financial markets, mainly in the US, which helped expand
credit at low interest rates there.
Thus,
cheap consumer products and cheap credit
have enabled the slowly shrinking "middle class" in the West to
mitigate the downward pressure on their living standards despite
stagnating or falling real wages and mounting personal and household
debt.
China's export-led development on the basis of low wages has
sharply increased income inequality in the world's largest country for
more than three decades. Beijing is the new "billionaire capital of
the world," no longer New York. China now has 594 billionaires, 33
more than in the US!
There are suicide prevention nets in the stairwells and around the
building where Apple products are made. And they make really shitty
money, compared to what they put out.
Apple has what, a fifth of a trillion stashed "offshore". Where did
it come from? Right out of the sweat of those workers.
There is a fundamental difference between our politicians and
Chinese politicians.
In our system, narcissists are elected and are then surrounded by
psychopaths, in China it's a total brawl all the way to the top, so
they skip the narcissist step.
One way that inequality can be mitigated is by increasing government
spending to create jobs and improve infrastructure but forecasts of the
benefits can be manipulated to defeat such proposals by usually showing that
less than a dollar of GDP growth is returned for each dollar of spending.
Economists at North Carolina Sate U. have recently created an agnostic model
stripped of partisan bias of how government spending benefits GDP and they show
about $1.30 of GDP growth for each dollar spent. Let me quote (the original
paper is paywalled):
" most widely used model for predicting how U.S. government spending affects
gross domestic product (GDP) can be rigged using theoretical assumptions to
control forecasts of how government spending will stimulate the economy Based
on their observations, the researchers then developed an agnostic model, which
was designed to avoid those tweaks that predispose the results to support a
particular argument We found that the agnostic model predicts roughly $1.30 in
near-term GDP growth for each $1 in spending."
I think most of us realize the details of how to decrease inequality -
just as most of us thinking people realize that inequality increases
unemployment which increases inequality - so your comment falls upon those
who are tired with the oblivious who seem ignorant that the problem is not
with the HOW, it is with that bloody revolution which has yet to come!
Yeah, I've always wondered what factors, besides sheer greed, elite
inbreeding and stupidity, are responsible for the wide range of national GINI
rankings.
According to the CIA anyway, among the most equal are affluent Germany
(27.0) France (30.1) and Sweden (24.0), but also not-rich Albania (29.0)
Romania (27.3) and, most equal, Slovenia at 23.7.
The European Union as a whole is rated GINA 30.1. The handful of
non-European countries that crack the more equal list, strangely are, in
ascending order Kazakstan (28.9) Pakistan (29.6) South Korea (30.2) and
Australia (30.3).
Geographically, there is a swath of more-equal economies stretching from
Western Europe to North Africa, South-west Asia (middle east) through India,
Southeast Asia, Indonesia and Japan. This tends towards the idea that
old-world, culturally cohesive societies have an interest in maintaining
economies that promote inclusion and common interest. The Muslim barbarians and
European socialists are less prone to exploiting their neighbors or throwing
them overboard than we are, although Washington is working hard to remedy this
situation.
Canada and Australia have wisely plotted a course closer to their European
forbears than their American cousins.
Southern Africa, Latin America starting at the Rio Grande, China, Russia
(bordering much more equal Kazakhstan?) and of course the USA are the
heartlands of inequality. The common thread here, I presume, is their colonial
heritage.
There may be something to the argument about homogeneous societies having a
cultural advantage and all that, but England (32.4) and France, hardly
exemplars of racial tranquility, or Australia, India and Canada seem to say
otherwise.
The interesting thing seen easily on the map is that low income "developing"
countries, with exceptions like Hong Kong (53.7) have a large preponderance of
high GINI scores.
Middle-income China, Russia and Brazil, are joined by the always exceptional
United States as continental empires with extreme inequality.
I'm not sure Canada can survive without socialism.
If we use current economic productivity and efficiency models, it would
seem that North-South activity would make more sense than East-West. So from
my perspective, if we want Canada to work, we have to share and accept
higher costs and less material wealth to reach that goal.
The other issue we are facing capital from China let's say there are 10
million Chinese (we only have something like 12m households) who want to get
their money out and a few million Canadians who want to get rich selling
their house, you can imagine what kind of havoc the zirp/bailout/EZ money
policies have unleashed on small attractive countries like Canada.
And our leaders are still denying the impact of foreign capital on our
real estate market. Because these are the people who live in the overvalued
urban areas and quite happy to see their home values soar.
IMO, protectionism will need to rear its ugly head.
Remember, please, GINI scores do not accurately represent growing
inequality within countries, they just supposedly represent inequality
BETWEEN countries.
>>>"Meanwhile, China has increasingly participated in and grown rapidly as
inequality has risen sharply in the ostensibly communist-ruled country."
Participated in what?
We're the bottom of the barrel. They're the cream on top. But the vessel is
being overpressurized, accidentally on purpose. How much more can we take
before the Great Blowout?
Surprisingly, but not to me, is that New York State holds the worst GINA
rank at 49.9, a fact due not solely to the density of high income jerk-offs
like Trump who claim residence there, but to the density of truly impoverished
people that still remain in the five boroughs of NYC and the abandoned former
industrial cities of upstate New York.
Although they report a very high 21% "poverty" rate, NYC's Commission on
Equal Opportunity reports in 2012 that 40% of New York City families subsisted
on less than $34,000 annually. Anyone familiar with the absurd official poverty
thresholds, or the punishing cost of living in NYC for working people, well, do
your own math.
Suffice it to say, national GINI rankings tell only part of the story.
There is a whole other realm of study in qualifying GINI effects by state,
county, zip code or tract level.
Bernie did best in the most egalitarian states interesting. Rich people
vote more and if you are rich in an unequal state Bernie must sound like
Satan.
I guess you meant
more rich people vote
, but there're
hidden truths in
rich people vote more
which are worth
unpacking.
– In the US system, money talks. Rich people donate to support their
future benefactors, which buys MSM speech and advertising that sways
gullible votes to their side.
– Elected representatives are often in it to get rich, and are
certainly bought and paid for. So rich people get the votes on the
legislation that matters to them. The rest get representatives who simply
don't deliver on the policies and promises that they ran on. Obama.
I was also thinking that broad data like the above hide the obvious
solution. But I don't know how working from localities upward from towns to
counties to cities to states would technically work to redistribute income.
I know how they redistribute state tax money for the state's dept of
education – they pool the money and distribute it per pupil evenly across
all districts. The poorest districts getting the most help. So
redistribution of income via taxes would have to come from the tax
authority, i.e. the state. But that leaves local resources and solutions
unused. As unused as they are disenfranchised from neoliberal globalization.
It is just those very local communities that could be enlisted and employed
to clean up the environment and do it sustainably. The state could subsidize
cleanup. Organic farming. Artisans of all sorts. The fact that there is such
inequality, and the fact that we are awash in garbage, pollution, and
climate change seem to go hand in glove; and the mess is totally reversible.
But start at the local level.
Fresh water and arable land are becoming scarce and climate change
will only exacerbate the trend. People could be put to useful, gratifying
work using that suburban farmer's idea. Those large subsurban yards
covered in meticulous lawns could be put to use feeding the world.
Thanks for your great remarks and comments - should be highly informative
to many.
Also important to note - given the incredibly shrinking middle class in
America (which might not always appear that way in the purposely faulty
numerical data presented - or misrepresented) - that it is always worse than
it appears since such data derives from the Census Bureau, which tracks ONLY
wages, not income streams from capital gains (such as bonds and stocks,
etc.). This (purposely) skews the size of the middle class much larger than
it actually is - and it has been dramatically shrinking in America - as
those rich and super-rich show up listed as in the middle class,
economically.
Also, important to keep in mind that much supposed "data" comes from the
National Bureau of Economics Research (NBER), which has as an
emeritus
,
one Martin Feldstein from Harvard. Said Feldstein was a director at HCA when
they were hit with the largest out-of-court penalty settlement for their
Medicare/Medicaid fraud back in the 1990s. Said Feldstein was a director at
Eli Lilly when they were hit with the then-largest criminal penalty for
fraudulent marketing of their drugs. Said Feldstein was a director at
AIG/Financial Products when they had to be bailed out by the US government
for partaking in the largest insurance swindle in US history, so EVERYTHING
coming out of the NBER should be considered suspect, given the character of
its crew!
I wonder about Gini scores for the UK. A lot of residential central London
is now owned by extremely rich people like Saudi princes and Russian oligarchs.
My suspicion is that they are excluded from the figures. Their impact on the
local economy by pricing just about everyone else out of this market is,
however, non-trivial.
Yes, this site has carried some excellent articles in the past about this
subject, GINI essentially tracks the supposed inequality among countries,
not WITHIN the individual countries (or at least it fails to do so).
Something with is as appropriate to the UK as it is to America, a quote
from an outstanding book,
Glass House
, by Brian Alexander:
"Corporate elites said they needed free-trade agreements, so they got
them. Manufacturers said they needed tax breaks and public money incentives
in order to keep their plants operating in the USA, so they got them. Banks
and financiers needed looser regulations, so they got them. Employers said
they needed weaker unions – or no unions at all – so they got them. Private
equity firms said they needed carried interest and secrecy, so they got
them. What did Lancaster and a hundred other town like it get? Job losses,
slashed wages, poor civic leadership, social dysfunction, drugs."
To alter James Carville's noted quote, "It's capitalism, stupid." Or at
least the way it is configured so that short term profit for the ownership
class takes precedence over the immoral destruction of societies and mother
earth.
Rampant inequality, joblessness, homelessness is not a shameful aspect of
unfortunate excesses of few or tragic side effect of modern mass capitalism but
in fact it is its best feature, in fact absolutely necessary even critical to
the success of this unbelievable confidence scheme callled capitalist
socioeconomics enhanced by debt based monetary system and fiat currency.
And we all believe in that sham. We all believe in the value system and
valuation of our commodified social life by somehow divine authority of few
puny lowlifes in the ruling elite who are laughing at us all the way to the
empty bank they own and we are indebted to.
As long as we believe that we work for money, a useless symbol of our total
dependence, not for food, sustenance and shelter, as long as we believe we need
money that cannot be eaten or utilized as a material for building shelter but
can best be used as an emergency bathroom tissue substitute, we are lost
begging for mercy enslaving ourselves to strangers for nothing but an illusion
that breaths and promotes rampant inequality.
I know it sounds shocking but give it a thought if you can.
Here I found unique and controversial take on origins of money that touches
upon similar theme of money itself as a propaganda tool of social control.
"Even if everyone worked their butt off or got multiple PhDs, we'd
still need workers to clean radiation messes, toilet bowls or change
diapers."
Is there some law that says that PhD's can't clean radiation messes,
toilet bowls or change diapers? Shouldn't everyone be responsible for
"survival work"? Why should it just be some class of "workers" that need
to do those jobs? Why are some people considered so much better than
others that they are exempt from "survival work"? What if everyone put
some of their work time every day doing this "survival work" before they
did their "careers"?
Unfortunately, this is just another example of how the neoliberal
ideology has infiltrated everyone's thinking, even those who are
diametrically opposed to neoliberalism on some level and why it is going
to be so hard to get rid of ..
My late father, who looked for employment during the Great
Depression, would say "You needed a college degree to pump gas for
Standard Oil".
He had a cynical view of college degrees, asserting that if degrees
were necessary for jobs, the future employers should help with the
training expense.
The "must get an expensive college degree" assertion is losing its
effectiveness on the stressed American population, where we approach
nominal full employment at poor wages.
I suspect the education that is most needed in the USA is critical
thinking that serves to question the wisdom of our government and the
MSM in the propaganda they promote..
My dad did have a college degree, but his experience in his
father's store helped him get a job as a butcher for Safeway
during the Great Depression.
As I remember the story, many were vying for the Safeway
butcher job, but he outlined how his prior experience would
"help them sell more meat".
All one has to do is look at the projections from the labor
department for STEM job growth over the next 10 years (about
100K/year) and compare that to the similarly sized H1-B visa
count that tech firms want per year to see that a STEM college
education is not the safe haven in the job market that the MSM
promotes.
International companies cast a world wide net for educated
talent, and are probably unconcerned how much a prospective
employee's degree cost to acquire.
And these corporations also want to lower their US taxes,
which indirectly cuts public education funding.
We don't actually need PhD outside physical sciences.
It is a qualification ONLY in the Thesis subject matter.
We also don't need so many Lawyers and should turn of the
production line (maybe that is what inflates GDP in UK and
US .lawyers billing rates ?)
Excellent point, but that is the purpose of Identity Politics, to
erase the concept of "the worker" from our minds and thoughts,
practiced by both the r-cons of the bankster party and the faux crats
of the bankster party.
The r-cons' identity politics is that the "media" (still haven't
found them in Amerika) are "liberal" (still have found that, either)
and the r-cons are besieged by these outfits.
The faux crats wish to focus on every possible sub-grouping of
humans, to the exclusion of wage earners.
Worked for decades, but I suspect it may possibly and finally be
beginning to fall apart . . .
"Do we really need the education we are getting for most of the jobs
out there?"
The future belongs to those capable of handling it – the others will
be cast to the wayside. Do you really want to condemn most people to
being part of the wayside? Why do you think education is becoming so
expensive?
We do indeed all need more education, but not of the type that most
people think. The education young people suffer through for years and
then go into debt for more of is designed largely to impoverish,
enslave, and brainwash. It's anti-education, creating false
expectations, instilling poisonous memes, punishing independence and
non-compliance.
There are exceptions of course. Education for the rich is designed
to teach the rules of the game, weed out the unreliable, and establish
lifetime networks.
I am reminded that people with curious minds are always
educating themselves – formal setting or not- wealthy or not.
The social system should provides an outlet for those talents
and effort. The failing of todays ruling ideology is that human
talent is undervalued and underutilized. In effect, built on
waste and inefficiency in a broader sense. Todays economic
system seems most efficient on creating inequality.
A 4 hour work day based on a livable wage could open many
"educational" doors.
I am also old enough to remember that vocational training
was taken seriously in public schools without social stigma.
Labor was not a dirty word. A different form of critical
thinking focused on manufacture.
Are you referring to the "practical" one and two year programs
like the Australian TAFE system ? I got a two year computer degree
from such a program almost twenty
years ago and was fairly impressed with the program. Of the twenty
people in my class, eighteen had at least a masters degree in some
technical
subject though the program was designed for those who did not seek
to
go to university. The ones with the advanced degrees such as myself
were unemployed and so retraining.
Not at all. Practical training like TAFE (or like TAFE used
to be) can be valuable, depending on what course you choose. I'm
referring to primary, secondary and university education as it
is offered to the mainstream today in the western world.
Primary and secondary education is degraded for reasons far
too complex to get into here. Of course there are still tertiary
courses and teachers that educate, but universities are now run
strictly as commercial enterprises, and such teachers find it
harder and harder to prosper.
Before John Major UK had quality courses such as City &
Guilds and Part-Time University Courses – "Sandwich Courses"
where working students had Block or Day Release to study and
could work through their studies with access to industrial
labs and equipment and university facilities. It was very
cost-effective. Major turned everyone into Full-Time Students
so they emerged after 3 years with no relevant industrial
experience and lots of debt
The answer to your question is No. The resistance to single payer
health care in America belies that fact. Many alternative lifestyles
would be possible if one could relieve exorbitant medical care from
household expenses. Private businesses would be indirectly forced to
offer more humane working conditions, regardless of what that work
entailed by the mere fact that labor could easily relocate to a less
exploiting employer. Added to that, the removal of stress accompanied by
needing to deal with medical uncertainties of life. A sane society would
provide care for all its members.
Guaranteed food, shelter, basic education, healthcare, and some form
of work are all that is required from a just society. That should be the
criteria for evaluating the system. This is not utopia, and is within
reach. There is nothing technical holding this realization back. The
elite create conflict to secure their position. They believe in
inequality.
When you look at it, most "jobs" in capitalist society don't satisfy
any legitimate human need for survival. Not to mention the needs of the
remaining life on the planet. Most are satisfying manufactured wants. A
cynical play on human emotion that condemns most to unhappy and stressful
lives.
Change will happen when a critical mass of people can get past the
fear and psychological damage that is caused by manufactured needs,
excessive higher education for all being one them. In and of itself, a
"higher education" is meaningless if you cannot practice the acquired
skill. Are lower work hours on the horizon to accommodate all the excess
degrees? Not in the least.
This is not to say that lifelong education should not be an
aspirational goal. Only to stress that the social organizing structure
must accommodate that goal in a meaningful way. Right now, in America, it
is mostly overt exploitation. A creative way to manufacture debt slaves.
Once upon a time, most of the highly educated took a vow of poverty
with the assurance they would be cared for in a time of need.
Today most jump on the degree bandwagon to get on the road to
material consumption and end up realizing they were sold an expensive
if not worthless bill of goods.
Regarding excessive higher education as a manufactured need, I
think there are at least two other factors at play besides
credentialism and the (futile?) pursuit of good careers.
One is the decline in the literacy, numeracy, general knowledge,
and other educational achievements of your average high school
graduate compared to 30 years ago. It's well recognised in
universities that much of what used to be taken as known by
freshpersons, today needs to be taught or retaught in the early years
of a university/college course.
The second factor is simply the growing complexity and pace of
change of the world we inhabit. I suspect this is a major reason
behind the increase in the number of years of fulltime education the
average person seems to think they require.
+ 100
I think that people are so driven to value themselves in terms of money,
that they won't even allow other ideas like this to enter their
consciousness
Sadly, now is the time when we need to be thinking about other ideas,
because the ones we currently accept as valid just aren't working for most
of the world's people ..
Thank you. You seem to be the only one who got my most important point
namely a subversive function of money as a propaganda of liberalism that
underlie socioeconomic system of capitalism and commodification
(valuation and valorization in terms of money) of environment and social
relations.
What I mean by "propaganda of liberalism" is hijacking of ideas of
individual Freedom to mean abandonment of common interests and separation
from community, also separation from community in a form of alienation of
private property from community commons and hence introduction of money
as a representation of the private property, capital or collateral in a
debt based monetary system.
The money is so much embedded into people's psyche that trying to
explain artificiality of such an arrangement amounts to a sort of
Copernican revolution of explaining reality that completely contradicts
everyday common sense experience.
What's insidious in capitalism is that social relations among masses
of people are forced to be negotiated by money in addition to old ways of
social relations (also labor relations) being negotiated by social
position and political power and/or what we call culture i.e a common set
of attitudes and practices that have been empirically/historically proven
beneficial for community.
People do not realize that even 200 years ago many people were living
who did not use money even once in their lives since they did not need
to, they produced their own food, cloths, tools, they barter other goods
and even taxes they paid via field labor.
Imagine us today paying all our bills directly with our labor, one
thing we have abundant and we control, not scarce money controlled solely
by greedy elite.
Unemployment would be something our children would have learned about
only from history pages.
I guess nobody every read False Dawn: The Delusions of Global Capitalism, by
John Gray then a professor at the London School of Economics. It was published
in 1998 and is to this day the greatest critique of neoliberal economic dogma
ever written. Then again Gray is an intellectual's intellectual so the media
has always ignored him in favor of pop intellectual simpletons like Tom
Friedman.
It is as if Gray had a time machine which allowed him to see the future.
Prior to 1914 Global Capitalism had powered ahead hindered only by US
Tariff Walls such as McKinley Tariff and the upsurge in Tariffs in Germany,
Russia, France and a ludicrous British commitment to Free Trade which
destroyed investment in industry as capital flowed overseas. The result was
1914-18 War and the removal of Russia (the fastest-growing market) from
European trade and destruction of Germany and Central Europe
Social unrest and a populous backlash against global capitalism are always
trotted out as the main effects gross economic inequalities will have. But
given the elites control of the media and our economy they have the tools and
power to limit unrest and any backlash. The more important effect of economic
inequality is that it will destroy capitalism itself.
That is reassuring, I would hate to think "the Global Elite" was out of
touch or playing shepherdess in Hameau de la Reine; it is good to know the
Controllers have their finger on the pulse and are "caring" for us.
Cynicism is well-fed in the current era.
Years ago I read Amy Chua's book "World On Fire" (2002)
None of the workers give a shit about how rich the rich are. All they want
is a living wage. That the rich, who Piketty points out are rich because they
inherited wealth to start with won't pay, is insane on the part of the rich.
I have always wondered how successful the big producers, such as Wall Street
traders, would be if they were subjected to random stop-and-frisk of them in
their cars and coming out of the bars at night like they would be regularly
subjected to if they lived in poor neighborhoods. It is likely that a lot of
DWI and drug charges would be filed, similar to what we see in the inner city,
with attending legal issues impacting their productivity. Assuming they then
faced the court system with court-provided counsel instead of highly-paid
Harvard Law grads, I wonder how many of them would be back at work the next
day?
My spouse teaches in an inner city school and its pretty much only the
immigrant kids who have intact families providing them with support at home –
most of the American (black, white, and hispanic) kids in her classes have
parents in jail, domestic abuse protective orders, etc. They are frequently
raised by their grandparents or other relatives. Playing outside at recess and
lunch at school is very important because many of the kids live in
neighborhoods where it is unsafe to play outside. Being poor is very effective
at teaching kids how to be poor.
"... [Neo]liberalism that needs monsters to destroy can never politically engage with its enemies. It can never understand those enemies as political actors, making calculations, taking advantage of opportunities, and responding to constraints. It can never see in those enemies anything other than a black hole of motivation, a cesspool where reason goes to die. ..."
"... Hence the refusal of empathy for Trump's supporters. Insofar as it marks a demand that we not abandon antiracist principle and practice for the sake of winning over a mythicized white working class, the refusal is unimpeachable. ..."
"... Such a [neo]liberalism becomes dependent on the very thing it opposes, with a tepid mix of neoliberal markets and multicultural morals getting much-needed spice from a terrifying right. Hillary Clinton ran hard on the threat of Trump, as if his presence were enough to authorize her presidency. ..."
"... Clinton waged this campaign on the belief that her neoliberalism of fear could defeat the ethnonationalism of the right. ..."
"... In the novel, what begins as a struggle against inherited privilege results in the consolidation of a new ruling class that derives its legitimacy from superior merit. This class becomes, within a few generations, a hereditary aristocracy in its own right. Sequestered within elite institutions, people of high intelligence marry among themselves, passing along their high social position and superior genes to their progeny. Terminal inequality is the result. The gradual shift from inheritance to merit, Young writes, made "nonsense of all their loose talk of the equality of man": ..."
"... Losing every young person of promise to the meritocracy had deprived the working class of its prospective leaders, rendering it unable to coordinate a movement to manifest its political will. ..."
"... A policy of benign neglect of immigration laws invites into our country a casualized workforce without any leverage, one that competes with the native-born and destroys whatever leverage the latter have to negotiate better terms for themselves. The policy is a subsidy to American agribusiness, meatpacking plants, restaurants, bars, and construction companies, and to American families who would not otherwise be able to afford the outsourcing of childcare and domestic labor that the postfeminist, dual-income family requires. At the same time, a policy of free trade pits native-born workers against foreign ones content to earn pennies on the dollar of their American counterparts. ..."
"... Four decades of neoliberal globalization have cleaved our country into two hostile classes, and the line cuts across the race divide. On one side, college students credential themselves for meritocratic success. On the other, the white working class increasingly comes to resemble the black underclass in indices of social disorganization. On one side of the divide, much energy is expended on the eradication of subtler inequalities; on the other side, an equality of immiseration increasingly obtains. ..."
[Neo]liberalism that needs monsters to destroy can never politically engage with its enemies.
It can never understand those enemies as political actors, making calculations, taking advantage
of opportunities, and responding to constraints. It can never see in those enemies anything other
than a black hole of motivation, a cesspool where reason goes to die.
Hence the refusal of empathy for Trump's supporters. Insofar as it marks a demand that we
not abandon antiracist principle and practice for the sake of winning over a mythicized white working
class, the refusal is unimpeachable. But like the know-nothing disavowal of knowledge after
9/11, when explanations of terrorism were construed as exonerations of terrorism, the refusal of
empathy since 11/9 is a will to ignorance. Far simpler to imagine Trump voters as possessed by a
kind of demonic intelligence, or anti-intelligence, transcending all the rules of the established
order. Rather than treat Trump as the outgrowth of normal politics and traditional institutions -
it is the Electoral College, after all, not some beating heart of darkness, that sent Trump to the
White House - there is a disabling insistence that he and his forces are like no political formation
we've seen. By encouraging us to see only novelty in his monstrosity, analyses of this kind may prove
as crippling as the neocons' assessment of Saddam's regime. That, too, was held to be like no tyranny
we'd seen, a despotism where the ordinary rules of politics didn't apply and knowledge of the subject
was therefore useless.
Such a [neo]liberalism becomes dependent on the very thing it opposes, with a tepid mix of
neoliberal markets and multicultural morals getting much-needed spice from a terrifying right. Hillary
Clinton ran hard on the threat of Trump, as if his presence were enough to authorize her presidency.
Where Sanders promised to change the conversation, to make the battlefield a contest between a
multicultural neoliberalism and a multiracial social democracy, Clinton sought to keep the battlefield
as it has been for the past quarter-century. In this single respect, she can claim a substantial
victory. It's no accident that one of the most spectacular confrontations since the election pitted
the actors of Hamilton against the tweets of Trump. These fixed, frozen positions - high
on rhetoric, low on action - offer an almost perfect tableau of our ongoing gridlock of recrimination.
Clinton waged this campaign on the belief that her neoliberalism of fear could defeat the
ethnonationalism of the right. Let us not make the same mistake twice. Let us not be addicted
to "the drug of danger," as Athena says in the Oresteia, to "the dream of the enemy that
has to be crushed, like a herb, before [we] can smell freedom."
The term "meritocracy" became shorthand for a desirable societal ideal soon after it was coined
by the British socialist Sir Michael Young. But Young had originally used it to describe a dystopian
future. His 1958 satirical novel, The Rise of the Meritocracy, imagines the creation and growth of
a national system of intelligence testing, which identifies talented young people from every stratum
of society in order to install them in special schools, where they are groomed to make the best use
possible of their innate advantages.
In the novel, what begins as a struggle against inherited privilege results in the consolidation
of a new ruling class that derives its legitimacy from superior merit. This class becomes, within
a few generations, a hereditary aristocracy in its own right. Sequestered within elite institutions,
people of high intelligence marry among themselves, passing along their high social position and
superior genes to their progeny. Terminal inequality is the result. The gradual shift from inheritance
to merit, Young writes, made "nonsense of all their loose talk of the equality of man":
Men, after all, are notable not for the equality, but for the inequality, of their endowment.
Once all the geniuses are amongst the elite, and all the morons are amongst the workers, what meaning
can equality have? What ideal can be upheld except the principle of equal status for equal intelligence?
What is the purpose of abolishing inequalities in nurture except to reveal and make more pronounced
the inescapable inequalities of Nature?
I thought about this book often in the years before the crack-up of November 2016. In early 2015,
the Harvard sociologist Robert Putnam published a book that seemed to tell as history the same story
that Young had written as prophecy. Our Kids: The American Dream in Crisis opens with an evocation
of the small town of Port Clinton, Ohio, where Putnam grew up in the 1950s - a "passable embodiment
of the American Dream, a place that offered decent opportunity for all the kids in town, whatever
their background." Port Clinton was, as Putnam is quick to concede, a nearly all-white town in a
pre-feminist and pre-civil-rights America, and it was marked by the unequal distribution of power
that spurred those movements into being. Yet it was also a place of high employment, strong unions,
widespread homeownership, relative class equality, and generally intact two-parent families. Everyone
knew one another by their first names and almost everyone was headed toward a better future; nearly
three quarters of all the classmates Putnam surveyed fifty years later had surpassed their parents
in both educational attainment and wealth.
When he revisited it in 2013, the town had become a kind of American nightmare. In the 1970s,
the industrial base entered a terminal decline, and the town's economy declined with it. Downtown
shops closed. Crime, delinquency, and drug use skyrocketed. In 1993, the factory that had offered
high-wage blue-collar employment finally shuttered for good. By 2010, the rate of births to unwed
mothers had risen to 40 percent. Two years later, the average worker in the county "was paid roughly
16 percent less in inflation-adjusted dollars than his or her grandfather in the early 1970s."
Young's novel ends with an editorial note informing readers that the fictional author of the text
had been killed in a riot that was part of a violent populist insurrection against the meritocracy,
an insurrection that the author had been insisting would pose no lasting threat to the social order.
Losing every young person of promise to the meritocracy had deprived the working class of its
prospective leaders, rendering it unable to coordinate a movement to manifest its political will.
"Without intelligence in their heads," he wrote, "the lower classes are never more menacing
than a rabble."
We are in the midst of a global insurrection against ruling elites. In the wake of the most destructive
of the blows recently delivered, a furious debate arose over whether those who supported Donald Trump
deserve empathy or scorn. The answer, of course, is that they deserve scorn for resorting to so depraved
and false a solution to their predicament - and empathy for the predicament itself. (And not just
because advances in technology are likely to make their predicament far more widely shared.) What
is owed to them is not the lachrymose pity reserved for victims (though they have suffered greatly)
but rather a practical appreciation of how their antagonism to the policies that determined the course
of this campaign - mass immigration and free trade - was a fully political antagonism that was disregarded
for decades, to our collective detriment.
A policy of benign neglect of immigration laws invites into our country a casualized workforce
without any leverage, one that competes with the native-born and destroys whatever leverage the latter
have to negotiate better terms for themselves. The policy is a subsidy to American agribusiness,
meatpacking plants, restaurants, bars, and construction companies, and to American families who would
not otherwise be able to afford the outsourcing of childcare and domestic labor that the postfeminist,
dual-income family requires. At the same time, a policy of free trade pits native-born workers against
foreign ones content to earn pennies on the dollar of their American counterparts.
In lieu of the social-democratic provision of childcare and other services of domestic support,
we have built a privatized, ad hoc system of subsidies based on loose border enforcement - in effect,
the nation cutting a deal with itself at the expense of the life chances of its native-born working
class. In lieu of an industrial policy that would preserve intact the economic foundation of their
lives, we rapidly dismantled our industrial base in pursuit of maximal aggregate economic growth,
with no concern for the uneven distribution of the harms and the benefits. Some were enriched hugely
by these policies: the college-educated bankers, accountants, consultants, technologists, lawyers,
economists, and corporate executives who built a supply chain that reached to the countries where
we shipped the jobs. Eventually, of course, many of these workers learned that both political parties
regarded them as fungible factors of production, readily discarded in favor of a machine or a migrant
willing to bunk eight to a room.
Four decades of neoliberal globalization have cleaved our country into two hostile classes,
and the line cuts across the race divide. On one side, college students credential themselves for
meritocratic success. On the other, the white working class increasingly comes to resemble the black
underclass in indices of social disorganization. On one side of the divide, much energy is expended
on the eradication of subtler inequalities; on the other side, an equality of immiseration increasingly
obtains.
Even before the ruling elite sent the proletariat off to fight a misbegotten war, even before
it wrecked the world economy through heedless lending, even before its politicians rescued those
responsible for the crisis while allowing working-class victims of all colors to sink, the working
class knew that it had been sacrificed to the interests of those sitting atop the meritocratic ladder.
The hostility was never just about differing patterns in taste and consumption. It was also about
one class prospering off the suffering of another. We learned this year that political interests
that go neglected for decades invariably summon up demagogues who exploit them for their own gain.
The demagogues will go on to betray their supporters and do enormous harm to others.
If we are to arrest the global descent into barbarism, we will have to understand the political
antagonism at the heart of the meritocratic project and seek a new kind of politics. If we choose
to neglect the valid interests of the working class, Trump will prove in retrospect to have been
a pale harbinger of even darker nightmares to come.
"... "Another kind of inequality arising through the operation of the market is also required, in a somewhat more subtle sense, to produce equality of treatment. It can be illustrated most simply by a lottery. Consider a group of individuals who initially have equal endowments and who agree voluntarily to enter a lottery with very unequal prizes. The resultant inequality is surely required to permit the individuals in question to make most of their initial equality. Much of the inequality of income produced by payment in accordance with product reflects equalizing differences or the satisfaction of men's taste for uncertainty." ..."
"... Journal of Economic Theory ..."
"... Measuring Inequality. ..."
"... Capitalism and Freedom ..."
"... Philosophy & Public Affairs ..."
"... Equality of Opportunity, ..."
"... Handbook of Income Distribution, volume 2 ..."
The standard procedure for measuring income inequality in a society is to
take the observed distribution of income and to calculate an inequality
index from it. Such indices have also been interpreted as a measure of
welfare loss entailed in departures from equality of outcomes for a society
which is egalitarian. A classic treatment is that of the late Tony Atkinson,
who asked the question: What fraction of national income would an
egalitarian society be willing to give up in order to have equality? On this
basis, he developed what we now call the Atkinson Index of Inequality.
1
However, this procedure faces the well-known criticism that the observed
distribution is nothing but the outcome of a process, and that it is the
process which matters for normative assessment.
2
In particular,
it is the fairness of the underlying process which is held to be the
appropriate normative standard, not whether the observed inequality of
outcomes is high or low. But if we take the process versus outcomes
criticism seriously, does this mean that we stop calculating inequality,
since it no longer has normative validity in and of itself? The answer to
this question is no. In our recent work, we argue that even within the
process frame, overall indices of inequality still maintain their relevance,
but now as statistical tests of fairness (Kanbur and Snell 2017).
An early proponent of the process versus outcome line of argument was
Milton Friedman (1962), who brought in the consequences of risk taking for
interpreting observed inequality:
"Another kind of inequality arising through the operation of the
market is also required, in a somewhat more subtle sense, to produce
equality of treatment. It can be illustrated most simply by a lottery.
Consider a group of individuals who initially have equal endowments and who
agree voluntarily to enter a lottery with very unequal prizes. The resultant
inequality is surely required to permit the individuals in question to make
most of their initial equality. Much of the inequality of income produced by
payment in accordance with product reflects equalizing differences or the
satisfaction of men's taste for uncertainty."
Friedman's argument highlights simultaneously the issue of process versus
outcomes, and the fact that even when the process implies
ex ante
equality (free lottery choice by identical individuals), the outcome may
well show – misleadingly, in his view – inequality among individuals. Even
though the process itself is fair, inherent randomness may show spurious
inequality in outcomes.
Suppose we wish to evaluate the process in Friedman's example. This would
require an evaluation of whether the lotteries faced by the different
individuals were indeed identical. If we could directly observe the lottery
choices, that would be the end of the matter. But this is usually not the
case. All we can observe are in fact the outcomes. The task is then to try
and infer from these outcomes the nature of the process which generated
them. It is clear that in order to do this we will have to provide a minimal
structure to the class of processes. It is only within a given class of
processes that we will be able to infer more specific properties of the
process that gave rise to the outcomes we observe. In our work, we show that
making these assumptions can provide considerable insight into the
relationship between outcomes and process.
In particular, we motivate the use of two well-known and commonly used
indices of inequality – the Theil Index and the Mean Log Deviation (MLD) –
as tests of the null hypothesis of fairness versus the alternative of
unfairness.
3
We show that the likelihood ratio tests for fairness
within two distinct income processes are proportional to these two well used
indices respectively – that is to say, the tests are metrics of whether or
not each individual faces the same income process. We then suggest that
instead of presenting the indices as raw numbers, one could present the
p-values that the raw numbers imply – a high Theil/MLD would imply a low
p-value, which in turn would indicate that the probability that incomes were
generated by a fair process was low.
We call the first stylised process we consider the 'helicopter money
drop'. Think of a helicopter dropping a fixed total amount of dollars onto a
population. Each individual has a probability that he or she catches a
dollar thrown from the helicopter. Fairness in this process is when all
probabilities are equal. The likelihood ratio test for fairness in this
frame is proportional to the Theil Index. We call the second stylised
process the 'helicopter money stop'. Suppose that within any year, each of
our individuals receives the same amount of income each 'hour' and will
continue to receive this hourly amount subject to a 'stop' which is dropped
by the helicopter. Fairness is now characterised by the probability of
'stopping' being the same each hour for each individual regardless of how
many hours they have survived the hazard. For this process, the likelihood
ratio test for fairness is proportional to MLD.
The classical hypothesis testing approach takes fairness as a sharp null
and asks whether the data support it. In a Bayesian framework, fairness and
unfairness are 'models' and we ask which is more likely given the observed
data. We show that if fairness and unfairness are treated as equally likely,
then the two indices are also proportional to a measure of how the data
modifies initial agnosticism in the direction of favouring fairness or
unfairness as being the more likely model generating the observations.
Returning to Friedman's example, it is obvious that in reality endowments
are not equal and individuals face different lotteries. The final outcomes
are thus the result of these inequalities across lotteries, as well as the
inequality caused by the fact that even when a group of individuals faces
the same lottery, and so are equal ex ante, there will be winners and losers
ex post within that group. That portion of observed inequality which can be
attributed to the initial ex ante differences across lotteries that
individuals have access to, might be referred to as 'inequality of
opportunity'. This is related to John Roemer's (1998) famous formulation of
attributing variation in outcomes to variation in 'circumstances' (factors
outside an individual's control) and 'effort' (factors within an
individual's control).
We are then led to ask whether we can test for whether there are these ex
ante differences ('unfairness') across groups defined by common
circumstances (for example based on ethnicity and gender). We show that for
the two processes, we can indeed use the Theil index and MLD to develop
statistical tests for fairness across groups. Applying the methods to US
data for groupings based on race, gender, health, location of birth state
(North or South), and biological parents, we find that fairness is rejected.
Similarly, in a Bayesian framework we find that starting with priors of
fairness and unfairness being equally likely, the data move us in the
direction of unfairness being more likely.
Thus, the answer to the process based critique of inequality measurement
is not to stop calculating inequality indices. Rather, it is to interpret
inequality indices differently, as test statistics to shed light on the
fairness of the process.
References
Atkinson, A (1970), "On the Measurement of Inequality."
Journal of
Economic Theory
2: 244-263.
Cowell, F A (2011),
Measuring Inequality.
Oxford University
Press, Oxford.
Friedman, M (1962)
Capitalism and Freedom
. University of Chicago
Press.
Dworkin, R (1981), "What is Equality? Part 2: Equality of Resources."
Philosophy & Public Affairs
, 10(4), pages 283-345.
Roemer, J (1998),
Equality of Opportunity,
Harvard University
Press.
Roemer, J E and A Trannoy (2015), "Equality of Opportunity", in A B
Atkinson and F Bourguignon (eds),
Handbook of Income Distribution,
volume 2
, pp. 217-300, Elsevier.
Endnotes
[1] See Atkinson (1970). For an overview and survey of standard methods,
see Cowell (2011).
[2] Early critiques are by Sen (1979) and Dworkin (1981). A recent survey
is by Roemer and Trannoy (2015).
[3] Note that MLD as sometimes also known as "Theil's second index".
Pleasantly surprised to see this research article
on the need to combat rising income inequality and the
death of the American dream in the AAAS journal Science:
http://science.sciencemag.org/content/356/6336/398
I don't know why everyone is calling the Raise the
Wage Act "Bernie Sanders' Minimum Wage Act," since the
bill was introduced by Patty Murray. Further, the Act
doesn't have anyone receiving $15 until 2024. If you
live in Seattle and work for a large employer (over
500 employees), you will receive $15 per hour minimum
either in 2017 or 2018, depending on whether or not
the company provides health insurance as a benefit.
People are hurting
now
. They need $15 per hour
now
. Once again, the Dems are "fighting" but
not trying to win.
With four times as many Democratic co-sponsors as he had just two years
ago, Sen. Bernie Sanders (I-Vt.) on Wednesday morning re-introduced a bill
to raise the federal minimum wage to $15 per hour.
In 2015, Sanders introduced similar legislation with just five co-sponsors.
On Wednesday, he boasted 21, in addition to lead co-sponsor Sen. Patty Murray
(D-Wash.). They are:
Actually, Patty Murray introduced the bill
on April 30, 2015, which would have raised the
minimum wage gradually to $12 by 2020. There
were 32 original co-sponsors, all Dems. Bernie
introduced a similar bill on July 22, 2015,
with Ed Markey as the original co-sponsor, which
would have raised the minimum wage to
$15
dollars by 2020. Members of the Congressional
Progressive Caucus introduced a companion bill
in the House. The most recent bill is a re-introduction
of Murray's bill, with Sanders now supporting
$15 by 2024.
I know that many here continue to wish to believe that Sanders hasn't
sold out to the Dems, but the evidence becomes clearer that he is no longer
the fighter he was when he ran for President.
I hope you're wrong. But the wind did
go out of his sails when he lost NY, before
that he was still hoping.
I continue to see him as fighting for us,
but the dems keep kicking him
the only way to kick back is third party,
but a monumental effort for an older fellow.
Imagine MSM, Mic, dems, reps, insurance,
banks, the 1% and then the challenge to
register in even a majority of states
Easier to take over greens and convert to
functional, but no indication he's thinking
that.
"... My understanding of individuals raised from non-property owning societies still have certain notions of want and possession, for example Native Americans did on wives. On top of that, due to the success of property-owning societies, this suggests that capitalism is overall adaptive and advantageous. ..."
"... In 2011, De Waal and his co-workers were the first to report that chimpanzees given a free choice between helping only themselves or helping themselves plus a partner, prefer the latter. In fact, De Waal does not believe these tendencies to be restricted to humans and apes, but views empathy and sympathy as universal mammalian characteristics, a view that over the past decade has gained support from studies on rodents and other mammals, such as dogs. ..."
There was a time when boys played games of marbles following strict playground rules: contestants
had to stand a prescribed distance away from the little pyramid of marbles, and chuck only marbles
of the prescribed size. Rules ruled. Piaget was intrigued by the explanations children gave for moral
judgements, and the playground is the arena in which the concept of fairness is honed.
Piaget followed a model which is rare nowadays. He observed his own children in great detail as
they grew up. His was the least representative sample in the history of psychology. Nonetheless he
launched the study of the development of morality, and the conception of fairness.
The majority of experimental studies done in psychological laboratories seem to show that even
young children prefer equal shares rather than unequal shares. This would suggest that people have
an innate preference for socialism and the re-distribution of wealth.
In fact, this is true only if people are asked to distribute goods between people who are unknown
to them, and who have not behaved in any particular way which would make them consider that some
were more worthy and deserving than others.
The moment you show that one person has been more helpful than another, or has worked harder than
another, then judges believe that, as a matter of fairness, the more energetic and helpful person
should get a greater share.
That is fair, after all, because those who were hard-working and helpful have deserved it because
of their efforts. So although there are many studies suggesting that people do not like inequality,
it turns out that what they most dislike is unfairness.
Once it can be shown that a distribution is fairly based on effort then respondents will tolerate
and indeed require that the distribution of wealth is proportionate to effort and not just based
on the mere fact of existing. People prefer unequal societies for the reason that they in fact they
do not mind inequality if it is based on rewards for effort.
Unusually for a scientific paper, it is a good read. What really matters in these experiments
is context, and once context is provided then it is clear that people accept unequal societies so
long as they are based on a fair allocation of rewards, proportional to contribution.
The authors say:
There is immense concern about economic inequality, both among the scholarly community and
in the general public, and many insist that equality is an important social goal. However, when
people are asked about the ideal distribution of wealth in their country, they actually prefer
unequal societies. We suggest that these two phenomena can be reconciled by noticing that, despite
appearances to the contrary, there is no evidence that people are bothered by economic inequality
itself. Rather, they are bothered by something that is often confounded with inequality: economic
unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies
and young children, we argue that humans naturally favour fair distributions, not equal ones,
and that when fairness and equality clash, people prefer fair inequality over unfair equality.
Both psychological research and decisions by policymakers would benefit from more clearly distinguishing
inequality from unfairness.
The authors review a long series of experiments which seem to show that children prefer absolute
equality in the sharing of rewards. Inequality is certainly a focus of political concern. It attracts
those who make bold complaints of the form "The top 1% of people own XX% of the wealth" where the
implication is that the owned wealth should be 1% but for foul reasons is much higher than that.
This statistic contains several errors, and tends to mislead.
By the way, it amuses me that people who strongly object to a person's general level of ability
being represented "by a single figure" have no qualms about wealth being represented "by a single
figure" despite it being based on chattels, residential property (sometimes minus mortgages, sometimes
not), stocks and shares, bank accounts, pension rights totals (say, at 20 times annual payments),
and other quasi-monetary benefits. Such critics should relax: although wealth estimates have methodological
shortcomings, an overall figure gives a reasonable estimate for comparative purposes (as do estimates
of general intelligence).
The Gini coefficient (0 is equitable distribution, 100 is outrageous inequity) is well-known,
and usually widely quoted without comment, since the manifest goodness of equality is assumed to
be agreed by all. Laboratory studies seem to confirm that people have a deep preference for equality.
So, when people are asked to distribute resources among a small number of people in a lab study,
they insist on an exactly equal distribution. But when people are asked to distribute resources
among a large group of people in the actual world, they reject an equal distribution, and prefer
a certain extent of inequality. How can the strong preference for equality found in public policy
discussion and laboratory studies coincide with the preference for societal inequality found in
political and behavioural economic research?
We argue here that these two sets of findings can be reconciled through a surprising empirical
claim: when the data are examined closely, it turns out that there is no evidence that people
are actually concerned with economic inequality at all. Rather, they are bothered by something
that is often confounded with inequality: economic unfairness.
We suggest that the perception that there is a preference for equality arises through an undue
focus on special circumstances, often studied in the laboratory, where inequality and unfairness
coincide. In most situations, however, including those involving real-world distributions of wealth,
people's concerns about fairness lead them to favour unequal distributions.
Anyone looking for evidence that people have a natural aversion to inequality will find numerous
laboratory studies that seemingly confirm their view. For example, studies have found "a universal
desire for more equal pay", "egalitarian motives in humans", "egalitarianism in young children",
and that "equality trumps reciprocity". A Google Scholar search for "inequality aversion" yields
over 10,000 papers that bear on this topic.
Furthermore, people appear to view the equal distribution of resources as a moral good; they
express anger toward those who benefit from unequal distributions.
Indeed, these data might underestimate people's preferences for unequal distributions. One
follow-up study contrasted Norton and Ariely's question about the percentage of wealth that should
correspond to each quintile of the American population with a question about what the average
wealth should be in each quintile. The former question resulted in an ideal ratio of poorest to
wealthiest of about 1/4, but for the latter question the ratio jumped to 1/50. When the connection
between the two questions was explained to participants, a majority chose the higher inequality
ratio as reflecting their actual beliefs for both measures.
At this stage it should be made clear that all the "equality in the lab" researchers have not
been telling lies. They are aware that inequality and unfairness are being confounded, but that message
has been downplayed in the telling. From a research strategy perspective, I think it shows how a
particular approach (strangers in a lab) fails to produce results which map onto real world observations.
When participants come together without any back history, the ideal of equality rules. When the fuller
context is given a chance to be considered, then subjects in an experiment have no hesitation in
rewarding those people who rise early to go to work over those who rise late to do nothing. Children
not only reward those who have done more work, but also those who have been kind and helpful.
It follows, then, that if one believes that (a) people in the real world exhibit variation
in effort, ability, moral deservingness, and so on, and (b) a fair system takes these considerations
into account, then a preference for fairness will dictate that one should prefer unequal outcomes
in actual societies.
One proposal is that fairness intuitions are rooted in adaptations for differentially responding
to the prosocial and antisocial actions of others. For cooperation and pro-sociality to evolve,
there has to be some solution to the problem of free-riders, cheaters, and bad actors. The usual
explanation for this is that we have evolved a propensity to make bad behaviour costly and good
behaviour beneficial, through punishment and reward
Our own argument against a focus on inequality is a psychological one. In this paper we have
outlined a wealth of empirical evidence suggesting that people don't care about reducing inequality
per se . Rather, people have an aversion toward unfairness, and under certain special
circumstances this leads them to reject unequal distributions. In other conditions, including
those involving real-world distributions of wealth, it leads them to favour unequal distributions.
In the current economic environment in the United States and other wealthy nations, concerns about
fairness happen to lead to a preference for reducing the current level of inequality. However,
in various other societies across the world and across history (for example, when faced with the
communist ideals of the former USSR), concerns about fairness lead to anger about too much equality.
I have quoted from this paper at some length, because it is unusually well-written, clearly describes
its techniques and its arguments, follows a logical sequence, and deals with an important topic.
My final conclusion is that it leads us to an important general conclusion: the repeated finding
of an effect (in this case an apparent preference for equality) should not stop us from digging deeper
to check whether the methods are really picking up the causes of decisions, and whether the general
effect persists in real-world settings. It turns out that when distributing rewards to unknown people,
equal shares is probably a good strategy; but when distributing rewards to people who have shown
varying levels of contribution, unequal rewards are often fairer.
Should we have a coefficient to measure to what extent a society provides appropriate rewards
for varying levels of social contribution (effort, ability, pro-social acts)? What to call it? The
Reward coefficient? Are social mobility measures an acceptable substitute?
Discarding Robespierre, should our chant instead be "Liberty, Proportionality, and Selective Association"?
I may need to work on these details a little longer.
This would suggest that people have an innate preference for socialism and the re-distribution
of wealth.
You start well, =) But not, =( Socialism don't/ never re-distribute[d] ideally the wealth NOR
the power-decision, something extremely valuable as wealth in terms of individual well being.
So, in the next time, try to analyze firstly this differences between what socialistic propaganda
tell you and what real socialism, aka, communism really is.
Less inequal than capitalism* Likely in some official socialist countries has been but still
very inequal and extremely inequal in other values such free speech and proportional fairness
in individual power-decision = government deciding everything about your life without any negotiation
or dialogue between interested parts. Read More
That is fair, after all, because those who were hard-working and helpful have deserved it
because of their efforts.
Yes, this is the psychology of the masses or of the worker, more hard-WORKing you are, better,
but some people take note that a lot of non-hard worker are significantly more gratified than
majority. So this people perceive a big bug in the logic of [capitalistic] meritocracy.
"Hard-worker = deserved to earn more"
but
A lot of those on the elite are not hard-worker, so
And "hard-workness" is heritable/inheritable too, so something that you born with more facility
to engage reduce considerably the idea that people who are not hard-working, depending for what,
are just lazy. The own idea of lazyness seems complicated in this case if it is usually based
on the idea of "free will", if you are lazy it's because you want to be like that.
Today's wealth inequality is entirely an artifact of the debt bubble and related Great Asset
Mania. It will decrease dramatically when the social mood mania sustaining it these last 35 years
rolls over.
I also note that the first thing deleted from any propaganda piece we read in "the news" is
context. We can't have the rubes deciding that it's okay for the surgeon who saved their mom's
life after her stroke to drive a nicer car and maybe KEEP what he or she made in income last year.
(Ramping taxes on the "working wealthy," i.e., people who have high incomes but are not Gates-Buffet
Rich, is Job One for Leftists when they're not celebrating another white guy suicide.)
Read More Agree:
Daniel
Chieh
It's almost as though egalitarianism is a primal, unthinking position mostly adopted by children
who don't know any better. The simplest and most knee-jerk definition of "fairness", defined by
feeling.
The moment you step back and examine the world, inequality starts to make more sense.
Read More
In this paper we have outlined a wealth of empirical evidence suggesting that people
don't care about reducing inequality per se.
Oh dear. Whatever empirical evidence in this study is suggesting, it's irrelevant. Because
the people being studied have been conditioned, indoctrinated, corrupted by the society they live
in. They are completely useless, for the purpose of determining what human beings – in abstract
– may or may not care about.
Why don't you study people who'd grown up in a hippie commune or in an Amish village, or in
an orphanage in a poor country – I knew someone who did, and he, many years later, still had no
clear concept of 'property'. And at that point, when you don't accept the concept of 'property'
or 'wealth', at that point the whole idea of ' distribution ', the whole premise of your
musings becomes completely meaningless Read More
In this paper we have outlined a wealth of empirical evidence suggesting that people don't
care about reducing inequality per se.
Oh dear. Whatever empirical evidence in this study is suggesting, it's irrelevant. Because the
people being studied have been conditioned, indoctrinated, corrupted by the society they live
in. They are completely useless, for the purpose of determining what human beings - in abstract
- may or may not care about.
Why don't you study people who'd grown up in a hippie commune or in an Amish village, or in
an orphanage in a poor country - I knew someone who did, and he, many years later, still had no
clear concept of 'property'. And at that point, when you don't accept the concept of 'property'
or 'wealth', at that point the whole idea of ' distribution ', the whole premise of your
musings becomes completely meaningless... I disagree.
Since most people have not grown up in the extreme circumstances of a commune, this still applies
to the vast majority of people and the model is useful. However, to entertain your proposition,
please tell us more about your friend.
My understanding of individuals raised from non-property owning societies still have certain
notions of want and possession, for example Native Americans did on wives. On top of that, due
to the success of property-owning societies, this suggests that capitalism is overall adaptive
and advantageous.
The moment you show that one person has been more helpful than another, or has worked harder
than another, then judges believe that, as a matter of fairness, the more energetic and helpful
person should get a greater share.
And folks disagree on who that helper might be. Compare people's reaction to the Koch brothers
and to George Soros.
Perhaps it's the engineer in me, but I've observed that some driving force is necessary to
make a process run. Voltage, temperature/pressure difference, or maybe wealth disparity are examples.
I had the choice of working in a local mill for good wages but a killing environment, or working
my way through college with little money. Intermediate term sacrifice paid long term dividends
for me and my kids/grandkids. There's also a good argument to be made that society is also better
served by such self-serving efforts.
If everyone is truly equal, what is there to drive society?
Since most people have not grown up in the extreme circumstances of a commune, this still
applies to the vast majority of people and the model is useful. However, to entertain your
proposition, please tell us more about your friend.
My understanding of individuals raised from non-property owning societies still have certain
notions of want and possession, for example Native Americans did on wives. On top of that,
due to the success of property-owning societies, this suggests that capitalism is overall adaptive
and advantageous.
Capitalism is a short term/consumerism and parasitic-like socio-economic system. Capitalism
is advantageous but it depend for whom. It's not adaptative only for short term.
It's almost as though egalitarianism is a primal, unthinking position mostly adopted by
children who don't know any better. The simplest and most knee-jerk definition of "fairness",
defined by feeling.
The moment you step back and examine the world, inequality starts to make more sense.
More "contextual" or "default" than primal or unthinking. Nobody's earned a bigger or smaller
share, because everyone's qualification is simply showing up and being included in deliberation
over division of spoils.
the people being studied have been conditioned, indoctrinated, corrupted by the society
they live in. They are completely useless, for the purpose of determining what human beings
– in abstract – may or may not care about.
@Santoculto
Capitalism is a short term/consumerism and parasitic-like socio-economic system. Capitalism
is advantageous but it depend for whom. It's not adaptative only for short term. Seems to me that
most of human history of every civilization involved property at least since the dawn of agriculture
allowed wealth to be stored in the form of grain. Property-less cultures were usually cultures
that lacked the ability for an individual to accumulate wealth; however, only in cultures that
had property allowed for the rise of more specialized classes of soldiery, tradesmen, and craftsmen.
Read More Wally
,
April 19, 2017 at 4:47 am GMT \n
It's revealing that those who advocate for 'equality' generally have much higher incomes than
those they advocate for.
The Left has slapped together a coalition of Parasites and Perverts and seem to think they
can beat the Productive.
In this paper we have outlined a wealth of empirical evidence suggesting that people don't
care about reducing inequality per se.
Oh dear. Whatever empirical evidence in this study is suggesting, it's irrelevant. Because the
people being studied have been conditioned, indoctrinated, corrupted by the society they live
in. They are completely useless, for the purpose of determining what human beings - in abstract
- may or may not care about.
Why don't you study people who'd grown up in a hippie commune or in an Amish village, or in
an orphanage in a poor country - I knew someone who did, and he, many years later, still had no
clear concept of 'property'. And at that point, when you don't accept the concept of 'property'
or 'wealth', at that point the whole idea of ' distribution ', the whole premise of your
musings becomes completely meaningless... Michael Chrichton on the not-so-noble savages.
And what about indigenous peoples, living in a state of harmony with the Eden-like environment?
Well, they never did.
On this continent, the newly arrived people who crossed the land bridge almost immediately
set about wiping out hundreds of species of large animals, and they did this several thousand
years before the white man showed up, to accelerate the process.
And what was the condition of life? Loving, peaceful, harmonious? Hardly: the early peoples
of the New World lived in a state of constant warfare. Generations of hatred, tribal hatreds,
constant battles. The warlike tribes of this continent are famous: the Comanche, Sioux, Apache,
Mohawk, Aztecs, Toltec, Incas. Some of them practiced infanticide, and human sacrifice. And
those tribes that were not fiercely warlike were exterminated, or learned to build their villages
high in the cliffs to attain some measure of safety.
How about the human condition in the rest of the world? The Maori of New Zealand committed
massacres regularly. The dyaks of Borneo were headhunters. The Polynesians, living in an environment
as close to paradise as one can imagine, fought constantly, and created a society so hideously
restrictive that you could lose your life if you stepped in the footprint of a chief. It was
the Polynesians who gave us the very concept of taboo, as well as the word itself.
The noble savage is a fantasy, and it was never true. That anyone still believes it, 200
years after Rousseau, shows the tenacity of religious myths, their ability to hang on in the
face of centuries of factual contradiction.
Since most people have not grown up in the extreme circumstances of a commune, this still applies
to the vast majority of people and the model is useful. However, to entertain your proposition,
please tell us more about your friend.
My understanding of individuals raised from non-property owning societies still have certain
notions of want and possession, for example Native Americans did on wives. On top of that, due
to the success of property-owning societies, this suggests that capitalism is overall adaptive
and advantageous.
However, to entertain your proposition, please tell us more about your friend.
He wasn't a friend, just someone I met a few times; friend of a friend. For example: when leaving
a party, the guy would just put on a jacket, anyone's jacket. Because a jacket is a jacket, it's
a thing that serves the purpose. This sort of thing.
Native Americans did on wives
So, maybe they had some form of 'ownership' of women, so what. I'm not saying that there can
be only two kinds of social organizations, there are many. For us, for our natural habitat, 'ownership',
'wealth', 'property', 'wage', 'debt', 'market', 'deserves' are the most basic concepts that we
never question. They are our deepest underlying assumptions, internalized from the most early
age. But I don't think they are embedded in human nature.
Read More
And what about indigenous peoples, living in a state of harmony with the Eden-like environment?
Well, they never did.
On this continent, the newly arrived people who crossed the land bridge almost immediately
set about wiping out hundreds of species of large animals, and they did this several thousand
years before the white man showed up, to accelerate the process.
And what was the condition of life? Loving, peaceful, harmonious? Hardly: the early peoples
of the New World lived in a state of constant warfare. Generations of hatred, tribal hatreds,
constant battles. The warlike tribes of this continent are famous: the Comanche, Sioux, Apache,
Mohawk, Aztecs, Toltec, Incas. Some of them practiced infanticide, and human sacrifice. And
those tribes that were not fiercely warlike were exterminated, or learned to build their villages
high in the cliffs to attain some measure of safety.
How about the human condition in the rest of the world? The Maori of New Zealand committed
massacres regularly. The dyaks of Borneo were headhunters. The Polynesians, living in an environment
as close to paradise as one can imagine, fought constantly, and created a society so hideously
restrictive that you could lose your life if you stepped in the footprint of a chief. It was
the Polynesians who gave us the very concept of taboo, as well as the word itself.
The noble savage is a fantasy, and it was never true. That anyone still believes it, 200
years after Rousseau, shows the tenacity of religious myths, their ability to hang on in the
face of centuries of factual contradiction.
And what about indigenous peoples, living in a state of harmony with the Eden-like environment?
Well, they never did.
On this continent, the newly arrived people who crossed the land bridge almost immediately
set about wiping out hundreds of species of large animals, and they did this several thousand
years before the white man showed up, to accelerate the process.
And what was the condition of life? Loving, peaceful, harmonious? Hardly: the early peoples
of the New World lived in a state of constant warfare. Generations of hatred, tribal hatreds,
constant battles. The warlike tribes of this continent are famous: the Comanche, Sioux, Apache,
Mohawk, Aztecs, Toltec, Incas. Some of them practiced infanticide, and human sacrifice. And
those tribes that were not fiercely warlike were exterminated, or learned to build their villages
high in the cliffs to attain some measure of safety.
How about the human condition in the rest of the world? The Maori of New Zealand committed
massacres regularly. The dyaks of Borneo were headhunters. The Polynesians, living in an environment
as close to paradise as one can imagine, fought constantly, and created a society so hideously
restrictive that you could lose your life if you stepped in the footprint of a chief. It was
the Polynesians who gave us the very concept of taboo, as well as the word itself.
The noble savage is a fantasy, and it was never true. That anyone still believes it, 200
years after Rousseau, shows the tenacity of religious myths, their ability to hang on in the
face of centuries of factual contradiction.
Yes, but it don't legitimate white europeans to act in the same way in "foreign' lands,
White colonizers just act in the same way not-so-noble savage ones,
People prefer unequal societies for the reason that they in fact they do not mind
inequality if it is based on rewards for effort.
People don't prefer unequal societies, they tend to "rationalize' that this is a necessary
evil. But i doubt most people prefer unequal/inequal societies
Read More
So, when people are asked to distribute resources among a small number of people in a lab
study, they insist on an exactly equal distribution. But when people are asked to distribute
resources among a large group of people in the actual world, they reject an equal distribution,
and prefer a certain extent of inequality. How can the strong preference for equality found
in public policy discussion and laboratory studies coincide with the preference for societal
inequality found in political and behavioural economic research?
However, to entertain your proposition, please tell us more about your friend.
He wasn't a friend, just someone I met a few times; friend of a friend. For example: when leaving
a party, the guy would just put on a jacket, anyone's jacket. Because a jacket is a jacket, it's
a thing that serves the purpose. This sort of thing.
Native Americans did on wives
So, maybe they had some form of 'ownership' of women, so what. I'm not saying that there can be
only two kinds of social organizations, there are many. For us, for our natural habitat, 'ownership',
'wealth', 'property', 'wage', 'debt', 'market', 'deserves' are the most basic concepts that we
never question. They are our deepest underlying assumptions, internalized from the most early
age. But I don't think they are embedded in human nature. So he could have committed theft, which
is all fine and good until he takes your jacket but hasn't brought one of his own. This is, in
fact, a common problem with communes: the "free rider" problem. Such individuals in Alberta cause
significant social disharmony, for a real world example, and escalate into violence and robbery.
Ownership of property and labor may be partially a social concept, but it is an useful social
technology that promotes development of society. I think contrary to your thoughts, they are often
questioned but its essentially one of the most effective methods for living in the modern world.
I think that you may not considering the effect of technology and social adaptation as part
of that technology; as I mentioned elsewhere, hunter-gatherer groups tend not to have a concept
of property and wealth, because they can't accumulate it. But once stationary agriculture is common,
accumulation of wealth and methods to defend it become common, which means that concepts of property
and inequality exist. Read More
@Trollmonster666 How about symmetry? "How about symmetry?" I think we're looking for a word
that contains some of the sentiment of 'fraternity' without the notion, certainly apparent in
retrospect, of being compulsory. Mao
Cheng Ji ,
April 19, 2017 at 3:15 pm GMT \n
200 Words
@Daniel Chieh So he could have committed theft, which is all fine and good until he takes
your jacket but hasn't brought one of his own. This is, in fact, a common problem with communes:
the "free rider" problem. Such individuals in Alberta cause significant social disharmony, for
a real world example, and escalate into violence and robbery.
Ownership of property and labor may be partially a social concept, but it is an useful social
technology that promotes development of society. I think contrary to your thoughts, they are often
questioned but its essentially one of the most effective methods for living in the modern world.
I think that you may not considering the effect of technology and social adaptation as part
of that technology; as I mentioned elsewhere, hunter-gatherer groups tend not to have a concept
of property and wealth, because they can't accumulate it. But once stationary agriculture is common,
accumulation of wealth and methods to defend it become common, which means that concepts of property
and inequality exist.
but it is an useful social technology that promotes development of society
I don't know what 'useful' might mean in this context. Inevitable, that's for sure. Rousseau
wrote:
The first person who, having enclosed a plot of land, took it into his head to say this
is mine and found people simple enough to believe him was the true founder of civil society.
What crimes, wars, murders, what miseries and horrors would the human race have been spared,
had some one pulled up the stakes or filled in the ditch and cried out to his fellow men: "Do
not listen to this imposter. You are lost if you forget that the fruits of the earth belong
to all and the earth to no one!"
But then he writes:
But it is quite likely that by then things had already reached the point where they could
no longer continue as they were. For this idea of property, depending on many prior ideas which
could only have arisen successively, was not formed all at once in the human mind. It was necessary
to make great progress, to acquire much industry and enlightenment, and to transmit and augment
them from one age to another, before arriving at this final state in the state of nature.
If we were truly equal, none of us could be smarter, more industrious and certainly not more
successful than the least of us. The kids seem capable of grasping this fact.
200 Words If I recall correctly from my reading of Frans DeWaal's work with chimpanzees at
the Yerkes National Primate Research Center, two experiments seem relevant here.
In one, two chimps in adjoining cages were given treats for pressing a button or pulling a
lever. One chimp was given a slice of cucumber, the other a grape, which as a sweet is the more
desirable of the two rewards. The chimp who was given the cucumber, seeing that his peer was given
a better reward for the same endeavor eventually went on strike. This is suggestive of a feeling
of unfairness, injustice and resentment.
In another trial, every time one chimp was rewarded with a treat for pulling the lever his
companion–visible to him–was given a electric shock. After a few trials chimp #1 made the connection
and–out of sympathy apparently–stopped pulling the lever, forsaking his treat.
So, DeWaal concludes that "Morality" or in this case a sense of fairness, didn't begin with
an awakened, enlightened consciousness due to any "higher" spirituality. It is part and parcel
of and to our nature as primates and builds on fellow-feeling. Hard to argue with this.
Read More
"In 2011, De Waal and his co-workers were the first to report that chimpanzees given
a free choice between helping only themselves or helping themselves plus a partner, prefer
the latter. In fact, De Waal does not believe these tendencies to be restricted to humans and
apes, but views empathy and sympathy as universal mammalian characteristics, a view that over
the past decade has gained support from studies on rodents and other mammals, such as dogs.
He and his students have also extensively worked on fairness, leading to a video that went
viral on inequity aversion among capuchin monkeys. The most recent work in this area was the
first demonstration that given a chance to play the Ultimatum game, chimpanzees respond in
the same way as children and human adults by preferring the equitable outcome."
@ThreeCranes
If I recall correctly from my reading of Frans DeWaal's work with chimpanzees at the Yerkes
National Primate Research Center, two experiments seem relevant here.
In one, two chimps in adjoining cages were given treats for pressing a button or pulling a
lever. One chimp was given a slice of cucumber, the other a grape, which as a sweet is the more
desirable of the two rewards. The chimp who was given the cucumber, seeing that his peer was given
a better reward for the same endeavor eventually went on strike. This is suggestive of a feeling
of unfairness, injustice and resentment.
In another trial, every time one chimp was rewarded with a treat for pulling the lever his
companion--visible to him--was given a electric shock. After a few trials chimp #1 made the connection
and--out of sympathy apparently--stopped pulling the lever, forsaking his treat.
So, DeWaal concludes that "Morality" or in this case a sense of fairness, didn't begin with
an awakened, enlightened consciousness due to any "higher" spirituality. It is part and parcel
of and to our nature as primates and builds on fellow-feeling. Hard to argue with this.
in this case a sense of fairness, didn't begin with an awakened, enlightened consciousness
due to any "higher" spirituality
I think it should be pretty obvious because lack of fairness is just like lack of symmetry
in some geometric pattern. It is visible right away. It strikes you but in amoral landscape. It
takes much more effort (cognitive, conceptual and linguistic) to justify and eventually internalize
the lack of fairness. The default is fairness except for the ones who are not fair because they
are morally defective. They are just tone deaf. They do not see the beauty of Kant's categorical
imperatives.
People prefer unequal societies for the reason that they in fact they do not mind inequality
if it is based on rewards for effort.
People don't prefer unequal societies, they tend to ''rationalize' that this is a necessary evil.
But i doubt most people prefer unequal/inequal societies... There never has been and never will
be 'equal' human societies.
The ones that tried were dismal failures simply because we are not all equal.
Read More Wally
,
April 20, 2017 at 5:26 am GMT \n
"In 2011, De Waal and his co-workers were the first to report that chimpanzees given a free
choice between helping only themselves or helping themselves plus a partner, prefer the latter.
In fact, De Waal does not believe these tendencies to be restricted to humans and apes, but views
empathy and sympathy as universal mammalian characteristics, a view that over the past decade
has gained support from studies on rodents and other mammals, such as dogs. He and his students
have also extensively worked on fairness, leading to a video that went viral on inequity aversion
among capuchin monkeys. The most recent work in this area was the first demonstration that given
a chance to play the Ultimatum game, chimpanzees respond in the same way as children and human
adults by preferring the equitable outcome." Who decides what is "equitable"?
Read More
Counting accumulations of the measurable as a method of judging fairness or in/equality
would seem a materialist trap, very US consumer. I see no mention of Bhutan's happiness index
here.
Those who decide not to participate in work towards normalized social goals have a role too;
they give the overachievers a group to compare themselves with and a consequent boost to their
psychic well being. What's the point of a Lexus if everyone drives them?
Read More
Since most people have not grown up in the extreme circumstances of a commune, this still applies
to the vast majority of people and the model is useful. However, to entertain your proposition,
please tell us more about your friend.
My understanding of individuals raised from non-property owning societies still have certain
notions of want and possession, for example Native Americans did on wives. On top of that, due
to the success of property-owning societies, this suggests that capitalism is overall adaptive
and advantageous. Native Americans were devout property owners. The myth of native communism has
long been debunked. Read More
@dearieme
"Liberty, Proportionality, and Selective Association"?
I'd settle for Liberty, Proportionality, and .....: what?
I wouldn't say 'charity' because it would be misinterpreted. So would 'love'. 'Kindness'?
How about 'Amity'?
P.S. I'm no bible-basher but that book is sound on coveting, inadvisability of. I think Jesus
lacked the instinct of moral indignation at free-loaders. That, for example, he couldn't see how
impossible it would be to organize labor if everyone got paid the same, no matter how long he
worked.
Lots of times, what Jesus recommends is totally effective but If Christian societies had ever
seriously extended the forgive-your-neighbor principle regionally, let alone universally, their
guts would be in seven times seventy places.
January 20, 2017 Rothschild Family Wealth is Five Times that of World's Top 8 Billionaires
Combined
A recent report by Oxfam International highlights the dramatic rise in income equality by noting
that the combined wealth of the world's top 8 individual billionaires is more than the lower half
of the world's population, some 3.6 billion people. The intention of the report was to bring awareness
to the unfairness and injustice inherent in our global economic system.
200 Words Can't say that I disagree with the researchers conclusions in principle. But when
it comes to the subject of fairness vs. equality in economic issues problems arise. It seems reasonable
that a janitor who works ten hours (including two hours overtime) should receive more compensation
than a janitor who works eight hours (or less). Similarly, a chemist who works longer hours than
another chemist should receive more compensation. But and here's the rub should the rate of compensation
to a janitor be the same as that of a chemist and vice versa? I think not, and the reason is obvious.
True economic equality in theory can only exist if everyone were paid the same amount regardless
of occupation (thus a janitor would make the same amount as a chemist). This would entail not
so much an economic revolution as a psychological revolution-a prospect that, to put it mildly,
is not very likely–except possibly in the collective minds of the Sanderistas.
Read More
Generation of "responses" is promulgated by keeping the level of discussion very simple
minded and generic: equality vs reward-for-effort. Major considerations are (deliberately?) ignored
with such a formulation.
Equality is easy to calculate and apply. Reward-for-effort is not and is easily subject to
"corruption" (over-reward due to power-control that can include abuse of those "under-rewarded").
Anyone who advocates "reward-for-effort" therefore needs to START by proposing a system that guarantees
that this does not degenerate into corruption.
Has anyone ever been successful in establishing a social system in which "reward-for-effort"
did NOT degenerate into corruption? Perhaps as long ago as Plato usable systems were proposed
(maximum allowed difference between poor/rich = 4), but these have never been implemented because
of the tendency to corruption inherent in "reward-for-effort"?
Certainly we have plenty of evidence that present practice of "reward-for-effort" is highly
corrupted. Read More
200 Words
@hyperbola Generation of "responses" is promulgated by keeping the level of discussion very
simple minded and generic: equality vs reward-for-effort. Major considerations are (deliberately?)
ignored with such a formulation.
Equality is easy to calculate and apply. Reward-for-effort is not and is easily subject to
"corruption" (over-reward due to power-control that can include abuse of those "under-rewarded").
Anyone who advocates "reward-for-effort" therefore needs to START by proposing a system that guarantees
that this does not degenerate into corruption.
Has anyone ever been successful in establishing a social system in which "reward-for-effort"
did NOT degenerate into corruption? Perhaps as long ago as Plato usable systems were proposed
(maximum allowed difference between poor/rich = 4), but these have never been implemented because
of the tendency to corruption inherent in "reward-for-effort"?
Certainly we have plenty of evidence that present practice of "reward-for-effort" is highly
corrupted. No model will perfectly match reality. Equality actually isn't easy to calculate due
to the free rider problem, which isn't just something to handwave away – it is one of the most
common ways for communes and the like to die.
Beyond that, traditional systems which reflected labor and risk taking resonated pretty well
with people – the notion of someone working harder in the fields was easy to justify, as was the
occupation of the soldier or even the brigand.
This isn't as much the case these days when so much of wealth is tied up by the financial sector
of essentially, what was traditionally considered as usury. But the fundamental truth that inequality-based
systems do tend to outcompete equality-based systems.
Corruption, incidentally, is a cost on a system and drags it down. So in a way, its self-healing,
as a system that's too corrupt will become incapable of outcompeting a less corrupt and more efficient
system. Read More
@anonymous Can't say that I disagree with the researchers conclusions in principle. But when
it comes to the subject of fairness vs. equality in economic issues problems arise. It seems reasonable
that a janitor who works ten hours (including two hours overtime) should receive more compensation
than a janitor who works eight hours (or less). Similarly, a chemist who works longer hours than
another chemist should receive more compensation. But...and here's the rub...should the rate of
compensation to a janitor be the same as that of a chemist and vice versa? I think not, and the
reason is obvious.
True economic equality in theory can only exist if everyone were paid the same amount regardless
of occupation (thus a janitor would make the same amount as a chemist). This would entail not
so much an economic revolution as a psychological revolution---a prospect that, to put it mildly,
is not very likely--except possibly in the collective minds of the Sanderistas. The most psychologically
difficult part of the modern economy is "why should someone be able to make more money by having
money" through interest-bearing systems. While its very logical from a capitalistic perspective,
its definitely the part which I think our instincts find least understandable.
The rich history against usury throughout history, including in the East, are a good example
that many people found the notion difficult to accept especially when it seemed like it accumulated
wealth in a class without connection to historical notions of land, protection, fealty, etc.
Read More
This would suggest that people have an innate preference for socialism and the re-distribution
of wealth.
You start well, =)
But not, =(
Socialism don't/ never re-distribute[d] ideally the wealth NOR the power-decision, something
extremely valuable as wealth in terms of individual well being.
So, in the next time, try to analyze firstly this differences between what socialistic propaganda
tell you and what real socialism, aka, communism really is.
Less inequal than capitalism*
Likely in some official socialist countries has been...
but still very inequal and extremely inequal in other values such free speech and proportional
fairness in individual power-decision = government deciding everything about your life without
any negotiation or dialogue between interested parts. You're confusing socialism with Socialism.
@dc.sunsets
Today's wealth inequality is entirely an artifact of the debt bubble and related Great Asset
Mania. It will decrease dramatically when the social mood mania sustaining it these last 35 years
rolls over.
I also note that the first thing deleted from any propaganda piece we read in "the news" is
context. We can't have the rubes deciding that it's okay for the surgeon who saved their mom's
life after her stroke to drive a nicer car and maybe KEEP what he or she made in income last year.
(Ramping taxes on the "working wealthy," i.e., people who have high incomes but are not Gates-Buffet
Rich, is Job One for Leftists when they're not celebrating another white guy suicide.)
Today's wealth inequality is entirely an artifact of the debt bubble and related Great Asset
Mania.
However, the debt bubble is/was the result of the pre-existing power and greed of the
financial sector to corrupt the political/media class into rigging the game. That power and greed
was restrained until the Soviet Union collapsed.
It will decrease dramatically when the social mood mania sustaining it these last 35 years
rolls over.
It will decrease dramatically when unrestrained usury leads to economic collapse as it always
does for a simple arithmetic reason
million people with $200/week to spend = $200 million demand
million people with $200/week
- repaying $150/week on their previous loans
- leaving $50/week to spend
= $150 million to the financial sector and $50 million demand
@Daniel
Chieh So he could have committed theft, which is all fine and good until he takes your jacket
but hasn't brought one of his own. This is, in fact, a common problem with communes: the "free
rider" problem. Such individuals in Alberta cause significant social disharmony, for a real world
example, and escalate into violence and robbery.
Ownership of property and labor may be partially a social concept, but it is an useful social
technology that promotes development of society. I think contrary to your thoughts, they are often
questioned but its essentially one of the most effective methods for living in the modern world.
I think that you may not considering the effect of technology and social adaptation as part
of that technology; as I mentioned elsewhere, hunter-gatherer groups tend not to have a concept
of property and wealth, because they can't accumulate it. But once stationary agriculture is common,
accumulation of wealth and methods to defend it become common, which means that concepts of property
and inequality exist. In the New York Times Magazine's first "Ethicist" column, Randy Gerber set
a problem: You're leaving a restaurant on a rainy day and find that someone took your umbrella
from the pail by the door. Is it okay to take someone else's? He said yes (but, if I remember
correctly, only one of equal or lesser value to yours; no advice on how to evaluate a pailful
of black umbrellas, though; and what if all of them are better than yours? And then, if you refrain
from taking a better one, you'll still get wet, which was the justification for taking someone
else's in the first place. And if you take a cheaper one, isn't that stealing from the lower classes?).
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@Bolt Counting accumulations of the measurable as a method of judging fairness or in/equality
would seem a materialist trap, very US consumer. I see no mention of Bhutan's happiness index
here.
Those who decide not to participate in work towards normalized social goals have a role too;
they give the overachievers a group to compare themselves with and a consequent boost to their
psychic well being. What's the point of a Lexus if everyone drives them? Are smokers included
in Bhutan's happiness index? They can get five years in prison for violating the draconian rules.
But they're smokers, so nobody cares, right? Read
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@anonymous
Can't say that I disagree with the researchers conclusions in principle. But when it comes
to the subject of fairness vs. equality in economic issues problems arise. It seems reasonable
that a janitor who works ten hours (including two hours overtime) should receive more compensation
than a janitor who works eight hours (or less). Similarly, a chemist who works longer hours than
another chemist should receive more compensation. But...and here's the rub...should the rate of
compensation to a janitor be the same as that of a chemist and vice versa? I think not, and the
reason is obvious.
True economic equality in theory can only exist if everyone were paid the same amount regardless
of occupation (thus a janitor would make the same amount as a chemist). This would entail not
so much an economic revolution as a psychological revolution---a prospect that, to put it mildly,
is not very likely--except possibly in the collective minds of the Sanderistas.
True economic equality in theory can only exist if everyone were paid the same amount regardless
of occupation
No, true economic equality can only exist when no one is paid anything at all. Everything is
freely shared, like, say, books in the library, or food between family members, or the well in
the village center. Simple as that. Read More
200 Words Thompson sure sounds scientific, until he denigrates the scientific process. "The
lab isn't like the real world." Readers should give up right there, because refuting gibberish
takes time and a little thought.
But the main argument (or apology) from writers like Thompson (or Thomas Friedman) is that
those that are more equal than you stoically pulled themselves up harder by their own shoes than
you did. Your complaints give you away.
The appeal to these folksy simple beliefs is enourmous but many of the wealthy will maintain
that they've been granted wealth because of God's will, or tithing to their church.
So fans of the meritocratic fraud will work harder. (Working dumber doesn't mean anything to
them.) Just think, one day, if you're nice enough, your large corporation can break the law with
impunity, you can write a a piece of software for the FIRE sector, start your own web blog on
politics that datamines (for free) the thoughts, snark and feelings of the proles, and when you
are CEO you'll tell the world you damn well earned all of it. Why wouldn't you?
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@Daniel Chieh The most psychologically difficult part of the modern economy is "why should
someone be able to make more money by having money" through interest-bearing systems. While its
very logical from a capitalistic perspective, its definitely the part which I think our instincts
find least understandable.
The rich history against usury throughout history, including in the East, are a good example
that many people found the notion difficult to accept especially when it seemed like it accumulated
wealth in a class without connection to historical notions of land, protection, fealty, etc. "why
should someone be able to make more money by having money" through interest-bearing systems
@Daniel Chieh No model will perfectly match reality. Equality actually isn't easy to calculate
due to the free rider problem, which isn't just something to handwave away - it is one of the
most common ways for communes and the like to die.
Beyond that, traditional systems which reflected labor and risk taking resonated pretty well
with people - the notion of someone working harder in the fields was easy to justify, as was the
occupation of the soldier or even the brigand.
This isn't as much the case these days when so much of wealth is tied up by the financial sector
of essentially, what was traditionally considered as usury. But the fundamental truth that inequality-based
systems do tend to outcompete equality-based systems.
Corruption, incidentally, is a cost on a system and drags it down. So in a way, its self-healing,
as a system that's too corrupt will become incapable of outcompeting a less corrupt and more efficient
system.
too corrupt will become incapable of outcompeting a less corrupt and more efficient system.
What if everything is one same global system? It competing with what then?
Read More
too corrupt will become incapable of outcompeting a less corrupt and more efficient system.
What if everything is one same global system? It competing with what then? Ah, yes, one world
government. The solution to all ills, how silly of me not to think of it. In all realism, the
only way such a system will rise to dominance is through outcompeting all other memes. It hasn't,
so there's no egg for this chicken to rise about.
When attempted, as in socialistic governments, it gets corrupted because basically, human nature.
Its only been shown to work in monestaries where living standard is intentionally low, and in
a limited extent where wealth is impossible to accumulate. I'll revisit the vitality of it after
Giant Meteor visits us, but I suspect the land-acquiring raiders will still come out ahead.
Read More
True economic equality in theory can only exist if everyone were paid the same amount regardless
of occupation
No, true economic equality can only exist when no one is paid anything at all. Everything is freely
shared, like, say, books in the library, or food between family members, or the well in the village
center. Simple as that. So who gets the last slice of pizza?
Even in familial systems, equality didn't exist; it just has less hostile negotiation. And
under stress, Bushmen practiced both infanticide as well as abandoning the old.
You don't need currency to have an adequate stand-in for exchange of power and value.
Read More
400 Words It's an interesting chart. Being involved with consumer bankruptcy work, I regularly
meet and talk to many people who fit right into the lower end of the chart. My anecdotal opinion
is that I find charts like the this one be inaccurate and skewed representations of the underlying
condition of the people involved.
To begin, the chart does not associate dollar figures the various percentages of wealth. I
haven't made a career of researching these facts, but I've seen the figure around that the lowest
20% of the population has a negative net worth. This means that if I could talk the lowest 20%
of the people referenced in the chart into coming into my office and filing a Chapter 7 Bankruptcy,
a legal action the majority of them would surely qualify for, and if, after the bankruptcy, I
gave them $10 they would, all of a sudden, be thrown up into the the next highest most wealthy
group of Americans. I"ve no time for researching it today, but I suspect it wouldn't take much
more to push the forth lowest group into the lower end of the middle.
Another one of my other problems with these charts is they frequently exclude items most of
us consider to be forms of wealth, in their determination of how much wealth people actually have.
Pensions, including vested pensions, are frequently excluded. The rights to receive social security
and other benefit programs is almost always excluded (maybe they are telling us something). This,
of course greatly amplifies the sense that their are a lot of terribly destitute people around.
Without seeing the dollar numbers or the components of the wealth included and excluded, these
types of charts lend themselves to distortions.
To accumulate wealth at any level you have to have an interest in accumulating wealth. Accumulating
wealth is a lot different than being showered with it. Everyone wants to win the lotto. Far fewer
will save $100. Not with the competition from vacations and automobiles and electronic entertainment.
It's not just hippies or tribesmen with no concept of competition who will not accumulate. I recommend
that anyone who believes there is not a large percentage of the population that has absolutely
no interest in taking any action designed toward accumulating wealth, who actively use it with
not intention of replacing it, get out a bit more, meet new people just to know them. You don't
have to invite them to your home. Read More
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This would suggest that people have an innate preference for socialism and the re-distribution
of wealth.
You start well, =)
But not, =(
Socialism don't/ never re-distribute[d] ideally the wealth NOR the power-decision, something
extremely valuable as wealth in terms of individual well being.
So, in the next time, try to analyze firstly this differences between what socialistic propaganda
tell you and what real socialism, aka, communism really is.
Less inequal than capitalism*
Likely in some official socialist countries has been...
but still very inequal and extremely inequal in other values such free speech and proportional
fairness in individual power-decision = government deciding everything about your life without
any negotiation or dialogue between interested parts. This comment reflects a serious case of
redneck capitalist paranoia syndrome.
We all know USA is a Orwellian oligarchy police state and it is a warmonger and war criminal
on the international arena despite it claims itself a democracy, so shall we say democracy does
not work because USA's failure to implement democracy ideally? On the same token, it is moronic
to say Socialism does not work because some jackals hijacked Socialism for their own greed just
like the 'god-fearing' morally defunct evil 'puritans' hijacked democracy in the USA to fill their
own greed. Read More
@Jason Liu It's almost as though egalitarianism is a primal, unthinking position mostly adopted
by children who don't know any better. The simplest and most knee-jerk definition of "fairness",
defined by feeling.
@RobRich
Native Americans were devout property owners. The myth of native communism has long been debunked.
I would be very sceptical about any proof provided by the White to debunk anybody anything, historically
the Whtie demonizes or badmouths others with fake news to make themselve superior. Orientalism
and casting South American civilizations as bloodthirty barbarians are some of the ancient examples,
phantom WMD and Maidan Square mob putsch are the recent examples.
Read More Troll:
Daniel
Chieh Joe Wong
,
April 20, 2017 at 11:15 pm GMT \n
@OutWest
Perhaps it's the engineer in me, but I've observed that some driving force is necessary to
make a process run. Voltage, temperature/pressure difference, or maybe wealth disparity are examples.
I had the choice of working in a local mill for good wages but a killing environment, or working
my way through college with little money. Intermediate term sacrifice paid long tem dividends
for me and my kids/grandkids. There's also a good argument to be made that society is also better
served by such self-serving efforts.
If everyone is truly equal, what is there to drive society? I remember one epsoide in the Star
Trek, Jean-Luc Picard explained humanity to an less developed alien that in the 23rd century,
human is no longer valued material procession, human being is motived by wanting to excel, to
make himself and the human being better. Are you saying we never can get there?
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And what about indigenous peoples, living in a state of harmony with the Eden-like environment?
Well, they never did.
On this continent, the newly arrived people who crossed the land bridge almost immediately
set about wiping out hundreds of species of large animals, and they did this several thousand
years before the white man showed up, to accelerate the process.
And what was the condition of life? Loving, peaceful, harmonious? Hardly: the early peoples
of the New World lived in a state of constant warfare. Generations of hatred, tribal hatreds,
constant battles. The warlike tribes of this continent are famous: the Comanche, Sioux, Apache,
Mohawk, Aztecs, Toltec, Incas. Some of them practiced infanticide, and human sacrifice. And
those tribes that were not fiercely warlike were exterminated, or learned to build their villages
high in the cliffs to attain some measure of safety.
How about the human condition in the rest of the world? The Maori of New Zealand committed
massacres regularly. The dyaks of Borneo were headhunters. The Polynesians, living in an environment
as close to paradise as one can imagine, fought constantly, and created a society so hideously
restrictive that you could lose your life if you stepped in the footprint of a chief. It was
the Polynesians who gave us the very concept of taboo, as well as the word itself.
The noble savage is a fantasy, and it was never true. That anyone still believes it, 200
years after Rousseau, shows the tenacity of religious myths, their ability to hang on in the
face of centuries of factual contradiction.
Even in familial systems, equality didn't exist; it just has less hostile negotiation. And
under stress, Bushmen practiced both infanticide as well as abandoning the old.
@Daniel
Chieh Ah, yes, one world government. The solution to all ills, how silly of me not to think
of it. In all realism, the only way such a system will rise to dominance is through outcompeting
all other memes. It hasn't, so there's no egg for this chicken to rise about.
When attempted, as in socialistic governments, it gets corrupted because basically, human nature.
Its only been shown to work in monestaries where living standard is intentionally low, and in
a limited extent where wealth is impossible to accumulate. I'll revisit the vitality of it after
Giant Meteor visits us, but I suspect the land-acquiring raiders will still come out ahead.
..where living standard is intentionally low, and in a limited extent where wealth is impossible
to accumulate..
This ignores the cultural conditioning accepted by the group, both the monk's and the west's.
Human nature is a social construct – you can't argue on the one hand that we're are above animals
because "self awareness", but on the other hand human nature/law of the jungle/social Darwinism
determines our interactions.
The point is, the monks are trained in self awareness and act as a guide to accessing our better
natures – fair and equitable distribution should be a hallmark of our humanity not an exception.
Read More
200 Words
@Daniel Chieh So who gets the last slice of pizza?
Even in familial systems, equality didn't exist; it just has less hostile negotiation. And
under stress, Bushmen practiced both infanticide as well as abandoning the old.
You don't need currency to have an adequate stand-in for exchange of power and value.
So who gets the last slice of pizza?
Okay, let's see. Where I'm from, the social norm was that no one takes the last piece of bread.
What you do, you break it, and take half. Then the next person can take half of that, and so on,
until it turns into a crumb.
In other places I've been, the norm was: you point to the last slice and ask: 'anyone want
this?' Everyone would say 'no', and then you can take it.
But in general, the typical anarchist approach is this: those who are perceived as consistently
greedy (or otherwise 'anti-social') first get punished by ostracism, from the mildest form to
severe (refusal to communicate with the offender). And then, if their behavior doesn't change,
they get expelled from the commune.
As for
Bushmen practiced both infanticide as well as abandoning the old.
what of it? Social norms ('morality') are not absolute, they are dictated by the environment.
Where the alternative to infanticide and abandoning the old is extinction, they become social
norms. Read More
300 Words Additional monetary wealth is valued in relation to existing wealth, so that a 1%
increase has the same perceived utility whether one has $1M or $1000. This implies a logarithmic
utility function for monetary wealth, an idea which is accepted in economics since it is equivalent
to setting an investment goal of maximizing percentage returns, but the inescapable mathematical
implication of logarithmic utility of wealth is unpopular among economists. If we assume that
people have roughly equal capacity for enjoyment, then the aggregate utility of wealth for a society
is maximized by its members having roughly equal wealth. For instance, a person with $100 gets
a utility of log(100) = 2 from that, and someone with $1B gets a utility of log(10^9) = 9. If
the billionaire's wealth is distributed so that 10M people each have $100, then the aggregate
utility of that $1B rises from 9 to 20M, or over two million times as much utility.
Since wealth is valued logarithmically the effectiveness of rewards falls off exponentially,
which means either that it doesn't make sense to give large rewards to individuals (assuming a
goal of maximizing aggregate utility), or that rewards should be exponentially larger to maintain
their effectiveness (assuming a goal of making rewards effective in individual cases). The latter
way of thinking by people pursuing rewards for themselves is why wealth inequality is so great.
At each step of the way, people aim to get that next few percent increase in their wealth, which
becomes larger and larger in absolute terms. It's perfectly rational from the view of each individual,
but it results in nearly all monetary rewards going to the people who get the least marginal utility
from that money.
Those who contribute to society need to be rewarded to encourage more such contributions, but
money quickly becomes an uneconomical way of rewarding people once they have more than enough
for their needs - other rewards such as status become more effective and affordable for society.
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This would suggest that people have an innate preference for socialism and the re-distribution
of wealth.
You start well, =)
But not, =(
Socialism don't/ never re-distribute[d] ideally the wealth NOR the power-decision, something
extremely valuable as wealth in terms of individual well being.
So, in the next time, try to analyze firstly this differences between what socialistic propaganda
tell you and what real socialism, aka, communism really is.
Less inequal than capitalism*
Likely in some official socialist countries has been...
but still very inequal and extremely inequal in other values such free speech and proportional
fairness in individual power-decision = government deciding everything about your life without
any negotiation or dialogue between interested parts. I must object.
Socialism does re-distribute the meager wealth of the working class into the pockets of the
non working class and state owned business in exchange for handouts designed to keep you dependent
on a system that hates you. Read More
Even in familial systems, equality didn't exist; it just has less hostile negotiation. And
under stress, Bushmen practiced both infanticide as well as abandoning the old.
You don't need currency to have an adequate stand-in for exchange of power and value. "So who
gets the last slice of pizza?"
..where living standard is intentionally low, and in a limited extent where wealth is impossible
to accumulate..
This ignores the cultural conditioning accepted by the group, both the monk's and the west's.
Human nature is a social construct - you can't argue on the one hand that we're are above animals
because "self awareness", but on the other hand human nature/law of the jungle/social Darwinism
determines our interactions.
The point is, the monks are trained in self awareness and act as a guide to accessing our better
natures - fair and equitable distribution should be a hallmark of our humanity not an exception.
We aren't really all that self-aware. Even the existence of free will may be in doubt.
More importantly, as stated before, it doesn't work to outcompete other models. The monks might
indeed have a successful vow of poverty, but then people who don't have a vow of poverty but with
bigger axes come and take everything they have.
Okay, let's see. Where I'm from, the social norm was that no one takes the last piece of bread.
What you do, you break it, and take half. Then the next person can take half of that, and so on,
until it turns into a crumb.
In other places I've been, the norm was: you point to the last slice and ask: 'anyone want
this?' Everyone would say 'no', and then you can take it.
But in general, the typical anarchist approach is this: those who are perceived as consistently
greedy (or otherwise 'anti-social') first get punished by ostracism, from the mildest form to
severe (refusal to communicate with the offender). And then, if their behavior doesn't change,
they get expelled from the commune.
As for
Bushmen practiced both infanticide as well as abandoning the old.
...what of it? Social norms ('morality') are not absolute, they are dictated by the environment.
Where the alternative to infanticide and abandoning the old is extinction, they become social
norms.
But in general, the typical anarchist approach is this: those who are perceived as consistently
greedy (or otherwise 'anti-social') first get punished by ostracism, from the mildest form
to severe (refusal to communicate with the offender). And then, if their behavior doesn't change,
they get expelled from the commune.
Yup. And yet you seem knowledgeable enough not to need me to tell you the obvious results of
it because it happened historically and in reality – punishment systems resulted in people minimizing
effort. Even in North Korea, for example, the government found that by even slightly increasing
liberalization of farms and allowing some percentage of crops to be sold for individual possession
increased productivity by double-digit amounts.
People work harder when they feel like they will own the results. Negative consequences can
only motivate insofar as punishment motivated slaves – they will do the minimal effort. Indeed,
outperforming others can get you shamed because of that very mental aspect of proportionality.
Lack of property ownership just doesn't work, not with our brains the way it is.
This doesn't even go into aspects of the economy that are nonfungible, cannot be increased
and inherently limiting, such as high productivity land, something which humanity once had to
highly focus on. Now, Rousseau perhaps understood this, and deplored it – but it doesn't change
the fact that was the most efficient way to develop for humanity.
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but it is an useful social technology that promotes development of society
I don't know what 'useful' might mean in this context. Inevitable, that's for sure. Rousseau wrote:
The first person who, having enclosed a plot of land, took it into his head to say this is
mine and found people simple enough to believe him was the true founder of civil society. What
crimes, wars, murders, what miseries and horrors would the human race have been spared, had
some one pulled up the stakes or filled in the ditch and cried out to his fellow men: "Do not
listen to this imposter. You are lost if you forget that the fruits of the earth belong to
all and the earth to no one!"
But then he writes:
But it is quite likely that by then things had already reached the point where they could no
longer continue as they were. For this idea of property, depending on many prior ideas which
could only have arisen successively, was not formed all at once in the human mind. It was necessary
to make great progress, to acquire much industry and enlightenment, and to transmit and augment
them from one age to another, before arriving at this final state in the state of nature.
Social evolution... Maybe you are oversimplifying tbe position you are arguing against. It is
easy when discussing human nature to dismiss the idea that we have genes for respecting or being
greedy for property rights but the way to look at it is different.
Start by considering what is objectively good for enjoyable human society, especially on a
small scale, then consider what programming might be conducive to it. Just as it is a priori likely
thst there would be some genetic programming to help us not to be fooled by liars the strong and
reciprocal feeling for "mine" and "thine" needs programming that prevents taking no thought for
the morrow and being fecklessly indifferent to people damaging the tools and other artefacts one
has made. Read More Agree:
Daniel
Chieh
@Joe Wong This comment reflects a serious case of redneck capitalist paranoia syndrome.
We all know USA is a Orwellian oligarchy police state and it is a warmonger and war criminal
on the international arena despite it claims itself a democracy, so shall we say democracy does
not work because USA's failure to implement democracy ideally? On the same token, it is moronic
to say Socialism does not work because some jackals hijacked Socialism for their own greed just
like the 'god-fearing' morally defunct evil 'puritans' hijacked democracy in the USA to fill their
own greed. Your opinion
but the truth
"Socialism" is even worse than capitalism, this is its monumental sin.
Socialism does re-distribute the meager wealth of the working class into the pockets of the
non working class and state owned business in exchange for handouts designed to keep you dependent
on a system that hates you. Socialism or communism pretend to be democracy OR they are in the
end, the consumation of democratic path, the "people" governing itself.
200 Words
@Wizard of Oz Maybe you are oversimplifying tbe position you are arguing against. It is easy
when discussing human nature to dismiss the idea that we have genes for respecting or being greedy
for property rights but the way to look at it is different.
Start by considering what is objectively good for enjoyable human society, especially on a
small scale, then consider what programming might be conducive to it. Just as it is a priori likely
thst there would be some genetic programming to help us not to be fooled by liars the strong and
reciprocal feeling for "mine" and "thine" needs programming that prevents taking no thought for
the morrow and being fecklessly indifferent to people damaging the tools and other artefacts one
has made.
punishment systems resulted in people minimizing effort
I don't quite understand your point here. So, you're against punishment? Or, more specifically,
against punishing greed? So then, can I come over, take 'your' stuff, and walk away? I don't think
so.
Okay, I guess what you're saying is that socioeconomic models utilizing, in some reasonable,
orderly way, the concept of ownership lead to higher productivity, technological progress, and
all that. Well, sure, empirically this has been the story so far. What's not clear to me is:
1. that productivity and technological progress are all that good and desirable. The Amish don't
use electricity and they seem happy. And
2. that this is the universal rule for all times. Suppose a few decades from now all the reasonable
necessities are produced by unmanned machines, in abundant quantities. I don't know, 3-D printers,
or something. Do you still need to own stuff? When is enough enough?
Read More
@Joe Wong I would be very sceptical about any proof provided by the White to debunk anybody
anything, historically the Whtie demonizes or badmouths others with fake news to make themselve
superior. Orientalism and casting South American civilizations as bloodthirty barbarians are some
of the ancient examples, phantom WMD and Maidan Square mob putsch are the recent examples. Yes,
because whites are apparently a monolithic bloc dedicated to the suppression of everyone else,
especially Sweden these days. Please.
@Daniel
Chieh No model will perfectly match reality. Equality actually isn't easy to calculate due
to the free rider problem, which isn't just something to handwave away - it is one of the most
common ways for communes and the like to die.
Beyond that, traditional systems which reflected labor and risk taking resonated pretty well
with people - the notion of someone working harder in the fields was easy to justify, as was the
occupation of the soldier or even the brigand.
This isn't as much the case these days when so much of wealth is tied up by the financial sector
of essentially, what was traditionally considered as usury. But the fundamental truth that inequality-based
systems do tend to outcompete equality-based systems.
Corruption, incidentally, is a cost on a system and drags it down. So in a way, its self-healing,
as a system that's too corrupt will become incapable of outcompeting a less corrupt and more efficient
system. Already Adam Smith warned us that the system sold to us as "competitive capitalism" has
nothing to do with reality. We have been suffering from "corrupt mercantilism" since at least
then. It is no accident that our war for independence was fought against the jewish power family
monopolies of the "city of london" and their corrupt (government "licensed") East India Co.
Exactly how do you imagine your"competitive" system is going to get started (sometime) and then
be maintained? Read More
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punishment systems resulted in people minimizing effort
I don't quite understand your point here. So, you're against punishment? Or, more specifically,
against punishing greed? So then, can I come over, take 'your' stuff, and walk away? I don't think
so.
Okay, I guess what you're saying is that socioeconomic models utilizing, in some reasonable,
orderly way, the concept of ownership lead to higher productivity, technological progress, and
all that. Well, sure, empirically this has been the story so far. What's not clear to me is:
1. that productivity and technological progress are all that good and desirable. The Amish don't
use electricity and they seem happy. And
2. that this is the universal rule for all times. Suppose a few decades from now all the reasonable
necessities are produced by unmanned machines, in abundant quantities. I don't know, 3-D printers,
or something. Do you still need to own stuff? When is enough enough? You confused me a bit because
the opening quote was not mine but Daniel Chieh's. Had I time I would gladly follow you and J.M
Keynes in dreaming intelligently of the prospects for our grandchildren. Keynes in 1930 seemed
to imagine a world in which everyone could share his refined tastes. Now we would with at least
equal realism consider making available genetic engineering on a large scale .
Paul Krugman Gets Retail Wrong: They are Not Very Good Jobs
Paul Krugman used his column * this morning to ask why we don't pay as much attention to the
loss of jobs in retail as we do to jobs lost in mining and manufacturing. His answer is that in
large part the former jobs tend to be more white and male than the latter. While this is true,
although African Americans have historically been over-represented in manufacturing, there is
another simpler explanation: retail jobs tend to not be very good jobs.
The basic story is that jobs in mining and manufacturing tend to offer higher pay and are far
more likely to come with health care and pension benefits than retail jobs. A worker who loses
a job in these sectors is unlikely to find a comparable job elsewhere. In retail, the odds are
that a person who loses a job will be able to find one with similar pay and benefits.
A quick look at average weekly wages ** can make this point. In mining the average weekly wage
is $1,450, in manufacturing it is $1,070, by comparison in retail it is just $555. It is worth
mentioning that much of this difference is in hours worked, not the hourly pay. There is nothing
wrong with working shorter workweeks (in fact, I think it is a very good idea), but for those
who need a 40 hour plus workweek to make ends meet, a 30-hour a week job will not fit the bill.
This difference in job quality is apparent in the difference in separation rates by industry.
(This is the percentage of workers who lose or leave their job every month.) It was 2.4 percent
for the most recent month in manufacturing. By comparison, it was 4.7 percent in retail, almost
twice as high. (It was 5.2 percent in mining and logging. My guess is that this is driven by logging,
but I will leave that one for folks who know the industry better.)
Anyhow, it shouldn't be a mystery that we tend to be more concerned about the loss of good
jobs than the loss of jobs that are not very good. If we want to ask a deeper question, as to
why retail jobs are not very good, then the demographics almost certainly play a big role.
Since only a small segment of the workforce is going to be employed in manufacturing regardless
of what we do on trade (even the Baker dream policy will add at most 2 million jobs), we should
be focused on making retail and other service sector jobs good jobs. The full agenda for making
this transformation is a long one (higher minimum wages and unions would be a big part of the
picture, along with universal health care insurance and a national pension system), but there
is one immediate item on the agenda.
All right minded people should be yelling about the Federal Reserve Board's interest rate hikes.
The point of these hikes is to slow the economy and reduce the rate of job creation. The Fed's
concern is that the labor market is getting too tight. In a tighter labor market workers, especially
those at the bottom of the pecking order, are able to get larger wage increases. The Fed is ostensibly
worried that this can lead to higher inflation, which can get us to a wage price spiral like we
saw in the 70s.
As I and others have argued, *** there is little basis for thinking that we are anywhere close
to a 1970s type inflation, with inflation consistently running below the Fed's 2.0 percent target,
(which many of us think is too low anyhow). I'd love to see Krugman pushing the cause of full
employment here. We should call out racism and sexism where we see it, but this is a case where
there is a concrete policy that can do something to address it. Come on Paul, we need your voice.
PK: Consider what has happened to department stores. Even as Mr. Trump was boasting about saving
a few hundred jobs in manufacturing here and there, Macy's announced plans to close 68 stores
and lay off 10,000 workers. Sears, another iconic institution, has expressed "substantial doubt"
about its ability to stay in business.
Overall, department stores employ a third fewer people now than they did in 2001. That's half
a million traditional jobs gone - about eighteen times as many jobs as were lost in coal mining
over the same period.
And retailing isn't the only service industry that has been hit hard by changing technology.
Another prime example is newspaper publishing, where employment has declined by 270,000, almost
two-thirds of the work force, since 2000. ...
(To those that had them, they were probably
pretty decent jobs, albeit much less 'gritty'
than mining or manufacturing.)
There is a lot of elitism to go around. People will be much more reluctant to express publicly
the same as in private (or pseudonymously on the internet?). But looking down on other people
and their work is pretty widespread (and in either case there is a lot of assumption about the
nature of the work and the personal attributes of the people doing it - usually of a derogatory
type in both cases).
I find it plausible that Krugman was referring those widespread stereotypes about job categories
that (traditionally?) have not required a college degree, or have been relatively at the low end
of the esteem scale in a given industry (e.g. in "tech" and manufacturing, QA/testing related
work).
It must be possible to comment on such stereotypes, but there is of course always the risk
of being thought to hold them oneself, or indeed being complicit in perpetuating them.
As a thought experiment, I suggest reviewing what you yourself think about occupations not
held by yourself, good friends, and family members and acquaintainces you like/respect (these
qualifications are deliberate). For example, you seem to think not very highly of maids.
Of course, being an RN requires significantly more training than being a maid, and not just
once when you start in your career. But at some level of abstraction, anybody who does work where
their autonomy is quite limited (i.e. they are not setting objectives at any level of the organization)
is "just a worker". That's the very stereotype we are discussing, isn't it?
Krugman thinks nurses are the equivalent of maids...
[ The problem is that Paul Krugman dismissed the work of nurses and maids and gardeners as
"menial." I find no evidence that Krugman understands that even after conditionally apologizing
to nurses. ]
"... Wealthy individuals and large corporations are able to capture and decide on their own what to do with the surplus, with all the social ramifications associated with their decisions to invest where and when they want-or not to invest, and thus to accumulate cash, repay debt, and repurchase their own equity shares. ..."
"... Any proposals to decrease tax rates for wealthy individuals and corporations will only increase that private control. ..."
Why is it anyone would want to save such an economic system?
April 11, 2017
from David Ruccio
"If you put the two trends together-increased individual income inequality and increased corporate
savings -- what we're witnessing then is increasing private control over the social surplus.
Wealthy individuals and large corporations are able to capture and decide on their own what
to do with the surplus, with all the social ramifications associated with their decisions to invest
where and when they want-or not to invest, and thus to accumulate cash, repay debt, and repurchase
their own equity shares.
Any proposals to decrease tax rates for wealthy individuals and corporations will only increase
that private control.
Why is it anyone would want to save such an economic system?"
Possibly I do not understand the matter, but I can find no evidence that corporate "saving" as
a share of GDP in the United States is increasing. Actually, the reverse.
The global corporate saving glut: Long-term evidence
By Peter Chen, Loukas Karabarbounis, and Brent Neiman
Corporate saving has increased relative to GDP and corporate investment across the world over
the past three decades, reflecting how the global decline in the labour has led to increased corporate
profits. This column characterises these trends using national income accounts and firm-level
data, and relates them to firm characteristics and the accumulation of financial assets. In response
to declines in the components of the cost of capital, a model with capital market imperfections
generates an increase in corporate saving similar to that found in the data.
[ I am grateful for the reference, but I had already read the paper carefully and found no
reason to agree with the assertion that there is long term evidence of a corporate saving glut.
]
National accounts data include sector accounts that divide the economy into the corporate sector,
the government sector, and the household and non-profit sector.
For most economies, the corporate sector can be further disaggregated into financial and non-financial
corporations and the household sector can be distinguished from the non-profit sector.
National accounts data also include industry accounts that divide activity according to the
International Standard Industrial
Classification, Rev. 4 (SIC).
A set of accounting identities that hold in the aggregate as well as at the sector or industry
level serve as the backbone for the national accounts.
In these accounts, the value of final
production (i.e. production net of intermediate goods) is called gross value added (GVA). When
aggregated to the economy level, GVA equals GDP less net taxes on products. GVA is detailed
in the generation of income account and equals the sum of income paid to capital, labor, and
taxes:
GVA = Gross Operating Surplus (GOS) + Compensation to Labor
+ Net Taxes on Production.
GOS captures the income available to corporations and other producing entities after paying for
labor services and after subtracting taxes (and adding subsidies) associated with production.
The distribution of income account splits GOS into gross saving, dividends, and other payments
to capital such as taxes on profits, interest payments, reinvested foreign earnings, and other
transfers:
GOS = Gross Saving (GS) + Net Dividends | {z } Accounting Profits
+ Taxes on Profits + Interest
− Reinvested Earnings on Foreign Direct Investment + Other Transfers.
Net dividends equal dividends paid less dividends received from subsidiaries or partially-owned
entities. Other transfers include social contributions and rental payments on land.
In our analyses, we define (accounting) profits as the sum of gross saving and net dividends.
The capital account connects the flow of saving to the flow of investment as follows:
GS = Net Lending + Gross Fixed Capital Formation + Changes in Inventories + Changes in Other
Non-Financial Produced Assets.
The net lending position is defined as the excess of gross saving over investment spending.
"Wealthy individuals and large corporations are able to capture and decide on their own what to
do with the surplus, with all the social ramifications associated with their decisions to invest
where and when they want-or not to invest, and thus to accumulate cash, repay debt, and repurchase
their own equity shares."
Or in the case of say Bill Gates in deciding which causes get assistance and which not rather
than people voting on it (not that I think Bill Gates is necessarily doing harm - but why should
he get to decide?).
"... things might have worked out with better luck on timing), you need your head examined to start a small business ..."
"... If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic. ..."
"... And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy. ..."
"... You're so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses! ..."
"... To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you're SOL! ..."
As someone who has started three businesses, two of them successful (I went to Australia right
before the Gulf War started, which led to new business in Sydney coming to a complete halt for
six months; things might have worked out with better luck on timing), you need your head examined
to start a small business. The most common characteristic of people running their own business
was that they'd been fired twice.
If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses
fail and running one is no picnic.
And new business formation has dived in the US, due mainly IMHO to less than robust demand
in many sectors of the economy.
Unless your family fully bankrolls you until BK kicks in (snark). I would have loved to write
as a career. Unfortunately, at the time, promises that had been made were broken and I had to
go to work for a F500 just to survive right after my undergraduate degree was completed. Fate
and Karma.
You're so right. It used to be that there were set asides for small businesses but nowadays
Federal and State Governments are only interested in contracts with large businesses. The SBA
classification for small business is based on NAICS code (used to be SIC code) is usually $1-2
million or up to 500 employees. I wonder how they can be small businesses!
To survive, small businesses need to sell their goods/services to large businesses. Most
of the decision makers who purchase these items are unreachable or already have their favorites.
Unless your small business has invented a better mousetrap you're SOL!
Gregor Jarosch (2015, Chicago, Stanford): Jarosch writes a model to explain why losing your
job leads to a very long-lasting decline in your lifetime wages. His hypothesis is that this is due
to people climbing a ladder of jobs that are increasingly secure, so that when one has the
misfortune of losing a job, this leads to a fall down the ladder and a higher likelihood of having
further spells of unemployment in the future. He uses administrative social security data to find
some evidence for this hypothesis.
"DeVos's decision to reverse some of her work "with no coherent explanation or substitute" effectively
means that the Trump administration is placing the welfare of loan contractors above those of student
debtors"
'Trump's education secretary wants to limit costs at a time when more than 1 million Americans
are annually defaulting'
by Shahien Nasiripour...April 11, 2017...2:46 PM EDT
"Education Secretary Betsy DeVos on Tuesday rolled back an Obama administration attempt to reform
how student loan servicers collect debt.
Obama issued a pair (PDF) of memorandums (PDF) last year requiring that the government's Federal
Student Aid office, which services $1.1 trillion in government-owned student loans, do more to help
borrowers manage, or even discharge, their debt. But in a memorandum (PDF) to the department's student
aid office, DeVos formally withdrew the Obama memos.
The previous administration's approach, DeVos said, was inconsistent and full of shortcomings.
She didn't detail how the moves fell short, and her spokesmen, Jim Bradshaw and Matthew Frendewey,
didn't respond to requests for comment.
DeVos's move comes a week after one of the student loan industry's main lobbies asked for Congress's
help in delaying or substantially changing the Education Department's loan servicing plans. In a
pair of April 4 letters to leaders of the House and Senate appropriations committees, the National
Council of Higher Education Resources said there were too many unanswered questions, including whether
the Obama administration's approach would be unnecessarily expensive.
A recent epidemic of student loan defaults and what authorities describe as systematic mistreatment
of borrowers prompted the Obama administration, in its waning days, to force the FSA office to emphasize
how debtors are treated, rather than maximize the amount of cash they can stump up to meet their
obligations.
Obama's team also sought to reduce the possibility that new contracts would be given to companies
that mislead or otherwise harm debtors. The current round of contracts will terminate in 2019, and
among three finalists for a new contract is Navient Corp. In January, state attorneys general in
Illinois and Washington, along with the U.S. Consumer Financial Protection Bureau, or CFPB, sued
Navient over allegations the company abused borrowers by taking shortcuts to boost its own bottom
line. Navient has denied the allegations.
The withdrawal of the Obama administration guidelines could make Navient a more likely contender
for that contract, government officials said. Navient shares moved higher after the government released
DeVos's decision around 11:30 a.m. New York time. Navient stock ended up almost 2 percent.
The Obama administration vision for how federal loans would be serviced almost certainly meant
the feds would have to increase how much they pay loan contractors to collect monthly payments from
borrowers and counsel them on repayment options. Already, the government annually spends around $800
million to collect on almost $1.1 trillion of debt. DeVos, however, made clear that her department
would focus on curbing costs.
"We must create a student loan servicing environment that provides the highest quality customer
service and increases accountability and transparency for all borrowers, while also limiting the
cost to taxpayers," DeVos said.
With her memo, DeVos has taken control of the complex and widely derided system in which the federal
government collects monthly payments from tens of millions of Americans with government-owned student
loans. The CFPB said in 2015 that the manner in which student loans are collected has been marred
by "widespread failures."
DeVos's move "will certainly increase the likelihood of default," said David Bergeron, a senior
fellow at the Center for American Progress, a Washington think tank with close ties to Democrats.
Bergeron worked under Democratic and Republican administrations over more than 30 years at the Education
Department. He retired as the head of postsecondary education.
During Obama's eight years in office, some 8.7 million Americans defaulted on their student loans,
for a rate of one default roughly every 29 seconds.
Former Deputy Treasury Secretary Sarah Bloom Raskin worked on student loan policy during the latter
years of the Obama administration, in part over concern that borrowers' struggles were affecting
the management of U.S. debt. DeVos's decision to reverse some of her work "with no coherent explanation
or substitute" effectively means that the Trump administration is placing the welfare of loan contractors
above those of student debtors, she said.
In a statement Tuesday, Illinois Attorney General Lisa Madigan, who is suing Navient, agreed:
"The Department of Education has decided it does not need to protect student loan borrowers." libezkova -> im1dc... ,
April 11, 2017 at 05:24 PM
"... Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style, some
did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time blip. ..."
"... In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned.
At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's KPMG and
EY helping. ..."
"... My personal favourite is Accenture / British Gas . But then you've also got the masterclass in cockups Raytheon / U.K. Border
Agency . Or for sheer breadth of failure, there's the IT Programme That Helped Kill a Whole Bank Stone Dead ( Infosys / Co-op ). ..."
"... I am an assembler expert. I have never seen a job advertised, but a I did not look very hard. Send me your work!!! IBM mainframe
assembler ..."
"... What about Computer Associates? For quite a while they proudly maintained the worst reputation amongst all of those consultancy/outsourcing
firms. ..."
"... My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this
was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language. ..."
"... The huge shortcoming of COBOL is that there are no equivalent of editing programs. ..."
"... Original programmers rarely wrote handbooks ..."
"... That is not to say that it is impossible to move off legacy platforms ..."
After we've been writing about the problem of the ticking time bomb of bank legacy systems written in COBOL that depends on a shrinking
pool of aging programmers to baby them for now nearly two years, Reuters reports on the issue. Chuck L flagged a Reuters story, Banks
scramble to fix old systems as IT 'cowboys' ride into sunset, which made some of the points we've been making but frustratingly missed
other key elements.
Here's what Reuters confirmed:
Banks and the Federal government are running mission-critical core systems on COBOL, and only a small number of older software
engineers have the expertise to keep the systems running . From the article:
In the United States, the financial sector, major corporations and parts of the federal government still largely rely on it
because it underpins powerful systems that were built in the 70s or 80s and never fully replaced
Experienced COBOL programmers can earn more than $100 an hour when they get called in to patch up glitches, rewrite coding
manuals or make new systems work with old.
For their customers such expenses pale in comparison with what it would cost to replace the old systems altogether, not to
mention the risks involved.
Here's what Reuters missed:
Why young coders are not learning COBOL . Why, in an era when IT grads find it hard to get entry-level jobs in the US, are young
programmers not learning COBOL as a guaranteed meal ticket? Basically, it's completely uncool and extremely tedious to work with
by modern standards. Given how narrowminded employers are, if you get good at COBOL, I woudl bet it's assumed you are only capable
of doing grunt coding and would never get into the circles to work on the fantasy of getting rich by developing a hip app.
I'm sure expert readers will flag other issues, but the huge shortcoming of COBOL is that there are no equivalent of editing programs.
Every line of code in a routine must be inspected and changed line by line.
How banks got in this mess in the first place. The original sin of software development is failure to document the code. In fairness,
the Reuters story does allude to the issue:
But COBOL veterans say it takes more than just knowing the language itself. COBOL-based systems vary widely and original programmers
rarely wrote handbooks, making trouble-shooting difficult for others.
What this does not make quite clear is that given the lack of documentation, it will always be cheaper and lower risk to have
someone who is familiar with the code baby it, best of all the guy who originally wrote it. And that means any time you bring someone
in, they are going to have to sort out not just the code that might be causing fits and starts, but the considerable interdependencies
that have developed over time. As the article notes:
"It is immensely complex," said [former chief executive of Barclays PLC Anthony] Jenkins, who now heads startup 10x Future
Technologies, which sells new IT infrastructure to banks. "Legacy systems from different generations are layered and often heavily
intertwined."
I had the derivatives trading firm O'Connor & Associates as a client in the early 1990s. It was widely recognized as being one
of the two best IT shops in all of Wall Street at the time. O'Connor was running the biggest private sector Unix network in the world
back then. And IT was seen as critical to the firm's success; half of O'Connor's expenses went to it.
Even with it being a huge expense, and the my client, the CIO, repeatedly telling his partners that documenting the code would
save 20% over the life of the software, his pleas fell on deaf ears. Even with the big commitment to building software, the trading
desk heads felt it was already taking too long to get their apps into production. Speed of deployment was more important to them
than cost or long-term considerations. 1 And if you saw this sort of behavior with a firm where software development was
a huge expense for partners who were spending their own money, it's not hard to see how managers in a firm where the developers were
much less important and management was fixated on short term earnings targets to blow off tradeoff like this entirely.
Picking up sales patter from vendors, Reuters is over-stating banks' ability to address this issue . Here is what Reuters would
have you believe:
The industry appears to be reaching an inflection point, though. In the United States, banks are slowly shifting toward newer
languages taking cue from overseas rivals who have already made the switch-over.
Commonwealth Bank of Australia, for instance, replaced its core banking platform in 2012 with the help of Accenture and software
company SAP SE. The job ultimately took five years and cost more than 1 billion Australian dollars ($749.9 million).
Accenture is also working with software vendor Temenos Group AG to help Swedish bank Nordea make a similar transition by 2020.
IBM is also setting itself up to profit from the changes, despite its defense of COBOL's relevance. It recently acquired EzSource,
a company that helps programmers figure out how old COBOL programs work.
The conundrum is the more new routines banks pile on top of legacy systems, the more difficult a transition becomes. So delay
only makes matters worse. Yet the incentives of everyone outside the IT areas is to hope they can ride it out and make the legacy
system time bomb their successor's problem.
If you read carefully, Commonwealth is the only success story so far. And it's vastly less complex than that of many US players.
First, it has roughly A$990 billion or $740 billion in assets now. While that makes it #46 in the world (and Nordea is of similar
size at #44 as of June 30, 2016), JP Morgan and Bank of America are three times larger. Second, and perhaps more important, they
are the product of more bank mergers. Commonwealth has acquired only four banks since the computer era. Third, many of the larger
banks are major capital markets players, meaning their transaction volume relative to their asset base and product complexit is also
vastly greater than for a Commonwealth. Finally, it is not impossible that as a government owned bank prior to 1990 that not being
profit driven, Commonwealth's software jockeys might have documented some of the COBOL, making a transition less fraught.
Add to that that the Commonwealth project was clearly a "big IT project". Anything over $500 million comfortably falls into that
category. The failure rate on big IT projects is over 50%; some experts estimate it at 80% (costly failures are disguised as well
as possible; some big IT projects going off the rails are terminated early).
Mind you, that is not to say that it is impossible to move off legacy platforms. The issue is the time and cost (as well as risk).
One reader, I believe Brooklyn Bridge, recounted a prototypical conversation with management in which it became clear that the cost
of a migration would be three times a behemoth bank's total profit for three years. That immediately shut down the manager's interest.
Estimates like that don't factor in the high odds of overruns. And even if it is too high for some banks by a factor of five,
that's still too big for most to stomach until they are forced to. So the question then becomes: can they whack off enough increments
of the problem to make it digestible from a cost and risk perspective? But the flip side is that the easier parts to isolate and
migrate are likely not to be the most urgent to address.
____ 1 The CIO had been the head index trader and had also help build O'Connor's FX derivatives trading business, so he was
well aware of the tradeoff between trading a new instrument sooner versus software life cycle costs. He was convinced his partners
were being short-sighted even over the near term and had some analyses to bolster that view. So this was the not empire-building
or special pleading. This was an effort at prudent management.
Accenture is also working with software vendor Temenos Group AG to help
and promptly splurted my coffee over my desk. "Help" is the last thing either of these two ne'redowells will be doing.
Apart from the problems ably explained in the above piece, I'm tempted to think industry PR and management gullibility to it
are the two biggest risks.
Heaps of IT upgrades have gone a bit wonky over here of late, Health care payroll, ATO, Centerlink, Census, all assisted by
private software vendors and consultants – after – drum roll .. PR management did a "efficiency" drive [by].
Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style,
some did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time
blip.
disheveled . nice self licking icecream cone thingy and its still all gov fault . two'fer
It's the same in the UK as Clive knows and can add.
In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned.
At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's
KPMG and EY helping.
What I have read / heard is that the external consultants often cost more and will take longer to do the work than internal
bidders. The banks and government(s) run an internal market and invite bids.
They keep writing books on how to avoid this sort of thing. Strangely enough, none of them ever tell CEOs or CIOs to pay people
decent wages, not treat them like crap and to train up new recruits now and again. And also fail to highlight that though you
might like to believe you can go into the streets in Mumbai, Manila or Shenzhen waving a dollar bill and have dozens of experienced,
skilled and loyal developers run to you like a cat smelling catnip, that may only be your wishful thinking.
Just wait 'til we get started trying to implement Brexit
Oh man, if you only had a look at the kind of graduates Infosys hires en masse and the state of graduate programmers coming
out of universities here in India you'd be amazed how we still haven't had massive hacks. And now the government, so confident
in the Indian IT industry's ability to make big IT systems is pushing for the universal ID system(aadhar) to be made mandatory
for even booking flight tickets!
So would you recommend graduates do learn COBOL to get good jobs there in the USA?
I'd pick something really obscure, like maybe MUMPS
- yes, incredibly niche but that's the point, you can corner a market. You might not get oodles of work but what you do get
you can charge the earth for. Getting real-world experience is tricky though.
Another alternative, a little more mainstream is assembler. But that is hideous. You deserve every penny if you can learn that
and be productive in it.
For a bit more on why Cobol is hard to use see Why We Hate Cobol
. To summarise, Cobol is barely removed from programming in assembler, i.e. at the lowest level of abstraction, with endless
details needing to be taken care of. It dates pack to the punched card era.
It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with, due
to the lack of features that are usually taken for granted. Those who try to are probably on their own due to a shortage of teachers/courses.
It's a language that's best mastered on the job as a junior in a company that still uses it, so it's hard to get it on your CV
before landing such a job.
There are potentially two types of career opportunities for those who invest the time to get up-to-speed on Cobol. The first
is maintenance and minor extension of legacy Cobol applications. The second and potentially more lucrative one is developing an
ability to understand exactly what a Cobol program does in order to craft a suitable replacement in a modern enterprise grade
language.
Well, COBOL's shortcomings are part technical and part "religious". After almost fifty years in software, and with experience
in many of the "modern enterprise grade languages", I would argue that the technical and business merits are poorly understood.
There is an enormous pressure in the industry to be on the "latest and greatest" language/platform/framework, etc. And under such
pressure to sell novelty, the strengths of older technologies are generally overlooked.
@Yves, I would be glad to share my viewpoint (biases, warts and all) at your convenience. I live nearby.
"It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with"
which tells you something about the quality of IT education these days, where "mastering" a language is more often more important
than actually understanding what goes on and how.
My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and
this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.
IMHO, your old boss is wrong about that. Precisely because OO languages are a huge paradigm change and require a programmer
to nearly abandon everything he/she knows about programming. Then get his brain around OOP patterns when designing a complex system.
Not so easy.
As proof, I put forth the 30% success rate for new large projects in the latter 90s done with OOP tech. Like they say, if it
was easy, everyone would be doing it.
More generally, on the subject of Cobol vs Java or C++/C#, in the heyday of OOPs rollout in the early 90s, corporate IT spent
record amounts on developing new systems. As news of the Y2K problem spread, they very badly wanted to replace old Cobol/mainframe
legacy systems. As things went along, many of those plans got rolled back due to perceived problems with viability, cost and trained
personnel.
Part of the reason was existing Cobol IT staff took a look at OOP, then at their huge pile of Cobol legacy code and their brains
melted down. I was around lots of them and they had all the symptoms of Snow Crash. [Neil Stephenson] I hope they got better.
It never occurred to me that the OOP-lite character of the newer "hipster" languages (Golang / Go or even plain old javascript)
are a response to OOP run amok.
In the university course I took, we were taught Algol-60. Then it turned out that the univ. had no budget for Algol compiles
for us. So we wrote our programs in Algol-60 for 'publication' and grading, and rewrote them in FORTRAN IV to run in a cheap bulk
FORTRAN execution system for results. Splendid way to push home Turing's point that all computing is the same. So when the job
needed COBOL, "Sure, bring it on."
My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this
was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.
Yes. Learning a new programming language is fairly easy but understanding existing patchwork code can be very hard indeed.
It just gets harder if you want to make reliable changes.
HR thinking, however, demands "credentials" and languages get chosen as such based on their simple labels. They are searchable
on L**kedIn!
A related limitation is the corporate aversion to spending any time or money on employee learning of either language or code.
There may not be anyone out there with all the skills needed but that will not stop managers from trying to hire them or, better
still, just outsourcing the whole mess.
Your boss was correct in my opinion - but also atypical. Most firms look for multi-years of experience in a language. They'll
toss your resume if you don't show you've used it extensively.
Even if a new coder spent the time to learn COBOL, if he wasn't using it on the job or in pretty significant projects he would
not be considered. And there aren't exactly many open source projects out there written in COBOL to prove one's competence. The
limiting factor is not whether you "know" COBOL, or whether you know how to learn it. The limiting factor is the actual knowledge
of the system, how it was implemented, and all the little details that never get written down no matter how good your documentation.
If your system is 30+ years old it has complexity hidden in every nook and cranny.
As for the language itself, COBOL is an ancient language from a much older paradigm than what students learn in school today.
Most students skip right past C, they don't learn structural programming. They expect to have extensive libraries of pre-written
routines available for reuse. And they expect to work in a modern IDE (development environment), a software package that makes
it much easier to write and debug code. COBOL doesn't have tools of this level.
When I was in the Air Force I was trained as a programmer. COBOL was one of the languages they "taught". I never used it, ever,
and wouldn't dream of trying it today. It's simply too niche. I would never recommend anyone learn COBOL in the hopes of getting
a job. Get the job first, and if it happens to include some COBOL get the expertise that way.
having seen the 'high level code' in C++, not sure what makes it 'modern'.its really an out growth of C, which is basically
the assembler language of Unix. which it self is no spring chicken. mostly what is called 'modern' is just the latest fad, has
the highest push from vendors. and sadly what we see in IT, is that the IT trade magazines are more into what they sell, that
what companies need (maybe because of advertising?)
as to why schools tend to teach these languages than others? mainly cause its hip. its also cheaper for the schools, as they
dont have much in the way of infrastructure to teach them ( kids bring their own computers). course teachers are as likely to
be influenced by the latest 'shinny;' thing as any one else
C++ shares most of the core C spec but that's it. [variables and scope, datatypes, functions sorta, math and logic operatives,
logic control statements] The reason you can read high level C++ is because it uses objects that hide the internal code and are
given names that describe their use which if done right makes the code somewhat readable, along with a short comment header, and
self documenting.
Then at high level most code is procedural and/or event driven, which makes it appear to function like C or any other procedural
language. Without the Goto statements and subroutines, because that functionality is now encapsulated within the C++ objects.
{which are a datatype that combines data structures and related functions that act on this data)
Well put. I was going to make this point. Note that the today's IT grads struggle with Cobol for the same reason that modern
airline pilots would struggle to build their own airplane. The industry has evolved and become much more specialized, and standard
'solved' problems have migrated into the core toolsets and become invisible to developers, who now work at a much higher level
of abstraction. So for example a programmer who learned using BASIC on a Commodore 64 probably knows all about graphics coding
by direct addressing of screen memory, which modern programmers would consider unnecessary at best and dangerous at worst. Not
to mention it's exhausting drudgery compared to working with modern toolsets.
The other reason more grads don't learn COBOL is because it's a sunset technology. This is true even if systems written in
COBOL are mission critical and not being replaced. As more and more COBOL programmers retire or die, banks will eventually reach
the point where they don't have enough skilled staff available to keep their existing systems running. If they are in a position
where they have to fix things anyway, for example due to a critical failure, they will be forced to resort to cross-training other
developers, at great expense and pain for all concerned, and with no guarantee of success. One or two of these experiences will
be enough to convince them that migration is necessary, whatever the cost (if their business survives them, which isn't a given
when it comes to critical failures involving out of date and poorly-understood technology). And while developers with COBOL skills
will be able to name their own price during those events, it's not likely to be a sustainable working environment in the longer
term.
It would take a significant critical mass of younger programmers deciding to learn COBOL to change this dynamic. One person
on their own isn't going to make any difference, and it's not career advice I would ever give to a young graduate looking to enter
IT.
I am an experienced developer who has worked with a lot of different languages, including some quite low level ones in my early
days. I don't know COBOL, but I am confident that I could learn it well enough to perform code archaeology on it given enough
time (although probably nowhere near as efficiently as someone who built a career on it). Whether I could be convinced to do so
is another question. If you paid me never-need-to-work-again money, then maybe. But nobody is ever going to do that unless it's
a crisis, and I'm not likely to sign up for a death march situation with my current family commitments.
"Experienced COBOL programmers can earn more than $100 an hour"
Then the people hiring are getting them dirt cheap. This is a lot closer to consulting than contracting–a very specialized
skill set and only a small set of people available. The rate should be $200-300/hour.
I wonder if it has something to do with the IRS rules that made that guy fly a plane into an IRS office? Because of the rules,
programmers aren't allowed to work as independent consultants. Since their employer/middleman takes a huge cut the pay they receive
is a lot lower. Coders with a security clearance make quite a bit but that requires an "in", getting the clearance in the first
place which most employers won't pay for.
you're right. I've seen it on cluckny databases in a clothing firm in NY State, a seed and grain distribution facility in Minnesota
and a bank in Minneapolis. They're horrible and Yves is right – documentation is completely ABSENT
No different than the failure of the public sector to maintain dams, bridges and highways. Basic civil engineering but our
business model never included maintenance nor replacement costs. That is because our business model is accounting fraud.
I grew up on Fortran, and Cobol isn't too different, just limited to 2 points past the decimal to the right. I feel so sorry
for these code jockies who can't handle a bit of drudgery, who can't do squat without a gigabyte routine library to invoke. Those
languages as scripting languages or report writers back in the old days.
Please hire another million Indian programmers they don't mind being poorly paid or the drudgery. Americans and Europeans are
so over-rated. Business always complains they can't hire the right people some job requires 2 PhDs and we can't pay more than
$30k, am I right? Business needs slaves, not employees.
This was a "new payroll" system for school teachers in NZ. It was an ongoing disaster. If something as simple (?) as paying
NZ teachers could turn into such a train-wreck, imagine what updating the software of the crooked banks could entail. I bet that
there are secret frauds hidden in the ancient software, like the rat mummies and cat skeletons that one finds when lifting the
floor of old houses.
"Novopay is a web-based payroll system for state and state integrated schools in New Zealand, processing the pay of 110,000
teaching and support staff at 2,457 schools .. From the outset, the system led to widespread problems with over 8,000 teachers
receiving the wrong pay and in some cases no pay at all; within a few months, 90% of schools were affected .."
"Many of the errors were described as 'bizarre'. One teacher was paid for 39 days, instead of 39 hours getting thousands of
dollars more than he should have. Another teacher was overpaid by $39,000. She returned the money immediately, but two months
later, had not been paid since. A relief teacher was paid for working at two different schools on the same day – one in Upper
Hutt and the other in Auckland. Ashburton College principal, Grant McMillan, said the 'most ludicrous' problem was when "Novopay
took $40,000 directly out of the school bank account to pay a number of teachers who had never worked at the college".
"but the huge shortcoming of COBOL is that there are no equivalent of editing programs. Every line of code in a routine must
be inspected and changed line by line"
I'm not sure what you mean by this.
If you mean that COBOL doesn't have the new flash IDEs that can do smart things with "syntactic sugar", then it really depends
on the demand. Smart IDEs can be written for pretty much any languages (smart IDEs work by operating on ASTs, which are part and
parcel of any compiler. The problem is more of what to do if you have an externalised functions etc, which is for example why
it took so long for those smart IDEs to work with C++ and its linking model). The question is whether it pays – and a lot of old
COBOL hands eschew anything except for vi (or equivalent) because coding should be done by REAL MEN.
On the general IT problem. There are three problems, which are sort of related but not.
The first problem is the interconnectedness of the systems. Especially for a large bank, it's not often clear where one system
ends and the other begins, what are the side-effects of running something (or not running), who exactly produces what outputs
and when etc. The complexity is more often at this level than cobol (or any other) line-by-line code.
The second problem is the IT personell you get. If you're unlucky, you get coding monkeys, who barely understand _any_ programming
language (there was time I didn't think people like that get hired. I now know better), and have no idea what analytical and algorithmic
thinking is. If you're lucky, you get a bunch of IT geeks, who can discuss the latest technology till cows come home, know the
intricate details of what a sequence point in C++ is and how it affects execution, but don't really care that much about the business.
Then you get some possibly even brilliant code, but often also get unnecessary technological artifacts and new technologies just
because they are fun – even though a much simpler solution would work just as well if not better. TBH, you can get this from the
other side too, someone who understands the business but doesn't know even basic language techniques, which generally means their
code works very well for the business, but is a nightmare to maintain (a typical population of this groups are front office quants).
If you are incredibily lucky, you get someone who understands the business and happens to know how to code well too. Unfortunately,
this is almost a mythical beast, especially since neitehr IT nor the business encourage people to understand each other.
Which is what gets me to the thirds point – politics of it. And that's, TBH, is why most projects fail. Because it's easier
to staff a project with 100 developers and then say all that could have been done was done, than get 10 smart people working on
it, but risk that if it fails you get told you haven't spent enough resources. "We are not spending enough money" is paradoxically
one of the "problems" I often see here, when the problem really is "we're not spending money smartly enough". Because in an organization
budget=power. I have yet to see an IT project that would have 100+ developers that would _really_ succeed (as opposed to succeed
by redefining what it was to deliver to what was actually delivered).
Oh, and last point, on the documentation. TBH, documentation of the code is superfluous if a) it's clear what business problem
is being solved b) has a good set of test cases c) the code is reasonably cleanly written (which tends to be the real problem).
Documenting code by anything else but example is in my experience just a costly exercise. Mind you, this is entirely different
from documenting how systems hang together and how their interfaces work.
On the last point, I have to tell you I in short succession happened to work not just with O'Connor, but about a year later,
with Bankers Trust, then regarded as the other top IT shop on Wall Street. Both CIOs would disagree with you vehemently on your
claim re documentation.
Yes, in 90s there was a great deal of emphasis on code documentation. The problem with that is that the requirements in real
world change really quick. Development techniques that worked for sending the man to the moon don't really work well on short-cycle
user driven developments.
90s was mostly the good old waterfall method (which was really based on the NASA techniques), but even as early as 2000s it
started to change a lot. Part of it come from the realization that the "building" metaphor that was the working approach for a
lot of that didn't really work for code.
When you're building a bridge, it's expensive, so you have to spend a lot of time with blueprints etc. When you're doing code,
documenting it in "normal" human world just adds a superfluous step. It's much more efficient to make sure your code is clean
and readable than writing extra documents that tell you what the code does _and_ have to be kept in sync all the time.
Moreover, bits like pretty pictures showing the code interaction, dependencies and sometimes even more can now be generated
automatically from the code, so again, it's more efficient to do that than to keep two different versions of what should be the
same truth.
With all due respect, O'Connor and Bankers Trust were recognized at top IT shops then PRECISELY because they were the best,
bar none, at "short cycle user driven developments." They were both cutting edge in derivatives because you had to knock out the
coding to put new complex derivatives into production.
Don't insinuate my clients didn't know what they were talking about. They were running more difficult coding environments than
you've ever dealt with even now. The pace of derivative innovation was torrid then and there hasn't been anything like it since
in finance. Ten O'Connor partners made $1 billion on the sale of their firm, and it was entirely based on the IT capabilities.
That was an unheard of number back then, 1993, particularly given the scale of the firm (one office in Chicago, about 250 employees).
I can't talk about how good/bad your clients were except for generic statements – and the above were generic statements that
in 90s MOST companies used waterfall.
At the same time please do not talk about what programming environments I was in, because you don't know. That's assuming it's
even possible to compare coding environments – because quant libraries that first and foremost concentrate on processing data
(and I don't even know it's what was the majority of your clients code) is a very very different beast from extremely UI complex
but computationally trivial project, or something that has both trivial UI and computation but is very database heavy etc. etc.
I don't know what specific techniques your clients used. But the fact they WANTED to have more documentation doesn't mean that
having more documentation would ACTUALLY be useful.
With all due respect, I've spent the first half of 00s talking to some of the top IT development methodologists of the time,
from the Gang Of Four people to Agile Manifesto chaps, and practicing/leading/implementing SW development methodology across a
number of different industries (anything from "pure" waterfall to variants of it to XP).
The general agreement across the industry was (and I believe still is) that documenting _THE CODE_ (outside of the code) was
waste of time (actually it was ranging from any design doc to various levels of design doc, depending on who you were talking
to).
Again, I put emphasis on the code – that is not the same as say having a good whitepaper telling you how the model you're implementing
works, or what the hell the users actually want – i.e. capturing the requirements.
As an aside – implementation of new derivative payoffs can be actually done in a fairly trivial way, depending on how exactly
you model them in the code. I've wrote an extensive library that did it, whose whole purpose was to deal with new products and
allow them to be incubated quickly and effectively – and that most likely involved doing things that no-one at BT/O'Conner even
looked at in early 1990s (because XVA wasn't even gleam in anyone's eye at that time).
Well at my TBTF, where incomprehensible chaos rules, the only thing - and I do mean the only thing - that keeps major disasters
averted (perhaps "ameliorated" is putting it better) is where some of the key systems are documented. Most of the core back end
is copiously and reasonably well documented and as such can survive a lot of mistreatment at the hands of the current outsourcer
de jour.
But some "lower priority" applications are either poorly documented or not documented at all. And a "low priority" application
is only "low priority" until it happens to sit on the critical path. Even now I have half of Bangalore (it seems so, at any rate)
sitting there trying to reverse engineer some sparsely documented application - although I suspect there was documentation, it
just got "lost" in a succession of handovers - desperate in their attempts to figure out what the application does and how it
does it. You can hear the fear in their voices, it is scary stuff, given how crappy-little-VB6-pile-of-rubbish is now the only
way to manage a key business process where there are no useable comments in the code and no other application documentation, you
are totally, totally screwed.
It seems like you guys are talking past each other to some degree. I get the sense that vlade is talking about commenting code,
and dismissing the idea of code comments that don't live with the code. Yves' former colleagues are probably referring to higher
level specifications that describe the functionality, requirements, inputs, and outputs of the various software modules in the
system.
If this is the case, then you're both right. Even comments in the code can tend to get out of date due to application of bug fixes,
and other reasons for 'drift' in the code, unless the comments are rigorously maintained along wth the code. Were the code-level
descriptions maintained somewhere else, that would be much more difficult and less useful. On the other hand the higher-level
specifications are pretty essential for using, testing, and maintaining the software, and would sure be useful for someone trying
to replace all or parts of the system.
In my experience you need a combination of both. There is simply no substitute for a brief line in some ghastly nested if/then
procedure that says "this section catches host offline exceptions if the transaction times out and calls the last incremental
earmarked funds as a fallback" or what-have-you.
That sort of thing can save weeks of analysis. It can stop an outage from escalating from a few minutes to hours or
even days.
There is some problem-solving/catastrophe-avoiding discussion about setting up a new bank with a clean, updated (i.e., this
millennium) IT approach and then merging the old bank into that and decommissioning that old one. Many questions arise about applicable
software both in-house and at all those vendor shops that would need some inter-connectivity.
Legacy systems lurk all over the economy, from banks to utilities to government and education. The O'Connor CIO advice relating
to life-cycle costing was probably unheard in many places besides
The Street.
building them from scratch is usually the most likely to be a failure as to many in both IT and business only know parts of
the needs. and if a company cant implement a vendor supplied package to do the work, what makes us think they can do it from scratch
I did learn COBOL when I was at the University more than three decades ago, and at that time it was already decidedly "uncool".
The course, given by an old-timer, was great though. I programmed in COBOL in the beginnings of my professional life (MIS applications,
not banking), so I can provide a slightly different take on some of those issues.
As far as the language itself is concerned, disregard those comments about it being like "assembly". COBOL already showed its
age in the 1980s, but though superannuated it is a high-level language geared at dealing with database records, money amounts
(calculations with controlled accuracy), and reports. For that kind of job, it was not that bad.
The huge shortcoming of COBOL is that there are no equivalent of editing programs.
While in the old times a simple text editor was the main tool for programming in that language, modern integrated, interactive
development environments for COBOL have been available for quite a while - just as there are for Java, C++ or C#.
And that is a bit of an issue. For, already in my times, a lot, possibly most COBOL was not programmed manually, but generated
automatically - typically from pseudo-COBOL annotations or functional extensions inside the code. Want to access a database (say
Oracle, DB2, Ingres) from COBOL, or generate a user interface (for 3270 or VT220 terminals in those days), or perform some networking?
There were extensions and code generators for that. Nowadays you will also find coding utilities to manipulate XML or interface
with routines in other programming languages. All introduce deviations and extensions from the COBOL norm.
If, tomorrow, I wanted to apply for a job at one of those financial institutions battling with legacy software, my rusty COBOL
programming skills would not be the main problem, but my lack of knowledge of the entire development environment. That
would mean knowing those additional code generators, development environments, extra COBOL-geared database/UI/networking/reporting
modules. In an IBM mainframe environment, this would probably mean knowing things like REXX, IMS or DB2, CICS, etc (my background
is DEC VMS and related software, not IBM stuff).
So those firms are not holding dear onto just COBOL programmers - they are desperately hoarding people who know their way around
in mainframe programming environments for which training (in Universities) basically stopped in the early 1990s.
Furthermore, I suspect that some of those code generators/interfaces might themselves be decaying legacy systems whose original
developers went out of business or have been slowly withdrawing from their maintenance. Correcting or adjusting manually the COBOL
code generated by such tools in the absence of vendor support is lots of fun (I had to do something like that once, but it actually
went smoothly).
Original programmers rarely wrote handbooks
My experience is that proper documentation has a good chance to be rigorously enforced when the software being developed is
itself a commercial product to be delivered to outside parties. Then, handbooks, reference manuals and even code documentation
become actual deliverables that are part of the product sold, and whose production is planned and budgeted for in software development
programmes.
I presume it is difficult to ensure that effort and resources be devoted to document internal software because these are purely
cost centers - not profit centers (or at least, do not appear as such directly).
That is not to say that it is impossible to move off legacy platforms
So, we knew that banks were too big to fail, too big to jail, and are still too big to bail. Are their software problems too
big to nail?
actually suspect banks like the rest of business dont really care about their systems, till they are down, as they will find
the latest offshore company to do it cheaper.
Why then have I been told that reviewing code for Y2K had to be done line by line?
I said documentation, not handbooks. And you are assuming banks hired third parties to do their development. Buying software
packages and customizing them, as well as greater use of third party vendors, became a common practice only as of the 1990s.
I know it will screw me and people I care about, and "throw the world economy into chaos," but who effing cares (hint: not
me) if the code pile reaches past the limits of its angle of repose, and slumps into some chaotic non-form?
Maybe a sentiment that gets me some abuse, but hey, is it not the gravamen of the story here that dysfunction and then collapse
are very possible, maybe even likely?
And where are the tools to re-build this Tower of Babel, symbol of arrogant pride? Maybe G_D has once again, per the Biblical
story, confounded the tongues of men (and women) to collapse their edifices and reduce them to working the dirt (what's left of
it after centuries of agricultural looting and the current motions toward temperature-driven uninhabitability.)
My first job out of uni, I was trained as a MVS/COBOL programmer. After successfully completing the 11-week pass/fire course,
I showed up to my 1st work assignment where my boss said to me, "Here's your UNIX terminal."
;-) – COBOL didn't strike me as difficult, just arcane and verbose. Converting to SAP is a costly nightmare. That caused to
me to leave a job once had no desire to deal with SAP/ABAP. I'm surprised no one has come up with an acceptable next-gen thing
. I remember years ago seeing an ad for
Object-Oriented-COBOL in
an IT magazine and I almost pissed myself laughing. On the serious side, if it's still that powerful and well represented in Banking,
perhaps someone should look into an upgraded version of the language/concepts and build something easy to lift and shift COBOL++?
This sounds like an opportunity for a worker's coop, to train their workers in COBOL and to get back at these banks by REALLY
exploiting them good and hard.
so is this why no one is willing to advocate regulating derivatives in an accountable way? i almost can't believe this stuff.
i can't believe that we are functioning at all, financially. 80% of IT projects fail? and if legacy platforms are replaced at
great time and expense, years and trillions, what guarantee is there that the new platform will not spin out just as incomprehensibly
as COBOL based software evolved, with simplistic patches of other software lost in translation? And maybe many times faster. Did
Tuttle do this? I think we need new sophisticated hardware, something even Tuttle can't mess with.
I think it is only 80% of 'large' IT projects fail. I think it says more about the lack of scalability of large software projects,
or our (in-) ability to deal with exponential complexity growth
Looks like there are more than a few current NYC jobs at Accenture, Morgan Stanley, JPMorgan Chase, and Bank of America for
programmers who code in COBOL.
"Sure, it's lovely that unemployment in Seattle dips under
3%. But an attempt to tie that drop in the unemployment rate
to the minimum wage isn't going to work. For we can as easily
note that the unemployment rate has dropped everywhere in the
US over this same time period and the minimum wage hasn't
risen everywhere over that time period. We've not even got a
consistent correlation between minimum wages and unemployment
that is.mWhat we've actually got to do is try to work out
some method of what would have happened in Seattle from all
of the effects of everything else other than the minimum
wage, then compare it to what did happen with the minimum
wage. The difference between these two will be the effect of
the minimum wage rise. Seattle City Council know this, which
is why they asked the University of Washington to run exactly
such a study."
Why Fiscal Progressivity Discussions Are So Muddled
Posted by Matt Bruenig on March 26, 2015
Yesterday I wrote about the mistaken way that I think some commentators discuss cross-country
tax progressivity. Based on OECD tables and the work of Monica Prasad, the conventional wisdom
is that low-inequality countries use extremely progressive transfers rather than progressive
taxes to get that way. But when you look at transfer levels in these countries broken down
by income decile, you often see something like this:
[chart]
That sure doesn't seem like progressive transfer spending, does it? So how can the conventional
wisdom be right if the graph looks like that? Why does this graph seem on first glance to so
challenge the conventional wisdom? The answer lies deep in the methodological weeds. Explaining
it helps to reveal why I find these discussions to be so muddled and why I think the conveying
of the conventional wisdom tends to be broadly unhelpful to normal (and often even very sophisticated)
audiences.
...
Treatments of this topic that fail to convey this (and I think many of them do, often because
even the writer doesn't understand what's going on) darken more than they illuminate. Really,
the "progressivity" discussions in general do that, making the topic far more complicated and
muddled than it needs to be.
Which is especially sad because the Nordic model of inequality reduction is pretty simple:
use broad-based transfers to increase everyone's gross income and balance that fiscally by
levying taxes that increase with income.
Some of what he writes makes
a little sense but this is really dumb:
"The bigger problem with the regressivity objection,
in my view, is that dividing taxes paid by income seems to obscure the more important point.
What really matters in all of this is how many dollars you are scraping from poor, middle class,
and rich people."
Not considering the level of income - just how much a person pays in taxes? Heck - that
makes the head tax OK. Dumbest metric for the fairness of the tax system ever.
"Which
is especially sad because the Nordic model of inequality reduction is pretty simple: use broad-based
transfers to increase everyone's gross income and balance that fiscally by levying taxes that
increase with income."
This is from Jamie Dimon's letter to stockholders:
"If the work participation rate for this group [men ages
25-54] went back to just 93% – the current average for the
other developed nations – approximately 10 million more
people would be working in the United States. Some other
highly disturbing facts include: Fifty-seven percent of these
non-working males are on disability"
I don't know where he got the statistic from, but if it is
true it is potent evidence that the main factor behind the 60
year long decline in prime age labor force participation by
men is an increase in those on disability, probably due to
both the expansion of the program, and better longevity and
diagnostics -- and probably also tied in to opiate addiction
as well.
So does Jamie sitting on his mountain of other people's money
have some magic solution that will get this EPOP back to 93%?
I guess if we all bank at JPMorganChase, all will be fine?
C'mon Jamie.
There has been a bit of a discussion on this - most of which
I sort of found unconvincing. Sorry but I am not the expert
on this one. And I doubt Jamie Dimon is not either.
"This is another common explanation for the drop in male
participation. But again it doesn't explain more than a
fraction of the phenomenon.
There's not much doubt that Social Security Disability
Insurance takes people out of the workforce, often by
inelegant design. In order to qualify for disability
payments, people typically have to prove that they cannot
work full-time. SSDI critics say this policy sidelines many
people who might otherwise be able to contribute to the
economy.
But how many people does SSDI really remove? From 1967 to
2014, the share of prime-age men getting disability insurance
rose from 1 percent to 3 percent. There is little chance that
this increase is entirely the result of several million
fraudulent attempts to get money without working. But even if
it were, SSDI would still only explain about one-quarter of
the decline in the male participation rate over that time.
There are many good reasons to reform disability insurance.
But it's not the singular driving force behind the decline of
working men."
"... As with any major reform movement, the corporate backlash was predictable. In Neo-classical Economics, Gaffney reveals that this backlash took two main forms. The first was the Red Scare (1919-1989), overseen by J Edgar Hoover as Assistant Attorney General and later as FBI director. ..."
"... The second was more insidious and involved the deliberate reframing of the classical economic theory developed by Adam Smith, Locke, Hume, and Ricardo as so-called neoclassical economics. ..."
Why do American children study Karl Marx, the villain we love to hate, in school? Yet Henry George,
whose views on land and tax reform gave rise to the Progressive and Populist movements of the
1900s, is totally absent from US history books.
During the 1890s George, author of the 1879 bestseller Progress and Poverty, was the third
most famous American, after Mark Twain and Thomas Edison. In 1896 he outpolled Teddy Roosevelt
and was nearly elected mayor of New York.
In Neo-classical Economics as a Stratagem Against Henry George (2007), University of California
economist Mason Gaffney argues that George and his Land Value Tax pose a far greater threat than
Marx to America's corporate elite.
America's enormous concentration of wealth has always depended on the inherent right of the
wealthy elite to seize and monopolize vast quantities of land and natural resources (oil, gas,
forests, water, minerals, etc) for personal profit.
Adopting an LVT, which is far easier than launching a violent revolution, would essentially
negate that right. What's more, every jurisdiction that has ever implemented an LVT finds it works
exactly the way George predicted it would. Productivity, prosperity, and social wellbeing flourish,
while inflation, wealth inequality, and boom and bust recessions and depressions virtually vanish.
When Progress and Poverty first came out in 1879, it started a worldwide reform movement that
in the US manifested in the fiercely anti-corporate Populist Movement in the 1880s and later the
Progressive Movement (1900-1920). Many important anti-corporate reforms came out of this period,
including the Sherman Antitrust Act (1890), a constitutional amendment allowing Americans to elect
the Senate by popular vote (prior to 1913 the Senate was appointed by state legislators), and
the country's first state-owned bank, The Bank of North Dakota (1919).
The Corporate Elite Strikes Back
As with any major reform movement, the corporate backlash was predictable. In Neo-classical
Economics, Gaffney reveals that this backlash took two main forms. The first was the Red Scare
(1919-1989), overseen by J Edgar Hoover as Assistant Attorney General and later as FBI director.
The second was more insidious and involved the deliberate reframing of the classical economic
theory developed by Adam Smith, Locke, Hume, and Ricardo as so-called neoclassical economics.
The latter totally negates Adam Smith's basic differentiation between "land", a limited, non-producible
resource. and "capital", a reproducible result of past human production. Smith, Locke, Hume, and
Ricardo all held that individuals have no right to seize and monopolize scarce natural resources,
such as land, minerals, water, and forests. They believed that because these resources are both
limited and essential for human survival, they should belong to the public.
Neoclassical economics, which first developed in the 1890s, was based on the premise that growth
and development can only occur if a handful of rent-seekers are allowed to monopolize scarce land
and natural resources for their personal profit. Henry George, who publicly debated the early
pioneers of neoclassical economics, claimed the science of economics was being deliberately distorted
to discredit him. Gaffney agrees. Because George's proposal to replace income and sales tax with
single land value taxed is based on logical concepts of land, capital, labor, and rent advanced
by Adam Smith, Locke, Hume, and Ricardo, they all had to be discredited.
Gaffney believes neoclassical economic theory undermines George's arguments for a single Land
Value Tax in two basic ways: 1) by claiming that land is no different from other capital (ironically
Marx made the identical argument) and 2) by portraying the science of economics as a series of
hard choices and sacrifices that low and middle income people must make. Some examples:
If we want efficiency, we must sacrifice equity.
To attract business, we must lower taxes and shut libraries and defund schools.
To prevent inflation, we must keep a large number of Americans unemployed.
To create jobs, we must destroy the environment and pollute the air, water, and food chain.
To raise productivity, we must fire people.
Gaffney's book traces the phenomenal public support Georgism enjoyed before the tenets of neoclassical
economics took hold in American universities. In addition to inspiring the Populist and Progressive
movements, an LVT to fund irrigation projects in California's Central Valley made California the
top producing farm state. In 1916 the first federal income tax law was introduced by Georgist
members of Congress (Henry George Jr and Warren Bailey) and included virtually no tax on wages.
In 1934 Georgist Upton Sinclair was almost elected governor of California.
Gaffney also identifies the robber barons whose fortunes financed the economics departments of
the major universities who went on to substitute neooclassical economics for classical economic
theory. At the top of this list were
Ezra Cornell (owner of both Western Union and Associated Press) – founder of Cornell University
John D Rockefeller – helped fund the University of Chicago and installed his cronies in its
economics department.
J. P Morgan – investment banker and early funder of Columbia University
B&O Railroad – John Hopkins University
Southern Pacific Railroad – Stanford University
The final section of Gaffney's book lays out the tragic economic, political, and social consequences
of allowing the Red Scare and neoclassical economics to stifle America's movement for a single
Land Value Tax:
Economic Consequences
The corporate elite has privatized, or is privatizing, most of the public domain (including
fisheries, the public airwaves, water, offshore oil and gas, and the right to clean air) without
compensation to the public.
The rate of saving and capital formation continues to fall rapidly. This is the main reason
there is no recovery.
Although profits soar, corporations have no incentive to invest in expansion and jobs. Instead
they invest their profits in real estate, derivatives, and commodities speculation.
American capital is decayed and obsolete. The US has lost much of its steel and auto industries.
Power plants and oil refineries are ancient and polluting. Most public capital (infrastructure)
is old and crumbling.
The number of American farms has fallen from 6 million in 1920 to 1 million in 2007.
The USA, once so self-sufficient, has grown dangerously dependent on importing raw materials
and foreign manufacturers.
The US financial system is a shambles, supported only by loading trillions of dollars of bad
debts onto the taxpayers.
Real wage rates have continued to fall since 1975,
Unemployment has risen to chronically high levels.
Inequality in wealth and income continues to increase rapidly.
Political Consequences
The corporate elite has nullified all the Progressive Era electoral reforms by pouring money
into politics and "deep lobbying," at all levels of government, including our institutions of
higher learning and our public schools.
The corporate elite continue to pour ever more of our tax money into prisons.
Social Consequences
Homelessness has risen to new heights, in spite of decades of subsidies to home-building and,
favorable tax treatment of owner-occupied homes
Hunger is rampant.
Street begging, once rare, is everywhere
Americans have experienced a sharp loss of community, honor, duty, loyalty and patriotism.
In the shadow world between crime and business there is now the vast, gray underground economy
that includes tax evasion, tax avoidance, and drug-dealing.
The US which once led the world in nearly every endeavor, has fallen far behind in infant survival,
in longevity, in literacy, in numeracy, in mental health.
American education no longer leads the world. Privatized education in the form of commercial
TV has largely superseded public education.
Donald Trump's election as president should have reminded liberals that Americans want more than
money from their work. They responded to Trump's promise of jobs more than to Hillary Clinton's promise
of government benefits because in addition to money, people also need dignity, a sense of self-reliance
and respect within their community. For centuries, jobs have provided all of those.
To say that work is disappearing would be an exaggeration. But despite the low unemployment rate,
fewer Americans have jobs than in years past:
[chart]
This new class of non-workers may be able to survive on the government dole, the charity of friends
and family or via black-market activities like drug sales. But they've probably lost some of the
dignity and respect that used to come with working for a living. Falling employment has been linked
to declining marriage rates, reduced happiness and opiate abuse. Some economists even blame disappearing
jobs for the recent rise in mortality rates afflicting white Americans.
What's more, the longer people stay out of the labor force, the more trouble they will have getting
back into it. They lose work ethic, skills and connections, and employers become suspicious of the
large gaps in the resumes. Economists Brad DeLong and Larry Summers have shown that this so-called
labor-market hysteresis can have potentially large, long-lasting negative effects on the economy.
When the economy is in recession, the best approach is probably a combination of fiscal and monetary
stimulus. But when the labor-force dropout problem is chronic, as it is now, a different kind of
policy may be needed -- a government-job guarantee.
The U.S. has used an approach like this before. In 1935, the administration of President Franklin
Roosevelt established the Works Progress Administration, which employed millions of American men,
mostly in public-works projects. WPA employees received hourly wages similar to other unskilled workers
in the surrounding area. Most of them built infrastructure and buildings, but a few were paid to
make art and write books. The total cost of the program was high -- $1.3 billion a year, or about
1.7 percent of U.S. gross domestic product. An equivalent expenditure now would be a little more
than $300 billion, or about half of federal defense spending. But the popularity of the program is
hard to deny, given Roosevelt's resounding victory in his reelection bid in 1936.
The idea of a new work program isn't a new one -- economists on all sides of the political spectrum
have been kicking it around for years now. It has received support from Stephanie Kelton, an adviser
to the Bernie Sanders presidential campaign, and from Kevin Hassett, who is reportedly Trump's pick
to lead the Council of Economic Advisers. Jeff Spross has an excellent article in Democracy exploring
the idea in depth.
William Darity of Duke University has been a particularly avid promoter of a job guarantee. He
describes it thus:
Any American 18 years or older would be able to find work through a federally funded public service
employment program -- a "National Investment Employment Corps." Each National Investment Employment
Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including
federal health insurance. The types of jobs offered could address the maintenance and construction
of the nation's physical and human infrastructure, from building roads, bridges, dams and schools,
to staffing high quality day care.
There is no shortage of work to be done. Even beyond the tasks Darity lists, the U.S. is full of
jobs that need doing, from elder care to renovation of old decaying buildings, to cleanup of lead
and other pollution, to construction and staffing of transit systems.
Darity estimates the cost of the program at $750 billion a year, Spross at $670 billion. That's
about equivalent to all of the U.S.'s current anti-poverty programs, and would be about twice the
size of the old WPA. So this would be a very big deal. But the true cost to society would be considerably
less, because the jobs would provide value. Better infrastructure, more child care and elder care,
and a cleaner, healthier environment would make the nation a richer, better place to live -- in other
words, those benefits should defray much of the program's cost. Also, the program would take people
off of the welfare rolls and cut government anti-poverty spending. Finally, even when the economy
isn't in a recession, more income will probably increase demand in the local economy.
All told, the program could end up being a bargain. And if the guarantee is limited to distressed,
low-employment areas, which could lower the costs down even more, and allow for pilot programs to
establish the viability of the concept.
Many people on the left and elsewhere don't like this idea. They doubt that government make-work
will provide dignity. And they believe strongly in the theory that automation will soon put large
numbers of people out of a job entirely. The only solution, they say, is to change U.S. culture and
values to make work less important, and to rely on programs like universal basic income. On the right,
some would inevitably see the plan as a first step on the road to socialism.
Maybe the critics will prove right in the long run. But for now, forcing a dramatic change on
American culture is a lot harder than simply giving people jobs. Robot-driven unemployment and new
social values are still mostly in the realm of science fiction, while the American public wants jobs
now. A job guarantee looks like a very good thing to try.
Peter K. said in reply
to Peter K....
Do both, the UBI and Job Guarantee.
Why doesn't Noah Smith discuss Fed Fail in detail and about how conservatives forced unprecedented
austerity on the economy.
This is not just "natural" or the evolution of technology, demographics and innovation.
"Despite the large increase in U.S. income inequality,
consumption for families at the 25th and 50th percentiles of
income has grown steadily over the time period 1960-2015. The
number of cars per household with below median income has
doubled since 1980 and the number of bedrooms per household
has grown 10 percent despite decreases in household size. The
finding of zero growth in American real wages since the 1970s
is driven in part by the choice of the CPI-U as the price
deflator; small biases in any price deflator compound over
long periods of time. Using a different deflator such as the
Personal Consumption Expenditures index (PCE) yields modest
growth in real wages and in median household incomes
throughout the time period. Accounting for the Hamilton
(1998) and Costa (2001) estimates of CPI bias yields
estimated wage growth of 1 percent per year during 1975-2015.
Meaningful growth in consumption for below median income
families has occurred even in a prolonged period of
increasing income inequality, increasing consumption
inequality and a decreasing share of national income accruing
to labor."
Yes progress was made from 1960 to 1975. But what after
that? To dismiss the rise in inequality by saying one can
reconfigure the CPI index is Heritage level nonsense.
David Glasner discusses how essential Professor Thoma's blog
is to the Econosphere... Funny given that the web
address for Uneasy Money refuses appear in Typepad.
A Tale
of Three Posts
by David Glasner
March 30, 2017
Since I started blogging in July 2011, I have published
521 posts (not including this one). A number of my posts have
achieved a fair amount of popularity, as measured by the
number of views, which WordPress allows me to keep track of.
Many, though not all, of my most widely viewed posts were
mentioned by Paul Krugman in his blog. Whenever I noticed an
unusually large uptick in the number of viewers visiting the
blog, I usually found Krugman had linked to my post, causing
a surge of viewers to my blog.
The most visitors I ever had in one day was on August 7,
2012. It was the day after I wrote a post mocking an op-ed in
the Wall Street Journal by Arthur Laffer ("Arthur Laffer,
Anti-Enlightenment Economist") in which, based on some
questionable data, and embarrassingly bad logic, Laffer
maintained that countries that had adopted fiscal stimulus
after the 2008-09 downturn had weaker recoveries than
countries that had practiced fiscal austerity. This was not
the first or last time that Krugman linked to a post of mine,
but what made it special was that Krugman linked to it while
he on vacation, so that for three days, everyone who visited
Krugman's blog found his post linking to my post, so that on
August 7 alone, my post was viewed 7885 times, with 3004
viewing the post on August 8, 1591 on August 9, and 953 on
August 10. In the entire month of August, the Laffer post was
viewed 15,399 times. To this day, that post remains the most
viewed post that I have ever written, having been viewed a
total 17,604 times.
As you can see, the post has not maintained its popular
appeal, over 87 percent of all views having occurred within
three and a half weeks of its having been published. And
there's no reason why it should have retained its popularity.
It was a well-written post, properly taking a moderately
well-known right-wing economist to task for publishing a
silly piece of ideological drivel in a once-great newspaper,
but there was nothing especially profound or original about
it. It was just the sort of post that Krugman loves to link
to, and I was at the top of his blog for three days before he
published his next post.
...
But over the past six months, suddenly since October, a
third post ("Gold Standard or Gold Exchange Standard: What's
the Difference?"), originally published on July 1, 2015, has
been attracting a lot of traffic. When first published, it
was moderately successful, drawing 569 visits on July 2,
2015, which is still the most visits it has received on any
single day, mostly via links from Mark Toma's blog and Brad
DeLong's blog. The post was not terribly original, but I
think it did a nice job of describing that evolution of the
gold standard from an almost accidental and peculiarly
British, institution into a totem of late nineteenth-century
international monetary orthodoxy, whose principal features
remain till this day surprisingly obscure even to well
trained and sophisticated monetary economists and financial
experts.
...
The other amazing thing about the burst of traffic to this
post is that most of the visitors seem to be coming from
India. Over the past 30 days since February 28, this blog has
been viewed 17,165 times. The most-often viewed post in that
time period was my gold-exchange standard post, which was
viewed 7385 times, i.e., over 40% of all views were of that
one single post. In the past 30 days, my blog was viewed from
India 6446 times while my blog was viewed from the United
States only 4863 times. Over the entire history of this blog,
about 50% of views have been from within the US. So India is
clearly where it's at now.
...
PS I realized that, by identifying Paul Krugman's blog as
the blog from which many of my most popular posts have
received the largest number of viewers, I inadvertently
slighted Mark Thoma's indispensible blog (Economistsview.typepad.com),
which really is the heart and soul of the econ blogosphere. I
just checked, and I see that since my blog started in 2011,
over 79,000 viewers have visited my blog via Mark's blog
compared to 53,000 viewers who have visited via Krugman. And
I daresay that when Krugman has linked to one of my posts,
it's probably only after he followed Thoma's link to my blog,
so I'm doubly indebted to Mark.
At the end they have a good discussion about NGDP
targetting.
I really don't understand why progressive economists don't
get behind this more. The more mainstream economists seem
more interested in promoting the Democrats' policy agenda and
defending it from the left and from the right.
Economists could/can help social movements push policies
like a higher minimum wage, UBI, guaranteed jobs,
unionization/economic democracy and an NGDP target for the
Fed.
Seems like Progressive [center-left] economists are more
interested in defending the Federal Reserve except for DeLong
who criticizes it in an indirect, oblique manner. They're in
a defensive crouch all of the time.
"The comments should never be confused with the posts and
posted links"
That's wrong ! There is a strong
interdependency.
Professor Thoma has the unique ability to pick up
interesting links. I wonder where he finds time to read all
those articles, as probably to post a dosen of links, as he
often does, you need to read at least twice more articles.
Probably much more the twice.
I think that this quality attracts a lot of people.
And I noticed that on average, his "Links" posts attract
more comments that regular posts. Probably by the factor of
two on average. Most Links posts attract over 100 comments
with high number around 300.
It might also be that commenting on "Links", commenters
often post their own findings and quotes, which sometimes is
of high, or very high value and add to the value. Anne is one
such persons.
Another interesting feature of this blog is that the
"core" group of commenters is reasonably stable with many
commenting for five years or more. I belong to "episodical"
commenters, but I follow the blog for a long time and after a
couple of years I start recognizing probably 80% of names and
even now has some vague information about their personal
histories.
And some of the members of the core group systematically
produce a number of high quality comments almost each day.
That also attracts people.
Discussions, when two commenters have opposite views of
the subject to me is the most interesting part. Despite
occasional shouting matches.
So it is the quality of links and posts attracts quality
commenters, which in turn, further enhance the quality of the
blog.
Absolutely! I was originally attracted to this blog by the
quality of the comments even more than the quality of Prof.
Thoma's selections.
It's ironic that paine seems to be
arguing that comments are relatively unimportant. His posts
are always thought-provoking and foster good discussions, and
one of the reasons I became a regular reader.
Ivy League alumni like the illuminatis Clinton and Bushes are prepared and vetted
to run Goldman Sachs, the White House and the justice system etc. A merry go
'round, this for that but at the end rather than creating personal foundations
they should be creating foundations for their alma mater instead of their library
mausoleum. Clinton foundation raised over $1.2 billion to be run by daughter.
Sick.
Flawed, sensationalistic report, clickbait for jealous masses who can't make the
cut into the ivy league.
Most of the $ comes from research grants. Wouldn't you
expect the best schools in the country to get research grants? Look at all the
top state schools, they also attract loads of federal $.
As for endowment income being non-taxable for universities, that's a good thing
IMO. Would you rather have the endowment funds for all other nonprofits taxed too?
Think about hospitals and churches as examples.
The Ivy League universities are also prolific H-1B abusers, and they use
tax-free "scholarship" endowment fund earnings to advance their liberal
causes.
Time to tax them properly and stop the scam of 'scholarships' and
H-1B abuse.
The US has 1,000 Generals. Count 'em. We have 33 brigade combat teams, who
comprise in battalions, companies and platoons, roughly 1,000 combat platoons.
Do the math. We have so many excess Generals, each General could partner with
an LT leading a platoon into battle. That's FU. Let's cut that number back to
33, one per BCT, and find KP duty for the 967, until they find the
$6,000,000,000,000 of our last life savings that the Pentagon 'lost track of'
and is now forever MIA.
The US has 1,000 Admirals. Count 'em. We have 430
fighting ships, if you go all the way down to fuel barges, PT boats and LSTs.
Do the math. We have so many excess Admirals, each Admiral could partner with
an LT leading an LST onto the beach, and still have 570 Admirals to wade ashore
and declare the beachhead secured. That's FU. Let's cut that number back to 7,
one per fleet, and find KP duty for the 993, until they find the
$6,000,000,000,000 of our last life savings that the Pentagon 'lost track of'
and is now forever MIA.
Somebody knows where our savings went! There are over 1800 unnecessary
Admirals and Generals who could defend America and earn their $250,000 a year
salaries for life, by ferreting out the moles, rats, leeches and gribbles at
the Pentagon, clean house, right-size the armed forces, re-fund yhe VA, then
hang all the MIC lobbyists from the yardarms for treason.
It's worse. From having relatives inside the Pentagon budget process, I've
been made aware for decades that at least 1/3 of our military manpower
exists not because there is any rational need for those troops, OTHER than
having sufficient forces to justify retaining and promoting more
high-ranking (and highly-paid) Brass.
The hierarchical structure of the military assures that there are
relatively few pay billets at the top. This means that officers sitting on
promotion boards are constantly faced with the demand to "pass over" and
thus doom to early separation/retirement fellow officers who are perfectly
competent at their jobs, just not needed by the numbers.
In the immediate post WWII era, service leaders were nervous about
letting good talent go and get settled in civilian life, only to need them
for the Next Big One in a few years' time. Those few years have since
become six decades, and the system of holding onto popular people by
"creative" billeting has become institutionalized. The Armed Forces DON'T
need AT LEAST 1/3 of their personnel, especially in the higher ranks. But
the higher the rank, the more personal favors are owed to them, and the more
likely that a new job will be created requiring even more stars, in order to
assure that they stay employed at least until they can collect retirement.
The Pentagon is the world's one and and only truly functional socialist
system.
"... And that's the reason UK economics students revolted: "Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins. ..."
"... why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs. ..."
"... But the answer to their question is very simple. Neoliberals are in power and they dictate what is to be taught in Economics courses. They also promote and sustain "willing charlatans" like Mankiw, who poisons and indoctrinates students with neoclassical junk. ..."
So true; "SWL has never addressed what is happening in the real world."
And that's the reason UK economics students revolted: "Few mainstream economists predicted
the global financial crash of 2008 and academics have been accused of acting as cheerleaders for
the often labyrinthine financial models behind the crisis. Now a growing band of university students
are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative
ways of thinking have been pushed to the margins.
Economics undergraduates at the University of Manchester have formed the Post-Crash Economics
Society, which they hope will be copied by universities across the country. The organisers criticise
university courses for doing little to explain why economists failed to warn about the global
financial crisis and for having too heavy a focus on training students for City jobs."
https://www.theguardian.com/business/2013/oct/24/students-post-crash-economics
But the answer to their question is very simple. Neoliberals are in power and they dictate what is to be taught in Economics courses. They also promote and sustain "willing charlatans" like Mankiw, who poisons and indoctrinates
students with neoclassical junk.
"... Ironic that Krugman is cited as a voice for reform - he represents the neo-Keynesian hell we've got stuck in. ..."
"... I'm an economics student at the University of Glasgow, in second year as part of a compulsory course we were taught about alternative economic theories in comparison to Neoclassical models. ..."
"... The course has only been running for a few years but in response students have set up a very similar society to promote alternative thinking on economics. Even just half a semester on Post-Keynesian Economic theory has really opened our eyes to the alternatives within economics. ..."
"... I studied neoclassical 'economics' (it really isn't economics, just garbage) for five years. Began to take my graduate degree in the autumn of 2008 when everything was falling apart and I had no idea why. No clue whatsoever. After my masters degree in neoclassical 'economics' I still had no clue what had happened. ..."
"... Orthodox economics: Ignore money. Hence, ignore debt. Let the overall leverage of the economy increase until Ponzi finance fails and financial crisis begins. The debt deflation that follows means money gets even more concentrated towards the financial/political elite than before the crisis. Neo-feudalism makes way - finally war. ..."
"... Orthodox economists don't understand capitalism. They can't. The long time failed axioms underlying everything else in their theories don't allow them to do that. ..."
I'm an economics student at the University of Glasgow, in second year as part of a compulsory
course we were taught about alternative economic theories in comparison to Neoclassical models.
The course has only been running for a few years but in response students have set up a
very similar society to promote alternative thinking on economics. Even just half a semester on
Post-Keynesian Economic theory has really opened our eyes to the alternatives within economics.
I studied neoclassical 'economics' (it really isn't economics, just garbage) for five years.
Began to take my graduate degree in the autumn of 2008 when everything was falling apart and I
had no idea why. No clue whatsoever. After my masters degree in neoclassical 'economics' I still
had no clue what had happened.
Then I stumbled across Post-Keynesian economics and it took me about six months to dismiss
the neoclassical garbage. If I hadn't studied that garbage for five years it would have taken
me a few days.
Orthodox economics: Ignore money. Hence, ignore debt. Let the overall leverage of the economy
increase until Ponzi finance fails and financial crisis begins. The debt deflation that follows
means money gets even more concentrated towards the financial/political elite than before the
crisis. Neo-feudalism makes way - finally war.
Then the cycle starts again.
Orthodox economists don't understand capitalism. They can't. The long time failed axioms
underlying everything else in their theories don't allow them to do that.
"... This has echoes of a protest by students in 2011 at Harvard when a group of students walked out of the lectures by Dr Gregory Manilow. What has happened to them? ..."
"... Good for them. The economics profession has been dominated by neoliberal theoreticians for far too long. It needs bringing back to the real world. ..."
"... i went to the LSE to study maths and statistics with a sprinkling of economics (my first taste of it at the time). after a few months i was of the opinion it is based on terrible assumptions. e.g. the needs of the average consumer, which are then blown up into fantastical macroeconomical proportions which only led to flawed arguments. The subsequent financial crisis only backed this up. ..."
What a ghastly indictment of Manchester, and other economics departments - obviously being
very economic with their subject. Sounds a bit like the Natural Sciences departments being run
by creationists.
This should be the first class for the whole students in economics.
What are the limits in ecology ecosystem? And what are the needs/capacities for human flourishing?
Adventures in New Economics 2: Donut Economics, Kate Raworth
This is an open/complex map with a compass in values that I've built trying to go through both
main concepts. It's valid for personal development / companies / communities / nations / whole
planet.
This has echoes of a protest by students in 2011 at Harvard when a group of students walked
out of the lectures by Dr Gregory Manilow. What has happened to them?
I personally have observed in other disciplines that teaching tends to be a generation behind
current thinking, Particularly when it has more to do with ideology than science.
Some ten years ago, a movement called the Post-Autistic Ecomoncs Movement had a considerable
influence in Europe but has no doubt disappeared in the face of the greed which is central supporting
feature of today's neoliberalism.
i went to the LSE to study maths and statistics with a sprinkling of economics (my first
taste of it at the time). after a few months i was of the opinion it is based on terrible assumptions.
e.g. the needs of the average consumer, which are then blown up into fantastical macroeconomical
proportions which only led to flawed arguments. The subsequent financial crisis only backed this
up.
I commend this thinking by the students but if I was one of their parents forking out 27k i
would probably tell them to pass the exams they need to and get out and start earning.
LSE is a godawful uni also, unless you have given spawn to gordon gekko dont bother with it.
Alternative theories and models??? Well they are currently practiced by North Korea and these
students will be more than welcomed by the Kim family to ply their trade there.
Actually, "alternative theories" were practiced by South Korea, which has been quite a success
story. It's not either the status quo or state communism, you know.
For an understanding of how we came to have thrust upon us the "Dismal Science" of neo-classical
economics, which took shape in the 1880's - 1890's, I recommend reading "The Corruption of Economics"
by Mason Gaffney.
Essentially, economic thinking was hijacked by the robber barons who through building and funding
universities were able to subvert the teaching of economics to suit their own agenda. Classical
economics with a sound basis of three factors of production was replaced by voodhoo economics
which reduced the three factors of production to only two. Whereas once "land" was a factor of
production in its own right alongside "capital" and "labour", it was magicked away to be incorporated
as "capital" for the purpose of the land owning robber barons.
As anyone with a few braincells would know, "land" is a distinct factor of production in its
own right, and not only that, it is the primary factor since neither "capital" or "labour" would
exist without it. But "land" can exist without both the other two factors which makes it unique
and makes it primary and yet voodhoo economics has managed to hide this fact so well through the
employment of clever mathematics to create an illusion of being a solid discipline.
Neoclassical economics is the idiom of most economic discourse today. It is the paradigm
that bends the twigs of young minds. Then it confines the florescence of older ones, like chicken-wire
shaping a topiary. It took form about a hundred years ago, when Henry George and his reform
proposals were a clear and present political danger and challenge to the landed and intellectual
establishments of the world. Few people realize to what a degree the founders of Neoclassical
economics changed the discipline for the express purpose of deflecting George, discomfiting
his followers, and frustrating future students seeking to follow his arguments. The stratagem
was semantic: to destroy the very words in which he expressed himself.
To most modern readers, probably George seems too minor a figure to have warranted such an
extreme reaction. This impression is a measure of the neo-classicals' success: it is what they
sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him
in the public mind. In the process of succeeding, however, they emasculated the discipline,
impoverished economic thought, muddled the minds of countless students, rationalized free-riding
by landowners, took dignity from labor, rationalized chronic unemployment, hobbled us with
today's counterproductive tax tangle, marginalized the obvious alternative system of public
finance, shattered our sense of community, subverted a rising economic democracy for the benefit
of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy.
Not one economics graduate have I met that has heard of Henry George but yet they have all
heard of Karl Marx. The robber barons and their useful idiots have certainly achieved what they
set out to do.
As clarification the two paragraphs in italics are excerpts from the "Corruption of Economics"
by Mason Gaffney. The link to Henry George's "Progress and Poverty" is,
http://www.henrygeorge.org/pcontents.htm
"... Then Economic History was virtually withdrawn from university Economics and other courses so that only the"lies" would be taught backed up by unquestioned (i.e. purely deductive) Mathematics. It is an academic crime ..."
If a viable economic solution emerged from the universities - one which remedied the classical
models and trumped the broken neo-liberal systems, how would we recognise it?
To provide some context - and I am in no way qualified to discuss this topic really but, the
first machines to produce logic emerging from Bletchley park were not fully recognised for their
potential - the computer revolution took place elsewhere. The UK is absolute rubbish at recognising
innovation!
Good luck to the students. I hope many more get involved in this debate.
I taught Economics for forty years and over 30 of those to Singaporean scholars destined to
Oxford, Cambridge and Ivy League universities; in all those years I was aware of the lies I had
to teach in order to pass university entrance exams.
I attempted to follow the thesis that every economic theory however old or new was attempting
to answer a unique contemporary economic problem and therefore only Economic History was of relevance
in understanding a theory be Adam Smith or Keynes or even (unacademically) Thatcherism.
My students found all such information useless to passing Economics exams but interesting for
"life".
Then Economic History was virtually withdrawn from university Economics and other courses
so that only the"lies" would be taught backed up by unquestioned (i.e. purely deductive) Mathematics.
It is an academic crime.
"... Neoliberal economics not only led to the crash of 2007/8 it is continuing to wreak havoc. A
good current example is pension schemes - something we will depend on one day. They are valued using
the purest form of free market thinking: the efficient markets hypothesis - the idea that asset markets
always perfectly embody all relevant information. It is akin to belief in magic. ..."
"... It is amazing to read how narrow economics education is in modern Britain. It is not only intellectually
unenlightened and literally dangerous, given the power many economics graduates can wield, amplified
by the extraordinary sums and resources they manage, it also does a great disservice to people who are
entitled to a proper education which, clearly, they are not receiving in this monotheistic model. ..."
"... It reminds me precisely of the so-called "religious education" I received in Ireland which
was nothing of the sort. All I got was instruction in Catholic doctrine and ethics; there was no instruction
in the beliefs of any other Christian sects, let alone what goes on in the other major world religions
such as Hinduism, Judaism, or Islam. What I know about them I taught myself in later life. ..."
"... It seems that the same shameful parochial narrowness, intellectual provincialism, and "one
true religion" ethic prevails in British economic so-called "education". ..."
"... On another matter, the revelation that economists "ignore empirical evidence that contradicts
mainstream theories" destroys any notion that economics is a science, a silly claim I have always opposed.
All that it reveals is that economists have no idea what science is. ..."
Neoliberal economics not only led to the crash of 2007/8 it is continuing to wreak havoc.
A good current example is pension schemes - something we will depend on one day. They are valued
using the purest form of free market thinking: the efficient markets hypothesis - the idea that
asset markets always perfectly embody all relevant information. It is akin to belief in magic.
Yet many professionals who run pension schemes and the government regulator all support it's
use because it suits them - it deflects responsibility from them while they continue to be paid.
It's effects on society are disastrous as it leads us to believe are insolvent. The government
and actuarial profession accepted all this and enshrined it in law.
A topical example is the universities pension scheme the USS which BBC Newsnight and Radio
4 have just told us has a 'black hole' of a deficit.
Many of us thought that the EMH would ditched after its spectacular failure but no. Zombie
theories continue on their path of destruction.
It is amazing to read how narrow economics education is in modern Britain. It is not only
intellectually unenlightened and literally dangerous, given the power many economics graduates
can wield, amplified by the extraordinary sums and resources they manage, it also does a great
disservice to people who are entitled to a proper education which, clearly, they are not receiving
in this monotheistic model.
It reminds me precisely of the so-called "religious education" I received in Ireland which
was nothing of the sort. All I got was instruction in Catholic doctrine and ethics; there was
no instruction in the beliefs of any other Christian sects, let alone what goes on in the other
major world religions such as Hinduism, Judaism, or Islam. What I know about them I taught myself
in later life.
It seems that the same shameful parochial narrowness, intellectual provincialism, and "one
true religion" ethic prevails in British economic so-called "education". Intellectuals ought
to be utterly ashamed to propagate such blinkered views. Anyone who has never heard of Keynes
is culturally illiterate; that an economics student, in particular, has never heard of Keynes
is a disgrace.
On another matter, the revelation that economists "ignore empirical evidence that contradicts
mainstream theories" destroys any notion that economics is a science, a silly claim I have always
opposed. All that it reveals is that economists have no idea what science is.
Delong is a typical neoliberal stooge, not that different from Mankiw, or Summers
Note that the terms "neoliberalism", "neo-classical economics" and "financial oligarchy" were
never used...
Notable quotes:
"... "DeLong's takeaway is that economists do need to recognize that they operate in a political environment (the sewers of Romulus) in which their work will be seized upon by interested groups, with real practical outcomes. " ..."
"... UE's conclusion is that mainstream economics needs to be taken down several notches, which would open more space for alternative approaches to economics and, indeed, alternative approaches to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria of efficiency, etc. ..."
"... Simon-Wren Lewis (SWL) and Chris Dillow have both recently argued that criticising economics for the 2008 financial crisis distracts from the real source of the blame, which is banks, and therefore undermines the progressive cause. While I don't disagree that the banks deserve blame, I want to push back a bit on their argument that economics as a discipline has little to do with regressive ideas. ..."
"... Consider the case of monopoly. The economics textbooks may be against monopoly, but this is largely on the grounds that it reduces consumer welfare by increasing prices. Building on this logic, the Chicago School of anti-trust regulation has shifted the focus of anti-trust law to lowering prices for consumers. As this recent article on Amazon details, this has hidden other forms of monopoly abuse such as predatory pricing, market dominance and reduced bargaining power for workers, consumers and smaller companies. ..."
"... Or consider Reinhart and Rogoff's famous '90% debt threshold', where their statistics purportedly showed that after a country reaches 90% of sovereign debt, its growth would stall. This was used by many politicians, including George Osborne, to justify austerity - until it was revealed to be based on 'statistical errors'. Sure, R & R received a fair amount of flak for this, but they have been incredibly stubborn about the result. Where was the formal, institutional denunciation of such a glaring error from the economics profession, and of the politicians who used it to justify their regressive policies? Why are R & R still allowed to comment on the matter with even an ounce of credibility? The case for austerity undoubtedly didn't hinge on this research alone, but imagine if a politician cited faulty medical research to approve their policies - would institutions like the BMA not feel a responsibility to condemn it? (Answer: yes, even when the politician was in another country). ..."
"... There are many more examples like this, such as Andrei Shleifer, who despite being prosecuted for fraud in post-Soviet Russia was awarded the John Bates Clark medal, probably the second most prestigious prize in the discipline, was subsequently allowed to publish papers in respected journals about how well privatisation went in Russia, and was eventually bailed out of the case by his incredibly wealthy university to the tune of $26 million. This is not to mention the disastrous Russian privatisation as a whole and the role of certain economists/economic ideas in it. ..."
"... Even worse were the Chicago boys, who advised Augusto Pinochet's horrific economic policies (and no, they were not just humble advisors, they were knee deep in the absolute worst excesses of the regime.) Without any substantive ethical code and without procedures for weeding out corrupt, dishonest or discredited work, the profession creates an environment where people can act like this and get away with it, all under the banner of the intellectual credibility 'economics' seems to confer on people. ..."
"... Mainstream economists have used mathematics to hide ideology. ..."
"... They have cherry-picked mathematical constructions with highly restrictive, idealized properties and then wedged-in economic parameters to fit their purposes. That is the case with the neoclassical production function and with the Arrow-Debreu general equilibrium model. The objective was to "prove" that economies free from government control were "natural" and best. They have been sophists from their first emergence. ..."
"... Science is not capable of devising a theory that adequately explains all the human elements and serendipitous effects of an economy - and may never be capable. However, humans are capable of organizing a society according to their needs and wants. They do it on a corporate scale all the time. It isn't perfect but it works pretty well. ..."
"... Mainstream economists have fought against a managed economy because it would reduce the influence of themselves and their plutocrat sponsors. ..."
"DeLong's takeaway is that economists do need to recognize that they operate in a political
environment (the sewers of Romulus) in which their work will be seized upon by interested groups,
with real practical outcomes. "
Economics: Part of the Rot, Part of the Treatment, or Some of Each?
Is mainstream economics, with its false certitudes and ideological biases, one of the reasons
for the dismal state of policy debate in countries like the UK and the US, or are its rigorous
methods an important antidote to the ruling political foggery? That's being debated right now,
live online.
Our starting point is a post on Unlearning Economics, dated March 5, which argues that the
flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the role
of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk
support for trade agreements under the banner of comparative advantage, and regressive macroeconomic
policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair
and accused the economics profession of dereliction of duty by not taking action to rebuke the
wrongdoers:
Where was the formal, institutional denunciation of such a glaring error from the economics
profession, and of the politicians who used it to justify their regressive policies?
UE's conclusion is that mainstream economics needs to be taken down several notches, which
would open more space for alternative approaches to economics and, indeed, alternative approaches
to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria
of efficiency, etc.
Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself
to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics"
to support austerity, but "real" economists for the most part have not gone along. True, there
were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City
economists") who took a public stand against sensible Keynesian policies in the wake of the financial
crisis, but they were a minority, and, in any case, what would you want to do about them? Economists,
like professionals in any field, will disagree sometimes, and having a centralized agency to enforce
a false consensus would ultimately work against progressives and dissenters, not for them. Let's
put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed
aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse
on economic policy.
Yes-but, adds Brad DeLong. He largely agrees with SWL, but delves more deeply into the Reinhart-Rogoff
affair. He shows that, even without the famed Excel glitch, a cursory look would reveal that R-R
were trumpeting nonexistent results:
The 90% debt cliff was an artifact of the way R-R set up their bins. Replace binning with
a continuous relationship between growth and debt and the cliff disappears.
The correlation between growth and debt supported no particular causal interpretation,
and R-R provided no other evidence to support their particular causal argument.
The correlation itself was so weak that the practical implication of R-R's claim was nil.
Fiscal stimulus that could make or break a recovery was being rejected on the basis of future
economic growth effects that would be too small to measure.
So the R-R claim that fiscal consolidation was necessary and urgent was unfounded from the
get-go, and these two were both respected mainstream economists, so what can we infer? DeLong's
takeaway is that economists do need to recognize that they operate in a political environment
(the sewers of Romulus) in which their work will be seized upon by interested groups, with real
practical outcomes. In this situation, the profession as a whole has a responsibility to assess
high profile but dubious work. Although he isn't explicit, my reading is that DeLong wants some
sort of professional quality control, but not institutionalized in the way UE seems to call for.
"reactionary politicians have invoked "economics" to support austerity, but "real" economists
for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those
in the employ of the British financial sector ("City economists") who took a public stand against
sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and,
in any case, what would you want to do about them? Economists, like professionals in any field,
will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately
work against progressives and dissenters, not for them. Let's put the blame where it really belongs,
says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical
work to promulgate a reactionary, fact-free discourse on economic policy."
Simon-Wren Lewis (SWL) and Chris Dillow have both recently argued that criticising economics
for the 2008 financial crisis distracts from the real source of the blame, which is banks, and
therefore undermines the progressive cause. While I don't disagree that the banks deserve blame,
I want to push back a bit on their argument that economics as a discipline has little to do with
regressive ideas.
But firstly, it is my view that criticising economics needn't have an ideological motivation.
Many critics, myself included, simply believe that neoclassical economics has severe shortcomings
and that in order to understand the economic system properly we need better ideas. In many cases
criticisms of neoclassical economics are so abstract that it's not even clear to me what the political
implications of either side would be (e.g. the fact that Arrow-Debreu equilibrium might be unstable
has no bearing on my view of whether capitalism itself is). I respect both SWL and Dillow immensely,
but taken alone I consider this line of argument a rather feeble attempt to shut down an important
scientific and philosophical debate.
Despite this, the point has some force to it: why devote so much intellectual effort to criticising
economics when we could be devoting it to getting the big banks and other corporate wrongdoers?
And here I think SWL and Dillow both paper over the extent to which economics has served those
in power, as I will try to illustrate with a number of examples. To be clear, I'm not 'blaming'
economists for all of these occurrences, but I do think the discipline seems to eschew responsibility
for them, and that progressive economists have a blind spot when it comes to the practical consequences
of their discipline.
Economics in Practice
I've always acknowledged that economists themselves are probably more progressive than they're
usually given credit for. Nevertheless, the absence of things like power, exploitation, poverty,
inequality, conflict, and disaster in most mainstream models - centred as they are around a norm
of well-functioning markets, and focused on banal criteria like prices, output and efficiency - tends
to anodise the subject matter. In practice, this vision of the economy detracts attention from
important social issues and can even serve to conceal outright abuses. The result is that in practice,
the influence of economics has often been more regressive than progressive.
Consider the case of monopoly. The economics textbooks may be against monopoly, but this
is largely on the grounds that it reduces consumer welfare by increasing prices. Building on this
logic, the Chicago School of anti-trust regulation has shifted the focus of anti-trust law to
lowering prices for consumers. As this recent article on Amazon details, this has hidden other
forms of monopoly abuse such as predatory pricing, market dominance and reduced bargaining power
for workers, consumers and smaller companies.
Similarly, textbook ideas about profit maximisation and rational agents responding to incentives
featured prominently in the promotion of shareholder value by Milton Friedman and other economists,
which has been dominant over the past few decades and has been instrumental in increasing inequality
and corporate short-termism. The potential macroeconomic impacts of corporate concentration have
also been ignored by discipline until very recently - a consequence, perhaps, of the narrowing
of particular subfields and the neglection of more critical systemic analysis (something similar
could perhaps be said for the 2016 Prize in contract theory, though I am no expert in this area).
One type of institution which is dominated by economic ideas is central banks, yet many of
their policies have had regressive elements. For instance, SWL praises economists at the Bank
of England for implementing Quantitative Easing, but forgets that the Bank itself admitted that
this has disproportionately benefited the wealthy. This problem goes even deeper: as J W Mason
has argued, inflation targeting - a key central bank policy across the world - in practice results
in workers' wages being kept down and their jobs being made more insecure in the name of combating
inflation. In both cases what is painted as a relatively benign process - reducing interest rates
and managing inflation, respectively - actually has quite serious social consequences, which generally
aren't discussed in class or by policymakers.
In the realm of international trade, economists have been all too inclined to support trade
deals - often quite vociferously - on the basis of simple ideas like comparative advantage, while
ignoring (a) the actual details of the trade deals, which as Dean Baker frequently points out,
tend to favour the rich and corporations and (b) their own more complex economic models, which
as Dani Rodrik frequently points out, do imply that trade will harm some people while benefitting
others. Uneven and unfair international trade has been a key element of the harm to workers over
the past few decades, and was undoubtedly a factor in the election of Trump.
Global trade institutions like the IMF and World Bank have been dominated by economics since
their inception, and using economics they inflicted massive pain through their free market 'structural
adjustment' policies, which can only be described as regressive but which were fundamentally based
on context-free neoclassical ideas about markets. True, these institutions may have softened somewhat
in recent years, but that doesn't undo the harm they have caused. In fact, even their more recent
'bottom up' policies such as microcredit and Randomised Control Trials - both inspired by economic
ideas - often seem to have benefited global and local elites at the expensive of the poorest.
As Jamie Galbraith once noted in the context of the financial crisis, the discipline just has
a blind spot for how ideas interact with power to produce unfair outcomes, sometimes taking the
form of outright abuse and fraud. Which leads me nicely to my next argument.
Abusing Economics
Economists may complain that economic ideas have been misused by vested interests, and that
this isn't their responsibility. But a huge problem with the discipline of economics is that it
has virtually no institutional shields against mistakes and wrongdoing. Merton and Scholes won
the biggest prize in the profession for their model of financial markets - which had become commonly
adopted in options trading - in 1997. A year later those same economists required a hefty bailout
when the use of their model was implicated in the collapse of the hedge fund Long-Term Capital
Management, where they were both partners. Was the prize revoked? No. Were they discredited? No.
Actually, even the model is still widely used, despite massively underestimating fat tails and
therefore being implicated in a number of other financial crises, including 2008.
Or consider Reinhart and Rogoff's famous '90% debt threshold', where their statistics purportedly
showed that after a country reaches 90% of sovereign debt, its growth would stall. This was used
by many politicians, including George Osborne, to justify austerity - until it was revealed to
be based on 'statistical errors'. Sure, R & R received a fair amount of flak for this, but they
have been incredibly stubborn about the result. Where was the formal, institutional denunciation
of such a glaring error from the economics profession, and of the politicians who used it to justify
their regressive policies? Why are R & R still allowed to comment on the matter with even an ounce
of credibility? The case for austerity undoubtedly didn't hinge on this research alone, but imagine
if a politician cited faulty medical research to approve their policies - would institutions like
the BMA not feel a responsibility to condemn it? (Answer: yes, even when the politician was in
another country).
There are many more examples like this, such as Andrei Shleifer, who despite being prosecuted
for fraud in post-Soviet Russia was awarded the John Bates Clark medal, probably the second most
prestigious prize in the discipline, was subsequently allowed to publish papers in respected journals
about how well privatisation went in Russia, and was eventually bailed out of the case by his
incredibly wealthy university to the tune of $26 million. This is not to mention the disastrous
Russian privatisation as a whole and the role of certain economists/economic ideas in it.
Even worse were the Chicago boys, who advised Augusto Pinochet's horrific economic policies
(and no, they were not just humble advisors, they were knee deep in the absolute worst excesses
of the regime.) Without any substantive ethical code and without procedures for weeding out corrupt,
dishonest or discredited work, the profession creates an environment where people can act like
this and get away with it, all under the banner of the intellectual credibility 'economics' seems
to confer on people.
And this leads me to my last point, which is the rhetorical power that invoking 'economics'
has in contemporary politics. 'You don't understand economics' is - rightly or wrongly - a common
refrain of those attacking progressive policies such as Ed Miliband's proposed energy price freeze,
the minimum wage, or fiscal expansion. As with the above abuses of economics, those such as SWL
complain (perhaps correctly) that these are inaccurate representations of the field.
But these same economists then invoke 'economics' in a similar way to justify their own policies.
In my opinion, this only reinforces the dominance of economics and narrows the debate, a process
which is inherently regressive. The case against austerity does not depend on whether it is 'good
economics', but on its human impact. Nor does the case for combating climate change depend on
the present discounted value of future costs to GDP. Reclaiming political debate from the grip
of economics will make the human side of politics more central, and so can only serve a progressive
purpose.
Think about how Republicans use "Science" and scientists fight back against their misuse. In recent
decades Republicans have left the field and now "scientist" has become a bad word for them.
Mainstream economists have used mathematics to hide ideology.
They have cherry-picked mathematical constructions with highly restrictive, idealized properties
and then wedged-in economic parameters to fit their purposes. That is the case with the neoclassical
production function and with the Arrow-Debreu general equilibrium model. The objective was to
"prove" that economies free from government control were "natural" and best. They have been sophists
from their first emergence.
In the 1950s, Arrow and others proved a theorem that, many economists believe, put a rigorous
mathematical foundation beneath Adam Smith's idea of the invisible hand. The theorem shows --
in a highly abstract model -- that producers and consumers can match their desires perfectly,
given a particular set of prices.
In this rarified atmosphere of "general equilibrium," economic activity might take place efficiently
without any central coordination, simply as a result of people pursuing their self-interest.
It's an insight that economists have used to argue for de-unionization, globalization and financial
deregulation, all in the name of removing various frictions or distortions that prevent markets
from achieving the elusive equilibrium.
Yet the theorem trails a dense cloud of caveats, which Arrow himself recognized could be more
important than the proof itself. For one, it worked only in a perfect world, far removed from
the one humans actually inhabit.
Equilibrium is merely one of many conceivable states of that world; there's no particular reason
to believe that the economy would naturally tend toward it. Beautiful as the math may be, actual
experience suggests that its magical efficiency is purely theoretical, and a poor guide to reality.
Remarkably, academic macroeconomists have largely ignored these limitations, and continue to
teach the general equilibrium model -- and more modern variants with same fatal weaknesses --
as a decent approximation of reality.
Economists routinely use the framework to form their views on everything from taxation to global
trade -- portraying it as a value-free, scientific approach, when in fact it carries a hidden
ideology that casts completely free markets as the ideal.
Thus, when markets break down, the solution inevitably entails removing barriers to their proper
functioning: privatize healthcare, education or social security, keep working to free up trade,
or make labor markets more "flexible."
Those prescriptions have all too often failed, as the 2008 financial crisis eloquently demonstrated.
The result is widespread distrust of economic experts and rejection of globalization.
In his recent book "Economism: Bad Economics and the Rise of Inequality," James Kwak credits
conservative think tanks funded by corporations and the wealthy for spreading the oversimplified
belief in markets as wise machines for producing optimal social outcomes. He certainly has a point,
yet such propaganda stemmed from an intellectual model that had been lurking at the center of
economics all along -- and remains there now, still widely revered.
This perversion isn't Arrow's fault. He merely helped to prove a mathematical theorem, and
was no blind advocate for markets. Indeed, he actually thought the theorem illustrated the limitations
of capitalism, and he was prescient in understanding how economic inequality might come to impair
the workings of democratic government.
Perhaps it would be best to use his own words: "In a system where virtually all resources are
available for a price, economic power can be translated into political power by channels too obvious
for mention. In a capitalist society, economic power is very unequally distributed, and hence
democratic government is inevitably something of a sham."
Comment on Simon Wren-Lewis on 'On criticizing the existence of mainstream economics'
There is no such thing as economics, there are FOUR economixes and they are constantly played
against each other. First, there is theoretical and political economics. The crucial distinction
within theoretical economics is true/false, the crucial distinction within political economics
good/bad. Economics exhausts itself since 200+ years in crossover discussion, that is, by NOT
keeping science and politics properly apart. As a result, it got neither science nor politics
right.
Heterodox economists say that orthodox economics is false and in this very general sense they
are right. Heterodox economists have debunked much of Orthodoxy but this has not enabled them
to work out a superior alternative. The proper task of Heterodoxy is not the repetitive critique
of Orthodoxy but to fully replace it, that is, to perform a paradigm shift: "The problem is not
just to say that something might be wrong, but to replace it by something ― and that is not so
easy." (Feynman)
Because Heterodoxy has never developed a valid alternative it advocates pluralism, more precisely,
the pluralism of false theories. The argument boils down to: if Orthodoxy is allowed to sell their
rubbish in the curriculum, Heterodoxy must also be allowed to sell their rubbish. Economics is
not so much a heroic struggle about scientific truth but about a better place at the academic
trough.
The fact of the matter is that neither Orthodoxy nor Heterodoxy has the true theory and that,
by consequence, the political arguments of BOTH sides have NO sound scientific foundation.
Traditional Heterodoxy knows quite well that it has nothing to offer in the way of progressive
science and therefore argues for dumping scientific standards altogether and to focus on politics
pure and simple: "The case against austerity does not depend on whether it is 'good economics',
but on its human impact. Nor does the case for combating climate change depend on the present
discounted value of future costs to GDP. Reclaiming political debate from the grip of economics
will make the human side of politics more central, and so can only serve a progressive purpose."
This is a good idea, economists should no longer pretend to do science but openly push their
respective political agendas, after all, this is what they have actually done the past 200+ years.
Neither Orthodoxy nor traditional Heterodoxy satisfies the scientific criteria of material and
formal consistency. So, both, orthodox and heterodox economists have to get out of science because
of incurable incompetence.
It was John Stuart Mill who told economists that they must decide themselves between science
and politics: "A scientific observer or reasoner, merely as such, is not an adviser for practice.
His part is only to show that certain consequences follow from certain causes, and that to obtain
certain ends, certain means are the most effectual. Whether the ends themselves are such as ought
to be pursued, and if so, in what cases and to how great a length, it is no part of his business
as a cultivator of science to decide, and science alone will never qualify him for the decision."
Both, orthodox and heterodox economists violate the principle of the separation of science
and politics on a daily basis. Economics is what Feynman famously called cargo cult science and
neither right wing nor left wing economic policy guidance has a sound scientific foundation since
Adam Smith/Karl Marx. It is high time that economics frees itself from the corrupting grip of
politics.
Science is not capable of devising a theory that adequately explains all the human elements
and serendipitous effects of an economy - and may never be capable. However, humans are capable
of organizing a society according to their needs and wants. They do it on a corporate scale all
the time. It isn't perfect but it works pretty well.
Mainstream economists have fought against a managed economy because it would reduce the
influence of themselves and their plutocrat sponsors.
"The story of inequality they tell is also one which is essentially technology based (IT and
outsourcing), as they find that inequality is almost entirely driven by changes in between firm
inequality. They deserve credit for presenting an interesting set of facts.
However, while intriguing, I'm not yet totally convinced this is the key to understanding inequality.
Macromon [sic] also had an excellent discussion of this research awhile back...
...
I took issue with this comment "Since 1980, income inequality has risen sharply in most developed
economies". As my blog readers know, income inequality has not risen dramatically in Germany,
France, Japan, or Sweden according to Alvaredo et al.. Thus, this comment threw me: "This means
that the rising gap in pay between firms accounts for the large majority of the increase in income
inequality in the United States. It also accounts for at least a substantial part in other countries,
as research conducted in the UK, Germany, and Sweden demonstrates." Right, but the increases in
inequality in Germany and Sweden have been quite minor relative to the US, and are also associated
with changes in top marginal tax rates. So, between firm inequality isn't actually explaining
much is what I'm hearing.
"the profession as a whole has a responsibility to assess high profile but dubious work."
As in that awful paper by Gerald Friedman. Peter Dorman ripped it. I ripped. And yes the Romers
ripped it.
That is what economists are suppose to do. But you have whined about this for the last 14 months.
Reply Monday, March 27, 2017 at 07:47 AM
Yes it was a priority to demonize Friedman b/c he was coming from the left and was supposedly
supporting Bernie Sanders. It was a way for the center-left to discredit Bernie Sanders and call
him "unPresidential" and "unserious" as Hillary did.
Meawhile PGL continuously name-drops Mankiw as if he has a man crush on him.
"... You don't need to look very far to see the neoliberal ideal; it is all around us: everything a commodity, including human beings; massive differentials in life chances; sweat shops for producers juxtaposed with unimaginable wealth for the owners of capital; everybody on their own, the rolling back of collective provision and no such thing as society. ..."
"... Instead, the neoliberals talk of freedom and choice, but in reality it is freedom for the few to exploit the many and the choice to take whatever crumbs are offered to you or starve. ..."
"... Agree, but it's not that they don't talk about it. The use mathematics as a way to underscore what is essentially an ideological position. It gives them an aura of objectivity, impartiality and scientific truth which, given their prepositions about utility maximization and unbounded growth, they frankly don't have. ..."
Keynes viewed economics as a branch of philosophy. At its heart are two questions - What is
the nature of man? and What sort of society should we create? The focus on mathematical models,
based upon free-market theories, has long been a victory for ivory towers over reality. Sure,
they have an important role to play, but when they are at the centre of what is taught at universities
something has gone wrong.
The neoliberals also have strong views on the kind of society they would like to create, but
they don't talk about it often, because very few people would vote for it.
You don't need to look very far to see the neoliberal ideal; it is all around us: everything
a commodity, including human beings; massive differentials in life chances; sweat shops for producers
juxtaposed with unimaginable wealth for the owners of capital; everybody on their own, the rolling
back of collective provision and no such thing as society.
Instead, the neoliberals talk of freedom and choice, but in reality it is freedom for the
few to exploit the many and the choice to take whatever crumbs are offered to you or starve.
Agree, but it's not that they don't talk about it. The use mathematics as a way to underscore
what is essentially an ideological position. It gives them an aura of objectivity, impartiality
and scientific truth which, given their prepositions about utility maximization and unbounded
growth, they frankly don't have.
"... Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins. ..."
"... Our starting point is a post on Unlearning Economics, dated March 5, which argues that the flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the role of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk support for trade agreements under the banner of comparative advantage, and regressive macroeconomic policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair and accused the economics profession of dereliction of duty by not taking action to rebuke the wrongdoers: ..."
"... Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics" to support austerity, but "real" economists for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City economists") who took a public stand against sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and, in any case, what would you want to do about them? Economists, like professionals in any field, will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately work against progressives and dissenters, not for them. Let's put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse on economic policy. ..."
So true; "SWL has never addressed what is happening in the real world."
And that's the reason UK economics students revolted: "Few mainstream economists predicted
the global financial crash of 2008 and academics have been accused of acting as cheerleaders for
the often labyrinthine financial models behind the crisis. Now a growing band of university students
are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative
ways of thinking have been pushed to the margins.
Economics undergraduates at the University of Manchester have formed the Post-Crash Economics
Society, which they hope will be copied by universities across the country. The organisers criticise
university courses for doing little to explain why economists failed to warn about the global
financial crisis and for having too heavy a focus on training students for City jobs."
https://www.theguardian.com/business/2013/oct/24/students-post-crash-economics
pgl is a classic example. He regularly preaches what theory says but is clueless to explain
what's really happening.
Economics: Part of the Rot, Part of the Treatment, or Some of Each?
Is mainstream economics, with its false certitudes and ideological biases, one of the reasons
for the dismal state of policy debate in countries like the UK and the US, or are its rigorous
methods an important antidote to the ruling political foggery? That's being debated right now,
live online.
Our starting point is a post on Unlearning Economics, dated March 5, which argues that
the flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the
role of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk
support for trade agreements under the banner of comparative advantage, and regressive macroeconomic
policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair
and accused the economics profession of dereliction of duty by not taking action to rebuke the
wrongdoers:
Where was the formal, institutional denunciation of such a glaring error from the economics
profession, and of the politicians who used it to justify their regressive policies?
UE's conclusion is that mainstream economics needs to be taken down several notches, which
would open more space for alternative approaches to economics and, indeed, alternative approaches
to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria
of efficiency, etc.
Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself
to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics"
to support austerity, but "real" economists for the most part have not gone along. True, there
were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City
economists") who took a public stand against sensible Keynesian policies in the wake of the financial
crisis, but they were a minority, and, in any case, what would you want to do about them? Economists,
like professionals in any field, will disagree sometimes, and having a centralized agency to enforce
a false consensus would ultimately work against progressives and dissenters, not for them. Let's
put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed
aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse
on economic policy.
Yes-but, adds Brad DeLong. He largely agrees with SWL, but delves more deeply into the Reinhart-Rogoff
affair. He shows that, even without the famed Excel glitch, a cursory look would reveal that R-R
were trumpeting nonexistent results:
The 90% debt cliff was an artifact of the way R-R set up their bins. Replace binning with
a continuous relationship between growth and debt and the cliff disappears.
The correlation between growth and debt supported no particular causal interpretation,
and R-R provided no other evidence to support their particular causal argument.
The correlation itself was so weak that the practical implication of R-R's claim was nil.
Fiscal stimulus that could make or break a recovery was being rejected on the basis of future
economic growth effects that would be too small to measure.
So the R-R claim that fiscal consolidation was necessary and urgent was unfounded from the
get-go, and these two were both respected mainstream economists, so what can we infer? DeLong's
takeaway is that economists do need to recognize that they operate in a political environment
(the sewers of Romulus) in which their work will be seized upon by interested groups, with real
practical outcomes. In this situation, the profession as a whole has a responsibility to assess
high profile but dubious work. Although he isn't explicit, my reading is that DeLong wants some
sort of professional quality control, but not institutionalized in the way UE seems to call for.
"... It was an eye opener that Universities are teaching only the neo-liberal model as the core syllabus. This is not education but indoctrination. Fair play to the group then who were passionate about the need for change and realise that it is up to them to effect that change. Good luck to them, I hope that they are successful in re-claiming education as a means of furthering understanding through questioning prevailing orthodoxy. ..."
"... Good luck. You may need it. You will be surprised at how much opposition you encounter and how remorseless and relentless it is. Look up the book "Political economy now!", about the experience at the University of Sydney. ..."
"... Economics is so discredited a subject that even students who have barley started studying realise that - with a few exceptions like Stiglitz or Schiller - it is total fabricated bullshit paid for by people with enough money to benefit from the lies it spreads. ..."
"... One of the biggest lies ever told the free market, as its never ever been a reality. ..."
"... Economists, like scientists and the rest of us, are always employed by someone and therein lies the problem: the conflict between what we believe to be the truth and what we are paid to do (or teach) to keep our job. Many economists (like investors & politicians) knew the crash would burst at some point but only those who enjoyed a seat outside the system would benefit from its prediction. ..."
Few mainstream economists predicted the global financial crash of 2008 and academics have been accused
of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing
band of university students are plotting a quiet revolution against orthodox free-market teaching,
arguing that alternative ways of thinking have been pushed to the margins.
Economics undergraduates at the University of Manchester have formed the
Post-Crash Economics Society ,
which they hope will be copied by universities across the country. The organisers criticise university
courses for doing little to explain why economists failed to warn about the global financial crisis
and for having too heavy a focus on training students for City jobs.
A growing number of top economists, such as Ha-Joon Chang, who teaches economics at Cambridge
University, are backing the students.
Next month the society plans to publish a manifesto proposing sweeping reforms to the University
of Manchester's curriculum, with the hope that other institutions will follow suit.
Joe Earle, a spokesman for the Post-Crash
Economics Society and
a final-year undergraduate, said academic departments were "ignoring the crisis" and that, by neglecting
global developments and critics of the free market such as Keynes and Marx, the study of economics
was "in danger of losing its broader relevance".
Chang, who is a reader in the political economy of development at Cambridge, said he agreed with
the society's premise. The teaching of economics was increasingly confined to arcane mathematical
models, he said. "Students are not even prepared for the commercial world. Few [students] know what
is going on in China and how it influences the global economic situation. Even worse, I've met American
students who have never heard of Keynes."
In June a network of young economics students, thinkers and writers set up
Rethinking Economics , a campaign group
to challenge what they say is the predominant narrative in the subject.
Earle said students across Britain were being taught neoclassical economics "as if it was the
only theory".
He said: "It is given such a dominant position in our modules that many students aren't even aware
that there are other distinct theories out there that question the assumptions, methodologies and
conclusions of the economics we are taught."
Multiple-choice and maths questions dominate the first two years of economics degrees, which Earle
said meant most students stayed away from modules that required reading and essay-writing, such as
history of economic thought. "They think they just don't have the skills required for those sorts
of modules and they don't want to jeopardise their degree," he said. "As a consequence, economics
students never develop the faculties necessary to critically question, evaluate and compare economic
theories, and enter the working world with a false belief about what economics is and a knowledge
base limited to neoclassical theory."
In the decade before the 2008 crash, many economists dismissed warnings that property and stock
markets were overvalued. They argued that markets were correctly pricing shares, property and exotic
derivatives in line with economic models of behaviour. It was only when the US sub-prime mortgage
market unravelled that banks realised a collective failure to spot the bubble had wrecked their finances.
In his 2010 documentary Inside Job, Charles Ferguson highlighted how US academics had produced
hundreds of reports in support of the types of high-risk trading and debt-fuelled consumption that
triggered the crash.
Some leading economists have criticised university economics teaching, among them Paul Krugman,
a Nobel prize winner and professor at Princeton university who has attacked the complacency of economics
education in the US.
In an article for the New York Times in 2009,
Krugman wrote
: "As I see it, the economics profession went astray because economists, as a group, mistook
beauty, clad in impressive-looking mathematics, for truth."
Adam Posen, head of the Washington-based thinktank the Peterson Institute, said universities ignore
empirical evidence that contradicts mainstream theories in favour of "overly technical nonsense".
City economists attacked Joseph Stiglitz, the former World Bank chief economist, and Olivier Blanchard,
the current International Monetary Fund chief economist, when they criticised western governments
for cutting investment in the wake of the crash.
A Manchester University spokeman said that, as at other university courses around the world, economics
teaching at Manchester "focuses on mainstream approaches, reflecting the current state of the discipline".
He added: "It is also important for students' career prospects that they have an effective grounding
in the core elements of the subject.
"Many students at Manchester study economics in an interdisciplinary context alongside other social
sciences, especially philosophy, politics and sociology. Such students gain knowledge of different
kinds of approaches to examining social phenomena many modules taught by the department centre
on the use of quantitative techniques. These could just as easily be deployed in mainstream or non-mainstream
contexts." Since you're here
we've got a small favour to ask. More people are reading the Guardian than ever, but far fewer
are paying for it. Advertising revenues across the media are falling fast. And unlike many news organisations,
we haven't put up a paywall – we want to keep our journalism as open as we can . So you can see why
we need to ask for your help. The Guardian's independent, investigative journalism takes a lot of
time, money and hard work to produce. But we do it because we believe our perspective matters – because
it might well be your perspective, too.
If everyone who reads our reporting, who likes it, helps to support it, our future would be much
more secure.
I particularly like: Anyone who believes exponential growth can go on forever in a finite
world is either a madman or an economist. and
Economists are like computers. They need to have facts punched into them.
But my favourite is Mathematics brought rigor to Economics. Unfortunately, it also brought
mortis.
Good luck to this group. They are on the right lines.
Agreed, but they are fighting an uphill battle. Just look at how few (accademic) heterodox economists
actually work in economics departments. I think almost every heterdox economist I know works in
an non-economics school/faculty (i.e. schools/facultues of the environment, sustainability, sociology,
land use etc).
I spoke with some of the Post Crash group at a Peoples Assembly meeting recently. It was an
eye opener that Universities are teaching only the neo-liberal model as the core syllabus. This
is not education but indoctrination. Fair play to the group then who were passionate about the
need for change and realise that it is up to them to effect that change. Good luck to them, I
hope that they are successful in re-claiming education as a means of furthering understanding
through questioning prevailing orthodoxy.
Well said that man. Very well said. Unquestioning indoctrination has led us (all countries in
the world be they active participants or 'victims) to this sorry pass.
Basic economics should include the very basic idea that money is no more and no less than a
tool. If you strip money / the tool away from folk then they will either try and take your tool
from you or, if life becomes savage enough, they will fall by the wayside.
Does this generation and successive ones really want to walk over the bodies of others?
Without a profound readjustment and realignment of economic thinking, that is precisely what
is in store. Indeed, it is what has been set in motion already. Time for an urgent re-think before
more bodies litter the highways.
I heard recently about one man who had had such a re-think.
He was an American financial executive who was asked why he was taking early retirement and
going off to live in a little valley in the hills.
He replied: "Well, it is a lovely property with great scenery, fertile land and its own microhydroelectricity-----but
the really big attraction is that it puts 300 miles of armed hillbillies between me and the nearest
city"!!.
I do hope the chap in question doesn't end up regretting that he has deliberately placed himself
into a situation where there are 300 miles of armed hillbillies between himself and the nearest
city.
Good luck. You may need it. You will be surprised at how much opposition you encounter and
how remorseless and relentless it is. Look up the book "Political economy now!", about the experience
at the University of Sydney.
Exactly - the clue is in this statement from the University authorities...
It is also important for students' career prospects that they have an effective grounding
in the core elements of the subject.
Or in other words...
Students should be familar with the free market fair tales thrown up by rich, greedy bankers
and the right wing in order to earn money pandering the "correct" line
Economics is so discredited a subject that even students who have barley started studying
realise that - with a few exceptions like Stiglitz or Schiller - it is total fabricated bullshit
paid for by people with enough money to benefit from the lies it spreads.
One of the biggest lies ever told the free market, as its never ever been a reality.
Restrictions or prejudices ensure this, so such a philosophy deserves tearing up just like
their supporters who believe community and care are bad ideals. They call it socialism but it
is far from being a dirty word as it is about looking after all people on a more equal level,
so as to ensure the most vulnerable people in society are not left in a helpless and hopeless
position.
I heard recently about one man who had had such a re-think.
He was an American financial executive who was asked why he was taking early retirement and going
off to live in a little valley in the hills.
He replied: "Well, it is a lovely property with great scenery, fertile land and its own microhydroelectricity-----but
the really big attraction is that it puts 300 miles of armed hillbillies between me and the nearest
city"!!.
Thatcherist 'Reaganomics' was their response to the hissy fit Maggie threw at the 'grubby little
terrorist' Nelson Mandela when he started to put the kibosh on the elites cash cow of South African
apartheid, 4 decades of 'starving the beast' and media complicity in pushing the benefits of supply
side while pruning demand to the core by cutting back public investment which is the only source
of high velocity currency in a debt based economy where cash is simply printed to commission public
gods, services and infrastructure for a civilised society and withdrawn through tax to mitigate
inflation.
Only as we approach their ideology of fiscal apartheid do the courtiers perceive that without
demand a bleak future awaits everyone but the very few already excessively wealthy.
Economists, like scientists and the rest of us, are always employed by someone and therein
lies the problem: the conflict between what we believe to be the truth and what we are paid to
do (or teach) to keep our job. Many economists (like investors & politicians) knew the crash would
burst at some point but only those who enjoyed a seat outside the system would benefit from its
prediction.
"... $32K to hear Snooki speak at the Rutgers commencement? Are the administrators nuts? ..."
"... the Post and the legislator have certain attitudes, ideological biases if you will, towards public universities in general, and college students and the terms of their crushing college debt. ..."
"... And there was some thought that some elements in the legislature were perturbed that Rutgers did invite author Toni Morrison to speak at commencement, and did pay her $30,000 for it. And God knows what they payed Mr. Obama. ..."
"... Thank God they did not invite Hillary. ..."
"... For my son's Rutgers graduating class of 2014, the University had engaged Miss Condoleezza Rice, of Bush Administration State Department fame, to speak at that their commencement. For a $35,000 by the way. ..."
"... The professional class tends to defend the prerogatives of their own, sticking to their 'no consequences' principle for themselves and the acts of their peers, including the financiers. ..."
"... In the case of Secretary Rice, the students and faculty thought that it was hypocrisy to award an honorary law degree to someone who had consciously worked to circumvent the law, encouraged an aggressive war on contrived evidence, and helped permit the use of torture in violation of our nation's long standing principles. ..."
"... Rice signed off to give the CIA authority to conduct their torture tactics for gathering information from detainees as well. These are clearly human rights issues. By inviting her to speak and awarding her an honorary degree, we are encouraging and perpetuating a world that justifies torture and debases humanity ..."
"... I found it highly hypocritical of the Republican legislator and the arch-conservative Post to phrase their own stand against high commencement fees in such an incorrect manner, and dare I say false news . The Post and the politician knew better. They just did not give a damn in making their point. ..."
From Jeri-Lynn Scofield over at Naked Capitalism who picked up this piece in the NY post:
Snooki inspires legislation to limit state university speaker fees NY Post. Moi: Speaking
as a born and bred Jersey girl, I applaud the state legislature's action. Nice to see the state
of my birth lead the way in something other than corruption or toxic waste. And about time–
$32K to hear Snooki speak at the Rutgers commencement? Are the administrators nuts? And
the proposed $10k cap is too high. Why should any speaker receive more than expenses and a modest
honorarium, e.g., $1K– which incidentally, anyone with any class would immediately donate back
to the university.
I don't normally read the Post, except perhaps for financial pieces by John Crudele, so I was glad
to see this at a site where I do read on occasion.
This is no knock on Jeri-Lynn whose major point remains intact, that commencement fees may be
far too generous.
And as an old fogey, it seems to me to be a correct sentiment about paying far too much money
and attention to these reality tv stars, our current President notwithstanding.
Except that this even with Snooki never happened, at least not in the way that the NY Post and
the state legislator Republican Assemblyman John DiMaio portray.
And I suspect strongly that they carelessly framed the story the way in which they did, because
the Post and the legislator have certain attitudes, ideological biases if you will, towards public
universities in general, and college students and the terms of their crushing college debt.
Miss Nicole Snooki Polizzi, of Jersey Shore fame, never spoke at the Rutgers commencement,
or any commencement that I could find. And she was not paid any money by the University administration
for anything. Period.
She was paid $32,000 for two evening's 'performances' of a reality show nature for student audiences
by the student run entertainment committee, which is an autonomous organization controlled by students.
They book over 140 events per year. While the University does collect the money which in this case
amounted to roughly 90 cents per student from a pool of general fees at the very large New
Brunswick campus.
In other words, Snooki, who back in 2011 apparently had a following amongst the younger set, was
a hired entertainer engaged by the students themselves without active involvement of University officials.
And unless we wish to try and legislate the entertainment which college students may employ with
their own money, and not allow it to be an issue for student government, I don't think that the esteemed
GOP legislator's and the Post's points apply.
Rutgers University officials made no apologies today for Snooki's $32,000 appearance at a pair
of student-run events on the Piscataway campus. The "Jersey Shore" reality TV star was invited
and paid by students, who are allowed to select their own entertainment, a campus spokesman said.
"The students use funds designated for student programming. The university does not censor
the speakers students choose to invite to campus," said E.J. Miranda, a Rutgers spokesman.
I remembered this incident quite well, because my number one son was a student there at the time,
and I kidded him about it. He pretty much shrugged it off to the liberal arts and music school crowd
over the other side of the river, himself being ensconced at the Livingston and Bush campuses for
engineering, business and medical/pharmaceutical students.
And there was some thought that some elements in the legislature were perturbed that Rutgers
did invite author Toni Morrison to speak at commencement, and did pay her $30,000 for it. And God
knows what they payed Mr. Obama.
But it seemed snarky to attack that indirectly by throwing Snooki in, albeit falsely, thinking
it played better with those who think that all public projects are foolish wastes of money, and students
deserved all the bad fortune they may incur.
Thank God they did not invite Hillary. Those sort of stratospheric speaking fees are
the domain of private enterprise, like the boys on Wall Street, who exercise their private judgement
more precisely to get the most for their hard earned dollars. And as I recall they are also paid
by the for-profit private education institutions, which have been generous with fees and sinecures
for certain politicians, for example.
Let's face it. A certain amount of foolishness is a part and parcel of the coming of age rite
that is a college education, or the period between high school and family life, for most participants
Sowing a few wild oat when one is young is hardly an alien concept.
As I recall, I spent a huge sum on foolishness in my college career. I was a commuting student
who worked as an auto mechanic three or four days a week throughout. But I hate to see what my total
beer tab amounted to during that four year period.
I seem to recall consuming rather heroic volumes of beer at the school student 'mixers, and local
college beer dives, with quaint names like The Downunder, Agora, and Rathskeller while
in pursuit of good times and companionship of the female persuasion.
For my son's Rutgers graduating class of 2014, the University had engaged Miss Condoleezza
Rice, of Bush Administration State Department fame, to speak at that their commencement. For a $35,000
by the way.
But I was grateful to be spared sitting through that on a hot day because of widespread objections
to her honorarium from the University community, both faculty and students. And the faculty involvement
in this was notable. And it angered our NJ Republican politicians, very much.
It also
disappointed Barack Obama , by the way, who in his own subsequent commencement address to take
the students to task at a later commencement address but that is another story. The professional
class tends to defend the prerogatives of their own, sticking to their 'no consequences' principle
for themselves and the acts of their peers, including the financiers.
And granting our betters public venues where the common people are forced to listen, but not allowed
to answer back, is hardly an open sharing of ideas. I think the political parities had a close and
personal organizational experience that in the recent elections.
A one-way commencement address is one thing, a debate with various viewpoints is quite another.
And so the University community did what people in a weaker position always tend to do when confronted
with the unspeakable- they protested against it. And far too often, protests against what the public
views as outrages are crushed. That is what happened to Occupy Wall Street.
And now the out of power liberal establishment asks, why are so few protesting? Duh.
In the case of Secretary Rice, the students and faculty thought that it was hypocrisy to award
an honorary law degree to someone who had consciously worked to circumvent the law, encouraged an
aggressive war on contrived evidence, and helped permit the use of torture in violation of our nation's
long standing principles. Condoleezza
Rice Declines to Speak at Rutgers after Student Protests.
" Rice signed off to give the CIA authority to conduct their torture tactics for gathering
information from detainees as well. These are clearly human rights issues. By inviting her to
speak and awarding her an honorary degree, we are encouraging and perpetuating a world that justifies
torture and debases humanity ."
I found it highly hypocritical of the Republican legislator and the arch-conservative Post to
phrase their own stand against high commencement fees in such an incorrect manner, and dare I say
false news . The Post and the politician knew better. They just did not give a damn in making
their point.
And it also fits their own political bias against public works, like Universities, and any thought
of relief for students who are being crushed by debt at rates significantly higher than their parents
just provided to Wall Street to bail those contemptible jokers out.
"... Lately certain unrepentant members of that disgraced profession, some of whom claim to be the consciences of the liberal establishment, have been expressing concern about the disrepute of the 'experts' and the need to allow the technocrats to take control of policy and the economy. ..."
"... Brad DeLong, by the way, banned me from his site comments noting, 'Alan Greenspan never made a decision with which I disagreed.' Since then even Alan Greenspan has admitted he does not agree with some of his decisions, in a sniveling and sneaky kind of a non-apologetic way. ..."
"... But the specific factual point from Brad's piece that got me going was this: ..."
"... "Merton and Scholes's financial math was correct, and the crash of their hedge fund did not require any public-money bailout" ..."
"... I think it is less than trivial to know where and how the B-S risk model fails as math, as illustrated so well by Benoit Mandelbrot in his book The Misbehaviour of Markets. The math fails in its selection choice of variables and assumptions. Naseem Taleb has made a cottage industry and a personal fortune understanding this error. ..."
Ok I have to admit that the title alone got me into a cranky mood. Lately certain unrepentant
members of that disgraced profession, some of whom claim to be the consciences of the liberal establishment,
have been expressing concern about the disrepute of the 'experts' and the need to allow the technocrats
to take control of policy and the economy.
Granted, they may look like the lesser of two evils in some cases, as in the current nascent administration,
and in their own minds. But their policy consensus and economic recommendations of the past
thirty years or so, starting with the Fed chairmanship of Alan Greenspan at least, only look good
in their own selective memories. Brad DeLong, by the way, banned me from his site comments noting,
'Alan Greenspan never made a decision with which I disagreed.' Since then even Alan Greenspan
has admitted he does not agree with some of his decisions, in a sniveling and sneaky kind of a non-apologetic
way.
For everyone else this cycle of growing inequality, policy skews to the wealthy few, and asset
bubbles and bust that serve as wealth transfer mechanisms has been particularly trying.
But the specific factual point from Brad's piece that got me going was this:
"Merton and Scholes's financial math was correct, and the crash of their hedge fund did not
require any public-money bailout"
Yeah, right. Let's put aside the nicety of a Fed brokered bailout of LTCM by Wall Street money
as technically not requiring public bailout money, in order to save the financial system from an
epic overleveraged mispricing of risk based on that correct math.
I think it is less than trivial
to know where and how the B-S risk model fails as math, as illustrated so well by Benoit Mandelbrot
in his book The Misbehaviour of Markets. The math fails in its selection choice of variables
and assumptions. Naseem Taleb has made a cottage industry and a personal fortune understanding this
error.
And what makes it most egregious is that the error hs been known among those with mathematical
minds for some time. I myself read Mandelbrot's book in 2001 and said, 'holy shit.'
Let's be clear. This was not some dumb error on the part of these fellows, or some sneaky
trick. They could not resolve their math without making a certain assumption, and they did
it openly and consciously. And as the write of the essay below notes, there has not been anything
better produced yet to his knowledge.
It is not the theory itself that is 'bad.' It is the use and misuse to which it is put by
opportunists and financial predators in misrepresenting it.
But the people who use the assumptions on risk contained in the model don't care. Like
the efficient market hypothesis, it is an intellectual fig leaf that covers an epic era of
looting and plundering bases on what is essentially a con game. If you assume that risk is a rare
event, you can persuade the regulators and the very important people to let you run on leverage at
extreme levels, especially if you can use other people's money.
Like some of the other accepted truths from the turn of the century greed is good crowd, it is
a meme with which to silence the protests and permit the widespread mispricing of risk in order to
reap enormous short term profits for a very few wealthy insiders. This had been going on for
so long that it is almost accepted as a normal way of doing business.
Here is what an essay in
Criticality had to say about the Merton-Scholes math. I suppose that the sophist would
say that the math was indeed right. It was just the assumptions they used to construct the
model was wrong. So 3+5 does equal 8. Its just that in the real world case there
were three more factors that were tossed aside and ignored because they messed up the path to the
more easily determined and reassuring result.
"This implies that rather than extreme market moves being so unlikely that they make little contribution
to the overall evolution, they instead come to have a very significant contribution. In a normally
distributed market, crashes and booms are vanishingly rare, in a pareto-levy one crashes occur
and are a significant component of the final outcome.
It has taken years for this to be taken
seriously, and in the mean time financial theory has gone on using the assumption of normally
distributed returns to derive such results as the Black-Scholes option pricing equation, ultimately
winning an Nobel Prize in Economics for the discoverers Scholes and Merton (Black having already
died), not to mention Modern Portfolio theory (also winning Nobels). That modern finance ignored
Mandelbrot's discovery and went onto honor those working under assumptions shown to be false has
clearly annoyed Mandelbrot immensely and as mentioned previously he spends much of the book telling
us of his prior discoveries and how he was ignored.
It is like allowing tobacco companies to widely distribute their products while a bevy of hired gun
experts and media pundits and PR organizations promote the theory that tobacco is not a highly addictive
substance that causes a wide range of debilitating diseases, including cancer. They know
damn well that it is and it does, but they do not give a damn as long as the money is rolling in.
And pity the fool who tries to stand up and tell the truth.
And so to has it been with the Banks.
Indeed, the PR campaign and political donations they handled through their intermediaries during
the 1990s to deregulate and overturn Glass-Steagal has to be one of the great propaganda accomplishments
of the twentieth century. And the follow on campaign for the US to invade Iraq in retribution
for 9/11 is not far behind it for the twenty first.
The greater point is not that the B-S model is based on faulty assumptions that greatly diminish
the potential risks. Rather it is how such 'laws' of economics are so often of a dodgy, optionated
and theoretical nature such that taking them as a given in forming public policy is a huge mistake
in judgement.
Why? Because they may embody assumptions about what is true, and what is a priority, and
what our principles and objectives may be, and propagate those assumptions (biases) into a general
policy of our society that ends up causing great harm to many innocent participants. Indeed,
as Obama said, there is a great need to discussion and understanding. It is just that it cannot
be monopolized by a particular group of insiders who adhere to certain assumptions and professional
courtesies of their own, dare I say it, class.
So there are my two corrections to the mainstream media and their writing of the public record-
to suit themselves and their wealthy patrons. It seems like modern America spends an
enormous amount of its intellectual capital and time on finding ways to scam the public. If
we could somehow reorder the paybacks on financial corruption to even a third of what it is today
we could probably cure cancer in five years or less. That is what it would take to 'make
America great again,' for real and not just in the funny papers.
I would like to again stress that I am not finding fault with either of the two bloggers involved,
both of whom I enjoy and admire for what they do. Mark Thoma is a class act, and even when
he disagrees is very fair and open minded about it. And he keeps this site in his blogroll
despite some special interests who have argued for its removal. That is more than I can say
for some others.
Rather, I am trying to correct a couple of things from the broader media that seem to be factually
wrong, purposely, and further, to help caution the reader that things that appear in the mainstream
media written by bona fide members of the certified and qualified professional establishment
cannot always be taken at face value.
The deterioration of the quality of the news is startling. I think it has a lot to do with
the takeover of the media by a relatively few number of large corporations (thank you Slick Willy)
Yeah, there is a lot of nutty stuff on the internet and in blogs. I spend a lot of time assessing
it and avoiding it where I can. But to say that the mainstream is somehow authoritative, objective
and pure is self-serving baloney at best, and a thin veneer for official propaganda when it serves
the purpose at worst.
"... As recognized since ancient times, the coexistence of very rich and very poor leads to two possibilities, neither a happy one. The rich can rule alone, disenfranchising or even enslaving the poor, or the poor can rise up and confiscate the wealth of the rich. The rich tend to see themselves as better than the poor, a proclivity that is enhanced and even socially sanctioned in modern meritocracies. The poor, with little prospect of economic improvement and no access to political power, "might turn to a demagogue who would overthrow the government - only to become a tyrant. Oligarchy or tyranny, economic inequality meant the end of the republic." ..."
"... Some constitutions were written to contain inequalities. In Rome, the patricians ruled, but could be overruled by plebeian tribunes whose role was to protect the poor. There are constitutions with lords and commoners in separate chambers, each with well-defined powers. Sitaraman calls these "class warfare constitutions," and argues that the founding fathers of the United States found another way, a republic of equals. The middle classes, who according to David Hume were obsessed neither with pleasure-seeking, as were the rich, nor with meeting basic necessities, as were the poor, and were thus amenable to reason, could be a firm basis for a republic run in the public interest. There is some sketchy evidence that income and wealth inequality was indeed low in the 18th century, but the crucial point is that early America was an agrarian society of cultivators with an open frontier. No one needed to be poor when land was available in the West. ..."
"... Jefferson was proud of his achievement in abolishing the entail and primogeniture in Virginia, writing the laws that "laid the ax to the root of Pseudoaristocracy." He called for progressive taxation and, like the other founders, feared that the inheritance of wealth would lead to the establishment of an aristocracy. ..."
"... Madison tried to calculate how long the frontier would last, and understood the threat to the Constitution that industrialization would bring; many of the founders thought of wage labor as little better than slavery and hoped that America could remain an agrarian society. ..."
"... In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. Politics can respond to inequality, and the Constitution is not set in stone. ..."
"... It's interesting that the language of inequality is the language of technocrats, however worthy. It's a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements. ..."
It's Not Just Unfair: Inequality Is a Threat to Our Governance
By ANGUS DEATON
THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION
Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman
President Obama labeled income inequality "the defining challenge of our time." But why exactly?
And why "our time" especially? In part because we now know just how much goes to the very top
of the income distribution, and beyond that, we know that recent economic growth, which has been
anemic in any case, has accrued mostly to those who were already well-heeled, leaving stagnation
or worse for many Americans. But why is this a problem?
Why am I hurt if Mark Zuckerberg develops Facebook, and gets rich on the proceeds? Some care
about the unfairness of income inequality itself, some care about the loss of upward mobility
and declining opportunities for our kids and some care about how people get rich - hard work and
innovation are O.K., but theft, legal or otherwise, is not. Yet there is one threat of inequality
that is widely feared, and that has been debated for thousands of years, which is that inequality
can undermine governance. In his fine book, both history and call to arms, Ganesh Sitaraman argues
that the contemporary explosion of inequality will destroy the American Constitution, which is
and was premised on the existence of a large and thriving middle class. He has done us all a great
service, taking an issue of overwhelming public importance, delving into its history, helping
understand how our forebears handled it and building a platform to think about it today.
As recognized since ancient times, the coexistence of very rich and very poor leads to two
possibilities, neither a happy one. The rich can rule alone, disenfranchising or even enslaving
the poor, or the poor can rise up and confiscate the wealth of the rich. The rich tend to see
themselves as better than the poor, a proclivity that is enhanced and even socially sanctioned
in modern meritocracies. The poor, with little prospect of economic improvement and no access
to political power, "might turn to a demagogue who would overthrow the government - only to become
a tyrant. Oligarchy or tyranny, economic inequality meant the end of the republic."
Some constitutions were written to contain inequalities. In Rome, the patricians ruled, but
could be overruled by plebeian tribunes whose role was to protect the poor. There are constitutions
with lords and commoners in separate chambers, each with well-defined powers. Sitaraman calls
these "class warfare constitutions," and argues that the founding fathers of the United States
found another way, a republic of equals. The middle classes, who according to David Hume were
obsessed neither with pleasure-seeking, as were the rich, nor with meeting basic necessities,
as were the poor, and were thus amenable to reason, could be a firm basis for a republic run in
the public interest. There is some sketchy evidence that income and wealth inequality was indeed
low in the 18th century, but the crucial point is that early America was an agrarian society of
cultivators with an open frontier. No one needed to be poor when land was available in the West.
The founders worried a good deal about people getting too rich. Jefferson was proud of his
achievement in abolishing the entail and primogeniture in Virginia, writing the laws that "laid
the ax to the root of Pseudoaristocracy." He called for progressive taxation and, like the other
founders, feared that the inheritance of wealth would lead to the establishment of an aristocracy.
(Contrast this with those today who simultaneously advocate both equality of opportunity and the
abolition of estate taxes.) Madison tried to calculate how long the frontier would last, and understood
the threat to the Constitution that industrialization would bring; many of the founders thought
of wage labor as little better than slavery and hoped that America could remain an agrarian society.
Of course, the fears about industrialization were realized, and by the late 19th century, in
the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps
the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law
School, highlights the achievements of the Progressive movement, one of whose aims was taming
inequality, and which successfully modified the Constitution. There were four constitutional amendments
in seven years - the direct election of senators, the franchise for women, the prohibition of
alcohol and the income tax. To which I would add another reform, the establishment of the Federal
Reserve, which provided a mechanism for handling financial crises without the need for the government
to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary
people by bringing down the cost of manufactures. Politics can respond to inequality, and the
Constitution is not set in stone.
What of today, when inequality is back in full force? ...
Angus Deaton, a professor emeritus at Princeton, was awarded the Nobel in economic science in
2015.
Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton
Summary
We build on and extend the findings in Case and Deaton (2015 * ) on increases in mortality
and morbidity among white non-Hispanic Americans in midlife since the turn of the century. Increases
in all-cause mortality continued unabated to 2015, with additional increases in drug overdoses,
suicides, and alcoholic-related liver mortality, particularly among those with a high-school degree
or less. The decline in mortality from heart disease has slowed and, most recently, stopped, and
this combined with the three other causes is responsible for the increase in all-cause mortality.
Not only are educational differences in mortality among whites increasing, but mortality is rising
for those without, and falling for those with, a college degree. This is true for non-Hispanic
white men and women in all age groups from 25-29 through 60-64. Mortality rates among blacks and
Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with
only a high-school degree was 30 percent lower than the mortality rate of blacks in the same age
group; by 2015, it was 30 percent higher. There are similar crossovers between white and black
mortality in all age groups from 25-29 to 60-64.
Mortality rates in comparable rich countries have continued their pre-millennial fall at the
rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling
for those with low levels of educational attainment, and are doing so more rapidly than mortality
rates for those with higher levels of education.
Many commentators have suggested that the poor mortality outcomes can be attributed to slowly
growing, stagnant, and even declining incomes; we evaluate this possibility, but find that it
cannot provide a comprehensive explanation. In particular, the income profiles for blacks and
Hispanics, whose mortality has fallen, are no better than those for whites. Nor is there any evidence
in the European data that mortality trends match income trends, in spite of sharply different
patterns of median income across countries after the Great Recession.
We propose a preliminary but plausible story in which cumulative disadvantage over life, in
the labor market, in marriage and child outcomes, and in health, is triggered by progressively
worsening labor market opportunities at the time of entry for whites with low levels of education.
This account, which fits much of the data, has the profoundly negative implication that policies,
even ones that successfully improve earnings and jobs, or redistribute income, will take many
years to reverse the mortality and morbidity increase, and that those in midlife now are likely
to do much worse in old age than those currently older than 65. This is in contrast to an account
in which resources affect health contemporaneously, so that those in midlife now can expect to
do better in old age as they receive Social Security and Medicare. None of this implies that there
are no policy levers to be pulled; preventing the over-prescription of opioids is an obvious target
that would clearly be helpful.
"Of course, the fears about industrialization were realized, and by the late 19th century, in
the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps
the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law
School, highlights the achievements of the Progressive movement, one of whose aims was taming
inequality, and which successfully modified the Constitution. There were four constitutional amendments
in seven years - the direct election of senators, the franchise for women, the prohibition of
alcohol and the income tax. To which I would add another reform, the establishment of the Federal
Reserve, which provided a mechanism for handling financial crises without the need for the government
to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary
people by bringing down the cost of manufactures. "
It's interesting that the language of inequality is the language of technocrats, however worthy.
It's a way to talk about the politics without referring to Marxist or populist/labor traditions
which often involve social movements.
Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton
Summary
We build on and extend the findings in Case and Deaton (2015 * ) on increases in mortality
and morbidity among white non-Hispanic Americans in midlife since the turn of the century. Increases
in all-cause mortality continued unabated to 2015, with additional increases in drug overdoses,
suicides, and alcoholic-related liver mortality, particularly among those with a high-school degree
or less. The decline in mortality from heart disease has slowed and, most recently, stopped, and
this combined with the three other causes is responsible for the increase in all-cause mortality.
Not only are educational differences in mortality among whites increasing, but mortality is rising
for those without, and falling for those with, a college degree. This is true for non-Hispanic
white men and women in all age groups from 25-29 through 60-64. Mortality rates among blacks and
Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with
only a high-school degree was 30 percent lower than the mortality rate of blacks in the same age
group; by 2015, it was 30 percent higher. There are similar crossovers between white and black
mortality in all age groups from 25-29 to 60-64.
Mortality rates in comparable rich countries have continued their pre-millennial fall at the
rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling
for those with low levels of educational attainment, and are doing so more rapidly than mortality
rates for those with higher levels of education.
Many commentators have suggested that the poor mortality outcomes can be attributed to slowly
growing, stagnant, and even declining incomes; we evaluate this possibility, but find that it
cannot provide a comprehensive explanation. In particular, the income profiles for blacks and
Hispanics, whose mortality has fallen, are no better than those for whites. Nor is there any evidence
in the European data that mortality trends match income trends, in spite of sharply different
patterns of median income across countries after the Great Recession.
We propose a preliminary but plausible story in which cumulative disadvantage over life, in
the labor market, in marriage and child outcomes, and in health, is triggered by progressively
worsening labor market opportunities at the time of entry for whites with low levels of education.
This account, which fits much of the data, has the profoundly negative implication that policies,
even ones that successfully improve earnings and jobs, or redistribute income, will take many
years to reverse the mortality and morbidity increase, and that those in midlife now are likely
to do much worse in old age than those currently older than 65. This is in contrast to an account
in which resources affect health contemporaneously, so that those in midlife now can expect to
do better in old age as they receive Social Security and Medicare. None of this implies that there
are no policy levers to be pulled; preventing the over-prescription of opioids is an obvious target
that would clearly be helpful.
"Of course, the fears about industrialization were realized, and by the late 19th century, in
the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps
the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law
School, highlights the achievements of the Progressive movement, one of whose aims was taming
inequality, and which successfully modified the Constitution. There were four constitutional amendments
in seven years - the direct election of senators, the franchise for women, the prohibition of
alcohol and the income tax. To which I would add another reform, the establishment of the Federal
Reserve, which provided a mechanism for handling financial crises without the need for the government
to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary
people by bringing down the cost of manufactures. "
It's interesting that the language of inequality is the language of technocrats, however worthy.
It's a way to talk about the politics without referring to Marxist or populist/labor traditions
which often involve social movements.
Hot Topics
I've discussed the Credit Suisse Global Wealth Reports before, an excellent source of data
for both wealth and wealth inequality. The
most recent edition
, from November 2016, shows the United States getting wealthier, but
steadily more unequal in wealth per adult and dropping from 25th to 27th in median wealth
per adult since 2014. Moreover, on a global scale, it reports that the top 1% of wealth
holders hold 50.8% of the world's wealth (Report, p. 18).
One important point to bear in
mind is that while the United States remains the fourth-highest country for wealth per
adult (after Switzerland, Iceland, and Australia) at $344,692, its median wealth per adult
has fallen to 27th in the world, down to $44,977. As I have pointed out before, the reason
for this is much higher inequality in the U.S. In fact, the U.S. ratio of mean to median
wealth per adult is 7.66:1, the highest of all rich countries by a long shot.
The tables below illustrate this. First, I will present the 29 countries with median
wealth per adult over $40,000 per year, from largest to smallest. The second table also
includes mean wealth per adult and the mean/median ratio, sorted by the inequality ratio.
Now that I've got your attention, let me remind you why this low level of median wealth
is a BIG PROBLEM. Quite simply, we are careening towards a retirement crisis as Baby
Boomers like myself find their income drop off a cliff in retirement. As
I reported in 2013
, 49% (!) of all private sector workers have no retirement plan at
all, not even a crappy 401(k). 31% have only a 401(k), which shifts all the investment risk
on to the individual, rather than pooling that risk as Social Security does. And many
people had to borrow against their 401(k) during the Great Recession, including 1/3 of
people
in their forties
. The overall savings shortfall is $6.6 trillion! If Republican leaders
finally get their wish to gut Social Security, prepare to see levels of elder poverty
unlike anything in generations. It will not be pretty.
Let's move now to the inequality data, where I'll present median wealth per adult, mean
wealth per adult, and the mean-to-median ratio, a significant indicator of inequality.
These data will be sorted by that ratio.
1. United
States
$ 44,977
$344,692
7.66
2. Denmark
$ 52,279
$259,816
4.97
3. Germany
$ 42,833
$185,175
4.32
4. Austria
$ 52,519
$206,002
3.92
5. Israel
$ 54,384
$176,263
3.24
6. Kuwait
$ 40,803
$119,038
2.92
7. Finland
$ 52,427
$146,733
2.80
8. Canada
$ 96,664
$270,179
2.80
9. Taiwan
$ 63,134
$172,847
2.74
10. Singapore
$101,386
$276,885
2.73
11. United Kingdom
$107,865
$288,808
2.68
12. Ireland
$ 80,668
$214,589
2.66
13. Luxembourg
$125,452
$316,466
2.52
14. Korea
$ 64,686
$159,914
2.47
15. France
$ 99,923
$244,365
2.45
16. United Arab Emirates
$ 62,332
$151,098
2.42
17. Norway
$135,012
$312,339
2.31
18. Australia
$162,815
$375,573
2.31
19. Switzerland
$244,002
$561,854
2.30
20. Netherlands
$ 81,118
$184,378
2.27
21. New Zealand
$135,755
$298,930
2.20
22. Iceland
$188,088
$408,595
2.17
23. Qatar
$ 74,820
$161,666
2.16
24. Malta
$ 54,562
$116,185
2.13
25. Spain
$ 56,500
$116,320
2.06
26. Greece
$ 53,266
$103,569
1.94
27. Italy
$104,105
$202,288
1.94
28. Japan
$120,493
$230,946
1.92
29. Belgium
$154,815
$270,613
1.75
Source: Author's calculations from Credit Suisse Global Wealth Databook 2016, Table 3-1
As you can see, the U.S. inequality ratio is more than 50% higher than #2 Denmark and
fully three times as high as the median country on the list, France. As the title says,
this is not even close.
The message couldn't be clearer: Get down to your town halls and let your Senators and
Representatives know that it's time to raise Social Security benefits and forget the
nonsense of cutting them.
It's Not Just Unfair: Inequality Is a Threat to Our Governance
By ANGUS DEATON
THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION
Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman
President Obama labeled income inequality "the defining challenge
of our time." But why exactly? And why "our time" especially?
In part because we now know just how much goes to the very top
of the income distribution, and beyond that, we know that recent
economic growth, which has been anemic in any case, has accrued
mostly to those who were already well-heeled, leaving stagnation
or worse for many Americans. But why is this a problem?
Why am I hurt if Mark Zuckerberg develops Facebook, and gets
rich on the proceeds? Some care about the unfairness of income
inequality itself, some care about the loss of upward mobility
and declining opportunities for our kids and some care about
how people get rich - hard work and innovation are O.K., but
theft, legal or otherwise, is not. Yet there is one threat of
inequality that is widely feared, and that has been debated for
thousands of years, which is that inequality can undermine governance.
In his fine book, both history and call to arms, Ganesh Sitaraman
argues that the contemporary explosion of inequality will destroy
the American Constitution, which is and was premised on the existence
of a large and thriving middle class. He has done us all a great
service, taking an issue of overwhelming public importance, delving
into its history, helping understand how our forebears handled
it and building a platform to think about it today.
As recognized since ancient times, the coexistence of very
rich and very poor leads to two possibilities, neither a happy
one. The rich can rule alone, disenfranchising or even enslaving
the poor, or the poor can rise up and confiscate the wealth of
the rich. The rich tend to see themselves as better than the
poor, a proclivity that is enhanced and even socially sanctioned
in modern meritocracies. The poor, with little prospect of economic
improvement and no access to political power, "might turn to
a demagogue who would overthrow the government - only to become
a tyrant. Oligarchy or tyranny, economic inequality meant the
end of the republic."
Some constitutions were written to contain inequalities. In
Rome, the patricians ruled, but could be overruled by plebeian
tribunes whose role was to protect the poor. There are constitutions
with lords and commoners in separate chambers, each with well-defined
powers. Sitaraman calls these "class warfare constitutions,"
and argues that the founding fathers of the United States found
another way, a republic of equals. The middle classes, who according
to David Hume were obsessed neither with pleasure-seeking, as
were the rich, nor with meeting basic necessities, as were the
poor, and were thus amenable to reason, could be a firm basis
for a republic run in the public interest. There is some sketchy
evidence that income and wealth inequality was indeed low in
the 18th century, but the crucial point is that early America
was an agrarian society of cultivators with an open frontier.
No one needed to be poor when land was available in the West.
The founders worried a good deal about people getting too
rich. Jefferson was proud of his achievement in abolishing the
entail and primogeniture in Virginia, writing the laws that "laid
the ax to the root of Pseudoaristocracy." He called for progressive
taxation and, like the other founders, feared that the inheritance
of wealth would lead to the establishment of an aristocracy.
(Contrast this with those today who simultaneously advocate both
equality of opportunity and the abolition of estate taxes.) Madison
tried to calculate how long the frontier would last, and understood
the threat to the Constitution that industrialization would bring;
many of the founders thought of wage labor as little better than
slavery and hoped that America could remain an agrarian society.
Of course, the fears about industrialization were realized,
and by the late 19th century, in the Gilded Age, income inequality
had reached levels comparable to those we see today. In perhaps
the most original part of his book, Sitaraman, an associate professor
of law at Vanderbilt Law School, highlights the achievements
of the Progressive movement, one of whose aims was taming inequality,
and which successfully modified the Constitution. There were
four constitutional amendments in seven years - the direct election
of senators, the franchise for women, the prohibition of alcohol
and the income tax. To which I would add another reform, the
establishment of the Federal Reserve, which provided a mechanism
for handling financial crises without the need for the government
to be bailed out by rich bankers, as well as the reduction in
the tariff, which favored ordinary people by bringing down the
cost of manufactures. Politics can respond to inequality, and
the Constitution is not set in stone.
What of today, when inequality is back in full force? ...
Angus Deaton, a professor emeritus at Princeton, was awarded
the Nobel in economic science in 2015.
Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton
Summary
We build on and extend the findings in Case and Deaton (2015
* ) on increases in mortality and morbidity among white non-Hispanic
Americans in midlife since the turn of the century. Increases
in all-cause mortality continued unabated to 2015, with additional
increases in drug overdoses, suicides, and alcoholic-related
liver mortality, particularly among those with a high-school
degree or less. The decline in mortality from heart disease has
slowed and, most recently, stopped, and this combined with the
three other causes is responsible for the increase in all-cause
mortality. Not only are educational differences in mortality
among whites increasing, but mortality is rising for those without,
and falling for those with, a college degree. This is true for
non-Hispanic white men and women in all age groups from 25-29
through 60-64. Mortality rates among blacks and Hispanics continue
to fall; in 1999, the mortality rate of white non-Hispanics aged
50-54 with only a high-school degree was 30 percent lower than
the mortality rate of blacks in the same age group; by 2015,
it was 30 percent higher. There are similar crossovers between
white and black mortality in all age groups from 25-29 to 60-64.
Mortality rates in comparable rich countries have continued
their pre-millennial fall at the rates that used to characterize
the US. In contrast to the US, mortality rates in Europe are
falling for those with low levels of educational attainment,
and are doing so more rapidly than mortality rates for those
with higher levels of education.
Many commentators have suggested that the poor mortality outcomes
can be attributed to slowly growing, stagnant, and even declining
incomes; we evaluate this possibility, but find that it cannot
provide a comprehensive explanation. In particular, the income
profiles for blacks and Hispanics, whose mortality has fallen,
are no better than those for whites. Nor is there any evidence
in the European data that mortality trends match income trends,
in spite of sharply different patterns of median income across
countries after the Great Recession.
We propose a preliminary but plausible story in which cumulative
disadvantage over life, in the labor market, in marriage and
child outcomes, and in health, is triggered by progressively
worsening labor market opportunities at the time of entry for
whites with low levels of education. This account, which fits
much of the data, has the profoundly negative implication that
policies, even ones that successfully improve earnings and jobs,
or redistribute income, will take many years to reverse the mortality
and morbidity increase, and that those in midlife now are likely
to do much worse in old age than those currently older than 65.
This is in contrast to an account in which resources affect health
contemporaneously, so that those in midlife now can expect to
do better in old age as they receive Social Security and Medicare.
None of this implies that there are no policy levers to be pulled;
preventing the over-prescription of opioids is an obvious target
that would clearly be helpful.
"Of course, the fears about industrialization were realized,
and by the late 19th century, in the Gilded Age, income inequality
had reached levels comparable to those we see today. In perhaps
the most original part of his book, Sitaraman, an associate professor
of law at Vanderbilt Law School, highlights the achievements
of the Progressive movement, one of whose aims was taming inequality,
and which successfully modified the Constitution. There were
four constitutional amendments in seven years - the direct election
of senators, the franchise for women, the prohibition of alcohol
and the income tax. To which I would add another reform, the
establishment of the Federal Reserve, which provided a mechanism
for handling financial crises without the need for the government
to be bailed out by rich bankers, as well as the reduction in
the tariff, which favored ordinary people by bringing down the
cost of manufactures. "
It's interesting that the language
of inequality is the language of technocrats, however worthy.
It's a way to talk about the politics without referring to
Marxist or populist/labor traditions which often involve social
movements.
Received a "new academic programs" missive from my alma mater in today's
mail, containing the following:
How to Make Innovation Happen in Your Organization
The Certified Professional Innovator (CPI) program is intended to develop
the competency of high potential leaders in the theory and practice of
innovation. It is rooted on the principle that innovation can only be
learned by doing and through many short bursts of experimentation.
The certification is comprised of a 12-week curriculum with specific
syllabus and assignments for each week, including videos, workbook
assignments, and reports. During the program, participants, functioning as a
cohort, communicate and collaborate with each other and faculty through a
series of webinars and discussions. The program culminates in project
pitches.
"It is rooted on [sic] the principle that innovation can only be learned by
doing and through many short bursts of experimentation" - OK, fine there, but
it is also rooted in the notion that such creativity can be taught in a formal
academic setting, here monetized and condensed into a 12-week program. As for
me, I'm gonna hold out for the following surely-in-development mini-courses:
o Certified Professional Serial Disruptor (CPD)
o Certified Professional Innovative Thought Leader (CPCTL)
o Certified Professional Smart Creative (CPSC)
I love the smell of money-greased credentialism in the morning.
It's Not Just Unfair: Inequality Is a Threat to Our
Governance
By ANGUS DEATON
THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION
Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman
President Obama labeled income inequality "the defining
challenge of our time." But why exactly? And why "our time"
especially? In part because we now know just how much goes to
the very top of the income distribution, and beyond that, we
know that recent economic growth, which has been anemic in
any case, has accrued mostly to those who were already
well-heeled, leaving stagnation or worse for many Americans.
But why is this a problem?
Why am I hurt if Mark Zuckerberg develops Facebook, and
gets rich on the proceeds? Some care about the unfairness of
income inequality itself, some care about the loss of upward
mobility and declining opportunities for our kids and some
care about how people get rich - hard work and innovation are
O.K., but theft, legal or otherwise, is not. Yet there is one
threat of inequality that is widely feared, and that has been
debated for thousands of years, which is that inequality can
undermine governance. In his fine book, both history and call
to arms, Ganesh Sitaraman argues that the contemporary
explosion of inequality will destroy the American
Constitution, which is and was premised on the existence of a
large and thriving middle class. He has done us all a great
service, taking an issue of overwhelming public importance,
delving into its history, helping understand how our
forebears handled it and building a platform to think about
it today.
As recognized since ancient times, the coexistence of very
rich and very poor leads to two possibilities, neither a
happy one. The rich can rule alone, disenfranchising or even
enslaving the poor, or the poor can rise up and confiscate
the wealth of the rich. The rich tend to see themselves as
better than the poor, a proclivity that is enhanced and even
socially sanctioned in modern meritocracies. The poor, with
little prospect of economic improvement and no access to
political power, "might turn to a demagogue who would
overthrow the government - only to become a tyrant. Oligarchy
or tyranny, economic inequality meant the end of the
republic."
Some constitutions were written to contain inequalities.
In Rome, the patricians ruled, but could be overruled by
plebeian tribunes whose role was to protect the poor. There
are constitutions with lords and commoners in separate
chambers, each with well-defined powers. Sitaraman calls
these "class warfare constitutions," and argues that the
founding fathers of the United States found another way, a
republic of equals. The middle classes, who according to
David Hume were obsessed neither with pleasure-seeking, as
were the rich, nor with meeting basic necessities, as were
the poor, and were thus amenable to reason, could be a firm
basis for a republic run in the public interest. There is
some sketchy evidence that income and wealth inequality was
indeed low in the 18th century, but the crucial point is that
early America was an agrarian society of cultivators with an
open frontier. No one needed to be poor when land was
available in the West.
The founders worried a good deal about people getting too
rich. Jefferson was proud of his achievement in abolishing
the entail and primogeniture in Virginia, writing the laws
that "laid the ax to the root of Pseudoaristocracy." He
called for progressive taxation and, like the other founders,
feared that the inheritance of wealth would lead to the
establishment of an aristocracy. (Contrast this with those
today who simultaneously advocate both equality of
opportunity and the abolition of estate taxes.) Madison tried
to calculate how long the frontier would last, and understood
the threat to the Constitution that industrialization would
bring; many of the founders thought of wage labor as little
better than slavery and hoped that America could remain an
agrarian society.
Of course, the fears about industrialization were
realized, and by the late 19th century, in the Gilded Age,
income inequality had reached levels comparable to those we
see today. In perhaps the most original part of his book,
Sitaraman, an associate professor of law at Vanderbilt Law
School, highlights the achievements of the Progressive
movement, one of whose aims was taming inequality, and which
successfully modified the Constitution. There were four
constitutional amendments in seven years - the direct
election of senators, the franchise for women, the
prohibition of alcohol and the income tax. To which I would
add another reform, the establishment of the Federal Reserve,
which provided a mechanism for handling financial crises
without the need for the government to be bailed out by rich
bankers, as well as the reduction in the tariff, which
favored ordinary people by bringing down the cost of
manufactures. Politics can respond to inequality, and the
Constitution is not set in stone.
What of today, when inequality is back in full force? I am
not persuaded that we can be saved by the return of a
rational and public-spirited middle class, even if I knew
exactly how to identify middle-class people, or to measure
how well they are doing. Nor is it clear, postelection,
whether the threat is an incipient oligarchy or an incipient
populist autocracy; our new president tweets from one to the
other. And European countries, without America's middle-class
Constitution, face some of the same threats, though more from
autocracy than from plutocracy, which their constitutions may
have helped them resist. Yet it is clear that we in the
United States face the looming threat of a takeover of
government by those who would use it to enrich themselves
together with a continuing disenfranchisement of large
segments of the population....
Angus Deaton, a professor emeritus at Princeton, was awarded
the Nobel in economic science in 2015.
As for ".. it is clear that we in the
United States face the looming threat of a takeover of
government by those who would use it to enrich themselves
together with a continuing disenfranchisement of large
segments of the population...."
that was accomplished in 1980 by Reagan. That's why we now
can speak about "a colony nation" within the USA which
encompasses the majority of population.
"... History will look back at us with the same wonder that we look back on the mad excesses of certain nations founded in devotion to extreme, almost other-worldly, ideologies of the last century. ..."
"... Apparently the slashing of health benefits for the unfortunate is not severe enough in the proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the cure-all deregulated market on the American public, again. Like a dog returns to its vomit. ..."
"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather
deliberate actions by the government to redistribute income from the rest of us to the one percent.
This pattern of government action shows up in all areas of government policy."
Dean Baker
"When the modern corporation acquires power over markets, power in the community, power over
the state and power over belief, it is a political instrument, different in degree but not in
kind from the state itself. To hold otherwise - to deny the political character of the modern
corporation - is not merely to avoid the reality.
It is to disguise the reality. The victims of that disguise are those we instruct in error."
John Kenneth Galbraith
And unfortunately the working class victims of that disguise are going to be receiving the consequences
of their folly, and then some.
Secure in their monopolies and key positions with regard to reform and the law, the corporations
are further acquiring access to the protections of the rights of individuals as well, it appears,
at least according to Citizens United .
Maybe our leaders and their self-proclaimed technocrats will finally do the right thing. I personally
doubt it, except that if they do it will probably be by accident.
More likely, the right thing will eventually come about the old-fashioned way- under the duress
of a crisis, and the growing protests of the much neglected and long suffering.
History will look back at us with the same wonder that we look back on the mad excesses of certain
nations founded in devotion to extreme, almost other-worldly, ideologies of the last century.
... ... ...
Apparently the slashing of health benefits for the unfortunate is not severe enough in the
proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the
cure-all deregulated market on the American public, again. Like a dog returns to its vomit.
Better if they start breaking up corporate health monopolies and embrace real reform at the sources
of the soaring costs. The US pays far, far too much for drugs and healthcare, and deregulating the
markets is not the solution. We do have the example of the rest of the developed world for what to
do about this. It is called 'single payer.'
But players keep on playing. And politicians and their enablers in the professions will not see
what their big money donors do not wish them to see. And that is one of their few bipartisan efforts.
Might one suggest that our political animals stop trying to do all the reforming and cost controls
bottom up, while applying the stimulus top down? That approach they have been flogging to no avail
for about thirty years is a recipe for a dying middle class.
Here is a short video from the Bernie Sanders WV town hall that shows The Face of American Desperation.
By the way, the governor of West Virginia is a Democrat. He wasn't there.
Sunday, March 19, 2017
What is full employment anyway, and how
would we know if we are there?
What are people talking about when they
say "full employment?" Maybe they don't
know either? Whatever it is, "full
employment" is thought to be important
for policy, particularly monetary
policy. Indeed, it typically enters the
monetary policy discussion as "maximum
employment," the second leg of the Fed's
dual mandate - the first leg being
"price stability."
Perhaps surprisingly, there are still
people who think the US economy is not
at "full employment." I hate to pick on
Narayana, but he's a convenient example.
He posted this on his
Twitter account:
Are we close to full emp? In steady
state, emp. growth will be about 1.2M
per year. It's about *twice* that in
the data. (1) Employment is growing
much faster than long run and
inflation is still low. Conclusion:
we're well below long run steady
state. end
Also in
an interview on Bloomberg,
Narayana
gives us the policy conclusion.
Basically, he thinks there is still
"slack" in the economy. My understanding
is that "slack" means we are below "full
employment."
So what is Narayana saying? I'm assuming
he is looking at payroll employment -
the employment number that comes from
the
establishment survey.
In his
judgement, in a "steady state," which
for him seems to mean the "full
employment" state, payroll employment
would be growing at 1.2M per year, or
100,000 per month. But over the last
three months, the average increase in
payroll employment has exceeded 200,000
per month. So, if we accept all of
Narayana's assumptions, we would say the
US economy is below full employment - it
has some catching up to do. According to
Narayana, employment can grow for some
time in excess of 100,000 jobs per
month, until we catch up to full
employment, and monetary policy should
help that process along by refraining
from interest rate hikes in the
meantime.
Again, even if we accept all of
Narayana's assumptions, we could
disagree about his policy
recommendation. Maybe the increase in
the fed funds rate target will do little
to impede the trajectory to full
employment. Maybe it takes monetary
policy a period of time to work, and by
the time interest rate hikes have their
effect we are at full employment. Maybe
the interest rate hikes will allow the
Fed to make progress on other policy
goals than employment. But let's explore
this issue in depth - let's investigate
what we know about "full employment" and
how we would determine from current data
if we are there or not.
Where does Narayana get his 1.2M number
from? Best guess is that he is looking
at demographics. The working age
population in the United States (age
15-64) has been growing at about 0.5%
per year. But labor force participation
has grown over time since World War II,
and later cohorts have higher labor
force participation rates. For example,
the labor force participation rate of
baby-boomers in prime working age was
higher than the participation rate of
the previous generation in prime working
age. So, this would cause employment
growth to be higher than population
growth. That is, Narayana's assumptions
imply employment growth of about 0.8%
per year, which seems as good a number
as any. Thus, the long-run growth path
for the economy should exhibit a growth
rate of about 0.8% per year - though
there is considerable uncertainty about
that estimate.
But, we measure employment in more than
one way. This chart shows year-over-year
employment growth from the establishment
survey, and from the household survey
(CPS):
For the last couple of years, employment
growth has been falling on trend, by
both measures. But currently,
establishment-survey employment is
growing at 1.6% per year, and household
survey employment is growing at 1.0% per
year. The latter number is a lot closer
to 0.8%. The establishment survey is
what it says - a survey of
establishments. The household survey is
a survey of people. The advantages of
the establishment survey are that it
covers a significant fraction of all
establishments, and reporting errors are
less likely - firms generally have a
good idea how many people are on their
payrolls. But, the household survey has
broader coverage (includes the
self-employed for example) of the
population, and it's collected in a
manner consistent with the unemployment
and labor force participation data -
that's all from the same survey. There's
greater potential for measurement error
in the household survey, as people can
be confused by the questions they're
asked. You can see that in the noise in
the growth rate data in the chart.
Here's another interesting detail:
This chart looks at the ratio of
household-survey employment to
establishment-survey employment. Over
long periods of time, these two measures
don't grow at the same rate, due to
changes over time in the fraction of
workers who are in establishments vs.
those who are not. For long-run
employment growth rates, you should put
more weight on the household survey
number (as this is a survey of the whole
working-age population), provided of
course that some measurement bias isn't
creeping into the household survey
numbers over time. Note that, since the
recession, establishment-survey
employment has been growing at a
significantly higher rate than
household-survey employment.
So, I think that the conclusion is that
we should temper our view of employment
growth. Maybe it's much closer to a
steady state rate than Narayana thinks.
But, on to some other measures of labor
market performance. This chart shows the
labor force participation rate (LFPR)
and the employment-population ratio
(EPOP).
Here, focus on the last year. LFPR is
little changed, increasing from 62.9% to
63.0%, and the same is true for EPOP,
which increased from 59.8% to 60.0%.
That looks like a labor market that has
settled down, or is close to it.
A standard measure of labor market
tightness that labor economists like to
look at is the ratio of job vacancies to
unemployment, here measured as the ratio
of the job openings rate to the
unemployment rate:
So, by this measure the labor market is
at its tightest since 2001. Job openings
are plentiful relative to would-be
workers.
People who want to argue that some slack
remains in the labor market will
sometimes emphasize unconventional
measures of the unemployment rate:
In the chart, U3 is the conventional
unemployment rate, and U6 includes
marginally attached workers (those not
in the labor force who may be receptive
to working) and those employed part-time
for economic reasons. The U3 measure is
not so far, at 4.7%, from its previous
trough of 4.4% in March 2007, while the
gap between current U6, at 9.2% and its
previous trough, at 7.9% in December
2006, is larger. Two caveats here: (i)
How seriously we want to take U6 as a
measure of unemployment is an open
question. There are problems even with
conventional unemployment measures, in
that we do not measure the intensity of
search - one person's unemployment is
different from another's - and survey
participants' understanding of the
questions they are asked is problematic.
The first issue is no worse a problem
for U6 than for U3, but the second issue
is assuredly worse. For example, it's
not clear what "employed part time for
economic reasons" means to the survey
respondent, or what it should mean to
the average economist. Active search, as
measured in U3, has a clearer meaning
from an economic point of view, than an
expressed desire for something one does
not have - non-satiation is ubiquitous
in economic systems, and removing it is
just not feasible. (ii) What's a normal
level for U6? Maybe the U6 measure in
December 2006 was undesirably low, due
to what was going on in housing and
mortgage markets.
Another labor market measure that might
be interpreted as indicating labor
market slack is long term unemployment
(unemployed 27 weeks or more) - here
measured as a rate relative to the labor
force:
This measure is still somewhat elevated
relative to pre-recession times.
However, if we look at short term
unemployment (5 weeks or less), this is
unusually low:
As well, the insured unemployment rate
(those receiving unemployment insurance
as a percentage of the labor force) is
very low:
To collect UI requires having worked
recently, so this reflects the fact that
few people are being laid off -
transitions from employment to
unemployment are low.
An interpretation of what is going on
here is that the short-term and
long-term unemployed are very different
kinds of workers. In particular, they
have different skills. Some skills are
in high demand, others are not, and
those who have been unemployed a long
time have skills that are in low demand.
A high level of long-term unemployed is
consistent with elevated readings for U6
- people may be marginally attached or
wanting to move from part-time to
full-time work for the same reasons that
people have been unemployed for a long
time. What's going on may indicate a
need for a policy response, but if the
problem is skill mismatch, that's not a
problem that has a monetary policy
solution.
So, if the case someone wants to make is
that the Fed should postpone interest
rate increases because we are below full
employment - that there is still slack
in the labor market - then I think
that's a very difficult case to make. We
could argue all day about what an output
gap is, whether this is something we
should worry about, and whether monetary
policy can do much about an output gap,
but by conventional measures we don't
seem to have one in the US at the
current time. In terms of raw economic
performance (price stability aside),
there's not much for the Fed to do at
the current time. Productivity growth is
unusually low, as is real GDP growth,
but if that's a policy problem, it's in
the fiscal department, not the monetary
department.
But there is more to Narayana's views
than the state of the labor market. He
thinks it's important that inflation is
still below the Fed's target of 2%.
Actually, headline PCE inflation, which
is the measure specified in the Fed's
longer-run goals statement,
is
essentially at the target, at 1.9%. I
think what Narayana means is that, given
his Phillips-curve view of the world, if
we are close to full employment,
inflation should be higher. In fact, the
long-run Fisher effect tells us that,
after an extended period of low nominal
interest rates, the inflation rate
should be low. Thus, one might actually
be puzzled as to why the inflation rate
is so high. We know something about
this, though. Worldwide, real rates of
interest on government debt have been
unusually low, which implies that, given
the nominal interest rate, inflation
will be unusually high. But, this makes
Narayana's policy conclusion close to
being correct. The Fed is very close to
its targets - both legs of the dual
mandate - so why do anything?
A neo-Fisherian view says that we should
increase (decrease) the central bank's
nominal interest rate target when
inflation is too low (high) - the
reverse of conventional wisdom. But
maybe inflation is somewhat elevated by
increases in the price of crude oil,
which have since somewhat reversed
themselves. So, maybe the Fed's nominal
interest rate target should go up a bit
more, to achieve its 2% inflation target
consistently.
Though Narayana's reasoning doesn't lead
him in a crazy policy direction, it
would do him good to ditch the Phillips
curve reasoning - I don't think that's
ever been useful for policy. If one had
(I think mistakenly) taken Friedman to
heart (as appears to be the case with
Narayana), we might think that
unemployment above the "natural rate"
should lead to falling inflation, and
unemployment below the natural rate
should lead to rising inflation. But,
that's not what we see in the data.
Here, I use the CBO's measure of the
natural rate of unemployment (quarterly
data, 1990-2016):
According to standard Friedman
Phillips-curve logic, we should see a
negative correlation in the chart, but
the correlation is essentially zero.
One thing I wonder
about is the
possibility that
policy implementing
economists are a bit
insulated from
reality. It seems
possible their
personal experiences
might reinforce a
feeling that
everything is all
right.
Meanwhile
countervailing data
may subconsciously be
given short shrift. A
shrinking middle
class, stagnant wages,
declining labor force
participation of adult
males all seem
ignored.
Could it be argued
that full employment
is characterized by a
robust and growing
middle class?
Economics is both a
hard and social
science and social
criteria may belong in
the definition of full
employment.
Is it wise to try to
throttle growth as
soon as policy
mandates are achieved,
thus seeking to
maintain a virtuous
steady state
equilibrium? Might it
not be better to
attempt more of a sine
wave economic policy,
deliberately
overshooting targets
to bring the marginal
sidelined workers into
the economy where they
can gain experience
and then, if
necessary, briefly
overshooting
constraining measures
to quickly contain
possible excesses?
"... And all costs are labor costs. It it isn't labor cost, it's rents and economic profit which mean economic inefficiency. An inefficient economy is unstable. Likely to crash or drive revolution. ..."
"... Free lunch economics seeks to make labor unnecessary or irrelevant. Labor cost is pure liability. ..."
"... Yet all the cash for consumption is labor cost, so if labor cost is a liability, then demand is a liability. ..."
"... Replace workers with robots, then robots must become consumers. ..."
"... "Replace workers with robots, then robots must become consumers." Well no - the OWNERS of robots must become consumers. ..."
"... I am old enough to remember the days of good public libraries, free university education, free bus passes for seniors and low land prices. Is the income side of the equation all that counts? ..."
Robots and Inequality: A Skeptic's Take : Paul Krugman presents "
Robot Geometry " based on
Ryan Avent 's "Productivity Paradox". It's more-or-less the skill-biased technological change
hypothesis, repackaged. Technology makes workers more productive, which reduces demand for workers,
as their effective supply increases. Workers still need to work, with a bad safety net, so they
end up moving to low-productivity sectors with lower wages. Meanwhile, the low wages in these
sectors makes it inefficient to invest in new technology.
My question: Are Reagan-Thatcher countries the only ones with robots? My image, perhaps it is
wrong, is that plenty of robots operate in
Japan and
Germany too, and both
countries are roughly just as technologically advanced as the US. But Japan and Germany haven't
seen the same increase in inequality as the US and other Anglo countries after 1980 (graphs below).
What can explain the dramatic differences in inequality across countries? Fairly blunt changes
in labor market institutions, that's what. This goes back to Peter Temin's "
Treaty of
Detroit " paper and the oddly ignored series of papers by
Piketty, Saez and coauthors which argues that changes in top marginal tax rates can largely
explain the evolution of the Top 1% share of income across countries. (Actually, it goes back
further -- people who work in Public Economics had "always" known that pre-tax income is sensitive
to tax rates...) They also show that the story of inequality is really a story of incomes at the
very top -- changes in other parts of the income distribution are far less dramatic. This evidence
also is not suggestive of a story in which inequality is about the returns to skills, or computer
usage, or the rise of trade with China. ...
Yet another economist bamboozled by free lunch economics.
In free lunch economics, you never consider demand impacted by labor cost changed.
TANSTAAFL so, cut labor costs and consumption must be cut.
Funny things can be done if money is printed and helicopter dropped unequally.
Printed money can accumulate in the hands of the rentier cutting labor costs and pocketing
the savings without cutting prices.
Free lunch economics invented the idea price equals cost, but that is grossly distorting.
And all costs are labor costs. It it isn't labor cost, it's rents and economic profit which
mean economic inefficiency. An inefficient economy is unstable. Likely to crash or drive revolution.
Free lunch economics seeks to make labor unnecessary or irrelevant. Labor cost is pure
liability.
Yet all the cash for consumption is labor cost, so if labor cost is a liability, then demand
is a liability.
Replace workers with robots, then robots must become consumers.
I am old enough to remember the days of good public libraries, free university education,
free bus passes for seniors and low land prices. Is the income side of the equation all that counts?
People are worried about robots taking jobs. Driverless cars are around the corner. Restaurants
and shops increasingly carry the option to order by touchscreen. Google's clever algorithms provide
instant translations that are remarkably good.
But the economy does not feel like one undergoing a technology-driven productivity boom. In
the late 1990s, tech optimism was everywhere. At the same time, wages and productivity were rocketing
upward. The situation now is completely different. The most recent jobs reports in America and
Britain tell the tale. Employment is growing, month after month after month. But wage growth is
abysmal. So is productivity growth: not surprising in economies where there are lots of people
on the job working for low pay.
The obvious conclusion, the one lots of people are drawing, is that the robot threat is totally
overblown: the fantasy, perhaps, of a bubble-mad Silicon Valley - or an effort to distract from
workers' real problems, trade and excessive corporate power. Generally speaking, the problem is
not that we've got too much amazing new technology but too little.
This is not a strawman of my own invention. Robert Gordon makes this case. You can see Matt
Yglesias make it here. * Duncan Weldon, for his part, writes: **
"We are debating a problem we don't have, rather than facing a real crisis that is the polar
opposite. Productivity growth has slowed to a crawl over the last 15 or so years, business investment
has fallen and wage growth has been weak. If the robot revolution truly was under way, we would
see surging capital expenditure and soaring productivity. Right now, that would be a nice 'problem'
to have. Instead we have the reality of weak growth and stagnant pay. The real and pressing concern
when it comes to the jobs market and automation is that the robots aren't taking our jobs fast
enough."
And in a recent blog post Paul Krugman concluded: *
"I'd note, however, that it remains peculiar how we're simultaneously worrying that robots
will take all our jobs and bemoaning the stalling out of productivity growth. What is the story,
really?"
What is the story, indeed. Let me see if I can tell one. Last fall I published a book: "The
Wealth of Humans". In it I set out how rapid technological progress can coincide with lousy growth
in pay and productivity. Start with this:
"Low labour costs discourage investments in labour-saving technology, potentially reducing
productivity growth."
This is an old concern in economics; it's "capital-biased technological change," which tends to
shift the distribution of income away from workers to the owners of capital....
Catherine Rampell and Nick Wingfield write about the growing evidence * for "reshoring" of
manufacturing to the United States. * They cite several reasons: rising wages in Asia; lower energy
costs here; higher transportation costs. In a followup piece, ** however, Rampell cites another
factor: robots.
"The most valuable part of each computer, a motherboard loaded with microprocessors and memory,
is already largely made with robots, according to my colleague Quentin Hardy. People do things
like fitting in batteries and snapping on screens.
"As more robots are built, largely by other robots, 'assembly can be done here as well as anywhere
else,' said Rob Enderle, an analyst based in San Jose, California, who has been following the
computer electronics industry for a quarter-century. 'That will replace most of the workers, though
you will need a few people to manage the robots.' "
Robots mean that labor costs don't matter much, so you might as well locate in advanced countries
with large markets and good infrastructure (which may soon not include us, but that's another
issue). On the other hand, it's not good news for workers!
This is an old concern in economics; it's "capital-biased technological change," which tends
to shift the distribution of income away from workers to the owners of capital.
Twenty years ago, when I was writing about globalization and inequality, capital bias didn't
look like a big issue; the major changes in income distribution had been among workers (when you
include hedge fund managers and CEOs among the workers), rather than between labor and capital.
So the academic literature focused almost exclusively on "skill bias", supposedly explaining the
rising college premium.
But the college premium hasn't risen for a while. What has happened, on the other hand, is
a notable shift in income away from labor:
[Graph]
If this is the wave of the future, it makes nonsense of just about all the conventional wisdom
on reducing inequality. Better education won't do much to reduce inequality if the big rewards
simply go to those with the most assets. Creating an "opportunity society," or whatever it is
the likes of Paul Ryan etc. are selling this week, won't do much if the most important asset you
can have in life is, well, lots of assets inherited from your parents. And so on.
I think our eyes have been averted from the capital/labor dimension of inequality, for several
reasons. It didn't seem crucial back in the 1990s, and not enough people (me included!) have looked
up to notice that things have changed. It has echoes of old-fashioned Marxism - which shouldn't
be a reason to ignore facts, but too often is. And it has really uncomfortable implications.
But I think we'd better start paying attention to those implications.
"The most valuable part of each computer, a motherboard loaded with microprocessors and memory,
is already largely made with robots, according to my colleague Quentin Hardy. People do things
like fitting in batteries and snapping on screens.
"...already largely made..."? already? circuit boards were almost entirely populated by machines
by 1985, and after the rise of surface mount technology you could drop the "almost". in 1990 a
single machine could place 40k+/hour parts small enough they were hard to pick up with fingers.
And now for something completely different. Ryan Avent has a nice summary * of the argument
in his recent book, trying to explain how dramatic technological change can go along with stagnant
real wages and slowish productivity growth. As I understand it, he's arguing that the big tech
changes are happening in a limited sector of the economy, and are driving workers into lower-wage
and lower-productivity occupations.
But I have to admit that I was having a bit of a hard time wrapping my mind around exactly
what he's saying, or how to picture this in terms of standard economic frameworks. So I found
myself wanting to see how much of his story could be captured in a small general equilibrium model
- basically the kind of model I learned many years ago when studying the old trade theory.
Actually, my sense is that this kind of analysis is a bit of a lost art. There was a time when
most of trade theory revolved around diagrams illustrating two-country, two-good, two-factor models;
these days, not so much. And it's true that little models can be misleading, and geometric reasoning
can suck you in way too much. It's also true, however, that this style of modeling can help a
lot in thinking through how the pieces of an economy fit together, in ways that algebra or verbal
storytelling can't.
So, an exercise in either clarification or nostalgia - not sure which - using a framework that
is basically the Lerner diagram, ** adapted to a different issue.
Imagine an economy that produces only one good, but can do so using two techniques, A and B,
one capital-intensive, one labor-intensive. I represent these techniques in Figure 1 by showing
their unit input coefficients:
[Figure 1]
Here AB is the economy's unit isoquant, the various combinations of K and L it can use to produce
one unit of output. E is the economy's factor endowment; as long as the aggregate ratio of K to
L is between the factor intensities of the two techniques, both will be used. In that case, the
wage-rental ratio will be the slope of the line AB.
Wait, there's more. Since any point on the line passing through A and B has the same value,
the place where it hits the horizontal axis is the amount of labor it takes to buy one unit of
output, the inverse of the real wage rate. And total output is the ratio of the distance along
the ray to E divided by the distance to AB, so that distance is 1/GDP.
You can also derive the allocation of resources between A and B; not to clutter up the diagram
even further, I show this in Figure 2, which uses the K/L ratios of the two techniques and the
overall endowment E:
[Figure 2]
Now, Avent's story. I think it can be represented as technical progress in A, perhaps also
making A even more capital-intensive. So this would amount to a movement southwest to a point
like A' in Figure 3:
[Figure 3]
We can see right away that this will lead to a fall in the real wage, because 1/w must rise.
GDP and hence productivity does rise, but maybe not by much if the economy was mostly using the
labor-intensive technique.
And what about allocation of labor between sectors? We can see this in Figure 4, where capital-using
technical progress in A actually leads to a higher share of the work force being employed in labor-intensive
B:
[Figure 4]
So yes, it is possible for a simple general equilibrium analysis to capture a lot of what Avent
is saying. That does not, of course, mean that he's empirically right. And there are other things
in his argument, such as hypothesized effects on the direction of innovation, that aren't in here.
But I, at least, find this way of looking at it somewhat clarifying - which, to be honest,
may say more about my weirdness and intellectual age than it does about the subject.
I think this illustrates my point very clearly. If you had charts of wealth by age it would be
even clearer. Without a knowledge of the discounted expected value of public pensions it is hard
to draw any conclusions from this list.
I know very definitely that in Australia and the UK people are very reliant on superannuation
and housing assets. In both Australia and the UK it is common to sell expensive housing in the
capital and move to cheaper coastal locations upon retirement, investing the capital to provide
retirement income. Hence a larger median wealth is NEEDED.
It is hard otherwise to explain the much higher median wealth in Australia and the UK.
Ryan Avent's analysis demonstrates what is wrong with the libertarian, right wing belief that
cheap labor is the answer to every problem when in truth cheap labor is the source of many of
our problems.
Spencer,
as I have said before, I don't really care to much what wages are - I care about income. It is
low income that is the problem. I'm a UBI guy, if money is spread around, and workers can say
no to exploitation, low wages will not be a problem.
Have we not seen a massive shift in pretax income distribution? Yes ... which tells me that
changes in tax rate structures are not the only culprit. Though they are an important culprit.
Maybe - but
1. changes in taxes can affect incentives (especially think of real investment and corporate taxes
and also personal income taxes and executive remuneration);
2. changes in the distribution of purchasing power can effect the way growth in the economy occurs;
3. changes in taxes also affect government spending and government spending tends to be more progressively
distributed than private income.
Composite Services labor hours increase with poor productivity growth - output per hour of
labor input. Composite measure of service industry output is notoriously problematic (per BLS
BEA).
Goods labor hours decrease with increasing productivity growth. Goods output per hour easy
to measure and with the greatest experience and knowledge.
Put this together and composite national productivity growth rate can't grow as fast as services
consume more of labor hours.
Simple arithmetic.
Elaboration on Services productivity measures:
How do you measure a retail clerks unit output?
How do you measure an engineer's unit output?
How do equilibrate retail clerk output with engineer's outuput for a composite output?
Now add the composite retail clerk labor hours to engineering labor hours... which dominates in
composite labor hours? Duh! So even in services the productivity is weighted heavily to the lowest
productivity job market.
Substitute Hospitality services for Retail Clerk services. Substitute truck drivers services
for Hospitality Services, etc., etc., etc.
I have spent years tracking productivity in goods production of various types ... mining, non-tech
hardware production, high tech hardware production in various sectors of high tech. The present
rates of productivity growth continue to climb (never decline) relative to the past rates in each
goods production sector measured by themselves.
But the proportion of hours in goods production in U.S. is and has been in continual decline
even while value of output has increased in each sector of goods production.
Here's an interesting way to start thinking about Services productivity.
There used to be reasonably large services sector in leisure and business travel agents. Now
there is nearly none... this has been replaced by on-line computer based booking. So travel agent
or equivalent labor hours is now near zippo. Productivity of travel agents went through the roof
in the 1990's & 2000's as the number of people / labor hours dropped like a rock. Where did those
labor hours end up? They went to lower paying services or left the labor market entirely. So lower
paying lower productivity services increased as a proportion of all services, which in composite
reduced total serviced productivity.
You can do the same analysis for hundreds of service jobs that no longer even exist at all
--- switch board operators for example when the way of buggy whip makers and horse-shoe services).
Now take a little ride into the future... not to distant future. When autonomous vehicles become
the norm or even a large proportion of vehicles, and commercial drivers (taxi's, trucking, delivery
services) go the way of horse-shoe services the labor hours for those services (land transportation
of goods & people) will drop precipitously, even as unit deliveries increase, productivity goes
through the roof, but since there's almost no labor hours in that service the composite effect
on productivity in services will drop because the displaced labor hours will end up in a lower
productivity services sector or out of the elabor market entirely.
Economists are having problems reconciling composite productivity growth rates with increasing
rates of automation. So they end up saying "no evidence" of automation taking jobs or something
to the effect "not to fear, robotics isn't evident as a problem we have to worry about".
But they know by observation all around them that automation is increasing productivity in
the goods sector, so they can't really discount automation as an issue without shutting their
eyes to everything they see with their "lying eyes". Thus they know deep down that they will have
to be reconcile this with BLS and BEA measures.
Ten years aog this wasn't even on economist's radars. Today it's at least being looked into
with more serious effort.
Ten years ago politicians weren't even aware of the possibility of any issues with increasing
rates of automation... they thought it's always increased with increasing labor demand and growth,
so why would that ever change? Ten years ago they concluded it couldn't without even thinking
about it for a moment. Today it's on their radar at least as something that bears perhaps a little
more thought.
Not to worry though... in ten more years they'll either have real reason to worry staring them
in the face, or they'll have figured out why they were so blind before.
Reminds me of not recognizing the "shadow banking" enterprises that they didn't see either
until after the fact.
Or that they thought the risk rating agencies were providing independent and valid risk analysis
so the economists couldn't reconcile the "low level" of market risks risk with everything else
so they just assumed "everything" else was really ok too... must be "irrational exuberance" that's
to blame.
Let me add that the term "robotics" is a subset of automation. The major distinction is only that
a form of automation that includes some type of 'articulation' and/or some type of dynamic decision
making on the fly (computational branching decision making in nano second speeds) is termed 'robotics'
because articulation and dynamic decision making are associated with human capabilities rather
then automatic machines.
It makes no difference whether productivity gains occur by an articulated machine or one that
isn't... automation just means replacing people's labor with something that improves humans capacity
to produce an output.
When mechanical leverage was invented 3000 or more years ago it was a form of automation, enabling
humans to lift, move heavier objects with less human effort (less human energy).
"the U.S. middle class - with household incomes ranging from two-thirds to double the national
median"
Median household income in the US in 2015 was less the $60K. Two-thirds is $40K. That's almost
poverty not middle class.
Sociologically the middle class is a quasi-elite of professionals and managers, who are largely
immune to economic downturns and trends such as out-sourcing.
The definition game? Define something to something else as is being talked about and then claim,
claims based on a completely different definition are false?
Actually with the change in ratio professionals and managers now tend to upper middle class, (29%
of us is upper middle now, 32% middle).
One of the influences is that post WWII it was possible to be middle class and work on an assembly
line in a job that was described as check your brain at the door. Automation and process changes
have wiped the high pay of such jobs out. Steel makers for example thru mainly process changes
(electric furnaces using scrap, continuous casting and the like) mean that it takes 1/5 the hours
to produce a ton of steel in did in the 1970s.
The movement of assembly line jobs to the middle class occured because there was a period where
the US was much less involved with the rest of the world economically, because their industries
had all been destroyed. The change started during the Johnson admin, and showed up in the high
inflation of the Nixon admin.
Most "professionals and managers" are nowhere near being immune to downturns and outsourcing,
in aggregate.
You could likewise claim that "low skilled" or any other occupations are "immune" as somewhere
around 70-80% of their members continue being employed through tough times, in aggregate.
If you take "tech", companies laying off around 5-10% or even more of their staff in busts
is a frequent enough occurrence. And that's in addition to the "regular" age discrimination and
cycling of workers justified with "outdated skills". Being young and (supposedly) impressionable
is a skill!
"the U.S. middle class - with household incomes ranging from two-thirds to double the national
median"
That's almost tautological. By definition, there can't be a whole lot of change in the population
of groups defined relative to median. Income and wealth of those groups, though, can be enlightening.
Substitute "mean" for "median" and watch what happens. When inequality is driven by extremes
at the tail, using "median" means that you don't see much change in the demographics. (Hint: if
"middle class" is defined as half to twice the average income, there are damned few in that bracket.)
"It can
do so by increasing the federal minimum wage to $10 per hour
and indexing it to inflation. The best existing research
suggests that modest increases such as this have had little
or no employment-reducing impact. And the government should
also increase the Earned Income Tax Credit, a refundable tax
credit for workers, for people who don't have children (a
strategy Brooks endorses)."
Here we go again. First, I thought we had left EITC behind
as any kind of substantial answer to underpaid Americans:
redistributing all of 1/2 of one percent of overall income
when 45% of our workforce is earning less than what we think
the minimum wage should be, $15 an hour.
$15 may be the most fast food can pay. Sometimes in
McDonald's there are more people behind the counter than in
front (most customers come through the drive through). If
fast food (33% labor costs) can pay $15, then maybe Target
(10%-15%) can pay $20, and maybe super efficient WalMart (7%)
can pay $25.
Always keeping in mind that labor bought and sold sort of
on margin. Doubling Walmart's pay could add only 7% to
prices.
Bottom 45% of workforce now takes 10% share of overall
income -- used to be 20%. Top 1% now 20% instead of 10%. How
to get that 10% back -- how to supply the economic and
political muscle to TAKE IT BACK: just put some teeth in the
(federal) law that already says union busting is illegal.
States can do this without any fear of confronting federal
preemption. States can make it a crime for wholesalers for
instance to pressure individual retailers from combining
their bargaining power -- same such law can overlap federal
labor area; especially since fed left blank for 80 years.
Blank or not: may overlap as with min wage.
No need for complicated policy researches; no need to
spend a dime: states just make union busting a felony and let
people organize if they wish to -- and get out of their way.
:-)
Back to min wage. If you sell fewer labor hours for more
dollars that works out better for labor than for potatoes --
because in the labor market the potatoes get the money to
spend -- and they are more likely to spend it more on other
potatoes than more upscale. Why min wage raises often
followed by higher min wage employment. (Higher wage jobs
lost -- everybody looking in wrong place.)
Re: The Man Who Made Us See That Trade Isn't Always Free -
Noah Smith
"Instead, he and his co-authors found that trade
with China in the 2000s left huge swathes of the U.S.
workforce permanently without good jobs -- or, in many cases,
jobs at all.
"This sort of concentrated economic devastation sounds
like it would hurt not just people's pocketbooks, but the
social fabric. In a series of follow-up papers, Autor and his
team link Chinese import competition to declining marriage
rates and political polarization. Autor told me that these
social ills make the need for new thinking about trade policy
even more urgent."
Here we go again. US manufacturing going from 16% of
employment from 2000 to 12% in 2016 (half due automation)
nowhere near as sucking-all-the-oxygen-out-of-life as the the
bottom 45% of earners taking 10% of overall income, down from
20% over two generations -- more and more being recognized
due to the loss of collective bargaining power ...
... for which loss the usual litany of causatives NEVER
seem to include one mention of the complete lack of teeth
protecting union organizing from market power in US labor
law.
Simple answer: no studies or research needed, not a dollar
appropriated: simply make union busting a felony at state
level -- and get out of people's way.
States can do this without conflict with federal
preemption. States can make it a crime for wholesalers for
instance to pressure individual retailers from combining
their bargaining power -- same such law can overlap federal
labor area; especially since fed left blank for 80 years.
Blank or not: may overlap as with min wage.
Don't do this and you'll never bring back collective
bargaining power -- and all the genuine populist politics
that goes with it!
"This is how much it costs 'Meals on Wheels' to feed one elderly person for a year"
By Quentin Fottrell, Personal Finance Editor...Mar 16, 2017...1:01 p.m. ET
"Among the services that could be impacted under President Trump's budget proposals: Meals on
Wheels.
The administration's cuts target the Department of Housing and Urban Development and call for
the elimination of the $3 billion Community Development Block Grant, which helps fund programs including
Meals on Wheels services, which deliver food (and human interaction) to elderly, disabled and poor
recipients. "The federal government has spent over $150 billion on this block grant since its inception
in 1974, but the program is not well-targeted to the poorest populations and has not demonstrated
results," the budget proposal states. "The budget devolves community and economic development activities
to the state and local level, and redirects federal resources to other activities."
"Meals on Wheels America," one such national meal delivery program, says the organization can
provide meals for senior citizens for one year for roughly the same cost as just one day in a hospital.
The annual meal cost is $2,765 for 250 days, while the cost of one day in the hospital is around
$2,271, according to the Henry J. Kaiser Family Foundation, a nonprofit, private operating foundation
based in Menlo Park, Calif. For "Meals on Wheels People," a Portland, Ore.-based service and one
of the largest in the country, says it costs us around $2,500 annually to provide daily meals to
a homebound senior, while cost of institutional care for a year in Oregon is around $60,000."...
"Ultra-rich protect wealth with spread
of 'family offices'"
Not really a new idea. The Rockefeller Family and one or two others had these
from early days of American Dynastic Wealth, however, what is new is the number of wealthy and the
amount of wealth they control, not only within a nation but Globally which makes them a new threat
to global prosperity and equality - iow, they won't share theirs willingly and must be forced to
pay up, the Anti-Trump way.
"Ultra-rich protect wealth with spread of 'family offices'"
By Sean Coughlan, Education correspondent...BBC...16 March 2017
"The ultra-rich in London are increasingly protecting their wealth through the use of "family
offices", says research from the London School of Economics.
These are teams of professionals - such as lawyers, financiers and psychologists - employed to
ensure the "dynastic wealth" of the super-rich.
These offices work for families worth at least £200m, says the study.
Researcher Luna Glucksberg says their role "demands scrutiny".
The study, from the LSE's International Inequalities Institute, says more attention should be
paid to the rise of such "shadowy" family offices, which are employed full-time to protect the interests
of their "elite families".
The study describes how they support a "bunkered" and "fortified" way of life of the "global super-rich".
Family offices have grown alongside the concentrations of the ultra-rich in cities such as London
- and researchers say they have moved on a step from buying in specialist advisers.
These are full-time professional staff, which could include investment experts, property advisers,
economists, trust fund advisers and lawyers, who work for a single family, in the way that a corporation
might have its own dedicated staff.
The study quotes a US report from 2010 that found that 50 of the wealthiest such family offices
were looking after $500bn (£407bn).
Rather than getting external advice from bankers and financiers, these family offices will keep
such information private and in-house.
Their role "goes far beyond that of private bankers", says Dr Glucksberg.
"They are about creating dynasties, ensuring generational transfers of wealth," she says.
As well as maximising financial interests and investments, such family offices can look after
every aspect of the private lives of their employers.
This can be everything from buying clothes and organising holidays to arranging divorces and making
financial arrangements to prevent money being lost to in-laws.
The study says that for an individual family to have a family office, they would need to be worth
at least £200m and probably much more.
But there are cases of "multi-family offices" - where families worth from £80m upwards could share
such services.
The growth of extreme wealth, alongside poverty and low-income families, means that there needs
to be more analysis of how such wealth is perpetuated, the study suggests.
These family offices "play a crucial role" in how advantages are handed on between generations,
with full-time staff able to make long-term, strategic planning, says the study.
"The rise of elite dynasties, economic inequality, and the vast concentrations of global wealth
in recent times means that the role of the 'family office' in our society demands scrutiny," says
Dr Glucksberg."
Longtooth :
March 16, 2017 at 08:08 PM
While I think primary education especially has suffered
tremendously in the US, education is a terribly necessary but
far from sufficient solution to the problems.
The far
greater problem, imo, is the distribution of incomes which
create the divergences in primary & secondary education..
which is a direct outgrowth of educational funding by school
districts, which is differentiated by the tax base, which of
course then determines the quality of the education. Add this
to poorer lower and lower middle class neighborhoods where
both parents work (mostly) in low wage and low benefits jobs
and the environment rubs off directly on the kids.
Why do we promote divergence in neighborhood wealth? This
is a direct result of and part of income inequality so it's
not just the 1% that are the problem.. they're just a popular
and clear-cut indicator of it. We create these ghetto-like
islands by a political and belief system that promotes
"individualism", that believes if you've got a good high
paying job that it's because you "earned it" yourself and
therefore "deserve it".
Education will not solve the upward mobility issue we now
have in spades and which spirals to less mobility by
feed-back loops.
"... Tax cuts kill jobs. Plain and simple. You can't create jobs by cutting the amount you paid workers. Taxes are prices that workers .pay You dodge taxes by underpaying workers. If taxes are cut, both paying workers is cut AND paying workers to dodge taxes is cut. ..."
Forecasting is done to change human behavior to invalidate
the forecasts.
Thus forecasts are by design never accurate
about the future.
This is different than designing systems using natural
laws.
A plane is designed to fly, because every forecast for it
crashing has resulted in design changes to invalidate that
forecast.
Conservatives hate forecasts because they hate changing
their plans. To forecast slower gdp growth and job creation,
or even contraction from tax cuts and spending cuts is
unacceptable. Thus they strive to change forecasts or
discredit them to get their policy implemented.
My forecast in the late 90s and early 00s was for economic
disaster as a result of conservative policy eventually being
implemented.
Tax cuts kill jobs. Plain and simple. You can't create
jobs by cutting the amount you paid workers. Taxes are prices
that workers .pay You dodge taxes by underpaying workers. If taxes
are cut, both paying workers is cut AND paying workers to
dodge taxes is cut.
That would have been the forecast in the 60s.
Today even Krugman and Bernie support job killing tax cuts
based on that creating jobs. Lots of bad forecasting is done
to back tax cuts. The tax cuts fail to create jobs, so the
bad forecasts are blamed so every forecast is ignored, even
the good ones.
When Congressional critters learned to read,
45th POTUS was suddenly and permanently unable to drain the
swamp of critters who grow fat on the pork-barrel-legislation
that drains the public treasure of We the Workers and Savers.
These parasitic critters will grow fat and strong, strong
enough to gobble up the the once brave workers who feed the
fat in DC.
Median household income in the USA in 2015 was $ 53,889. Census money
income
is defined as
income
received on a regular basis before
payments for taxes, social security, etc. and does not reflect noncash
benefits....
Consider: In 1971, the U.S. middle class - with household incomes
ranging from two-thirds to double the national median - accounted for
almost 60 percent of total U.S. earnings. But in 2014, middle-class
households earned just about 40 percent of the total national income.
And, adjusted for inflation, the incomes of goods-producing workers
have been flat since the mid-1970s.
"We have a fractured society," says MIT economist Peter Temin. "The
middle class is vanishing."
Now Temin, the Elisha Gray II Professor Emeritus of Economics in MIT's
Department of Economics, has written a book exploring the topic. "The
Vanishing Middle Class: Prejudice and Power in a Dual Economy,"
published this month by MIT Press, examines the plight of
middle-income earners and offers some prescriptions for changing our
current state of affairs.
The "dual economy" in the book's title also represents a bracing
reflection of America's class schism. Temin, a leading economic
historian, draws the term from the work of Nobel Prize winner W.
Arthur Lewis, who in the 1950s applied the model of a dual economy to
developing countries. In many of those nations, Lewis contended, there
was not a single economy but a two-track economy, with one part
containing upwardly-mobile, skilled workers and the other part
inhabited by subsistence workers.
Applied to the U.S. today, "The Lewis model actually works," Temin
says. "The economy can grow, but it detaches from the [subsistence]
sector. Simple as it is, the Lewis model offers the benefit that a
good economic model does, which is to clarify your thinking."
In Temin's terms, updated, America now features what he calls the "FTE
sector" - people who work in finance, technology, and electronics -
and "the low-wage sector." Workers in the first sector tend to thrive;
workers in the second sector usually struggle. Much of the book delves
into how the U.S. has developed this way over the last 40 years, and
how it might transform itself back into a country with one economy for
all.
Headwinds for workers
As Temin sees it, there are multiple reasons for the decline in
middle-class earning power. To cite one: The decline of unionization,
he contends, has reduced the bargaining power available to middle
class workers.
"In the [political and economic] turmoil of the '70s and '80s, the
unions declined, and the institutions that had been keeping labor
going along with rising productivity were destroyed," Temin says.
"It's partly [due to] new technology, globalization, and public policy
- it's all of these things. What it did was disconnect wages from the
growth in productivity."
Indeed, from about 1945 until 1975, as Temin documents in the book,
U.S. productivity gains and the wage gains of goods-producing workers
tracked each other closely. But since 1975, productivity has roughly
doubled, while those wages have stayed flat.
Where "The Vanishing Middle Class" moves well beyond a discussion of
basic economic relations, however, is in Temin's insistence that
readers consider the interaction of racial politics and economics. As
he puts it in the book, "Race plays an important part in discussions
of politics related to inequality in the United States."
To take one example: Again starting in the 1970s, incarceration
policies led to an increasing proportion of African-Americans being
jailed. Today, Temin notes, about one in three African-American men
will serve jail time, which he calls "a very striking figure. You can
see how that would just destroy the fabric of a community." After all,
those who become imprisoned see a significant reduction in their
ability to obtain healthy incomes over their lifetimes.
For that matter, Temin observes, incarceration has expanded so
dramatically it has affected the ability of society to pay for
prisons, which may be a factor that limits their further growth. At
the moment, he notes in the book, the U.S. states pay roughly $50
billion a year for prisons and roughly $75 billion annually to support
higher education.
Solutions?
Temin contends in the book that a renewed focus on education is a
principal way to distribute opportunities better throughout society.
"The link between the two parts of the modern dual economy is
education, which provides a possible path that children of low-wage
workers can take to move into the FTE sector," Temin writes.
That begins with early-childhood education, which Temin calls
"critically important" - although, he says, "in order to continue
those benefits, [students] have to build on that foundation. That goes
all the way up to college."
And for students in challenging social and economic circumstances,
Temin adds, what matters is not just the simple acquisition of
knowledge but the classroom experiences that lead to, as he puts it,
"Knowing how to think, how to get on with people, how to cooperate.
All the social skills and social capital [are] going to be
critically important for kids in this environment."
In the book Temin bluntly advocates for greater investment in public
schools as well as public universities, saying that America's
"educational system was the wonder of the 20th century." It still
works very well, he notes, for kids at good public schools and for
those college students who graduate without burdensome debt.
But for others, he notes, "We don't have a path for the next
generation to have what we expect for a middle-class life [and] not
everyone wants to finance it."
"The Vanishing Middle Class" comes amid increasing scrutiny of class
relations in the U.S., but at a time when the public discussion of the
topic is still very much evolving. Gerald Jaynes, a professor in the
departments of Economics and African American Studies at Yale
University, calls Temin's new book "a significant addition to the
existing literature on inequality."
Temin, for his part, hopes that by the end of "The Vanishing Middle
Class," readers will agree that a society paying for more education
will have made a worthy investment.
"The people in this country are the resource we have," Temin says. "If
we maintain the character of our fellow citizens, that is really our
national strength."
The [neoliberal] Democrats like Sanjait and PGL deliver a
two-track economy and wonder why voter turn-out is low and
the white working class are susceptible to demagogues like
Trump.
Why did Michigan, Wisconsin, Pennsylvania and Ohio
go for a laughable reality TV star like Trump.
They expend a lot of energy trying to explain away the
obvious like globalization and attacking heretics like Bernie
Sanders.
EMichael says it all about race but ignores the obvious.
"Indeed, from about 1945 until 1975, as Temin documents in
the book, U.S. productivity gains and the wage gains of
goods-producing workers tracked each other closely. But since
1975, productivity has roughly doubled, while those wages
have stayed flat."
Interesting that neoliberalism really took off around the
1980s, with Clinton moving the Democrats to the right and
endorsing corporate globalization.
The unions got their power during the New Deal. They were
under serious attack in the 1970s with its inflation and its
oil shocks. When the government started insisting that blacks
get some of the New Deal goodies, conservative whites balked.
When push came to shove, they voted for Reagan who promptly
killed the unions. It was a suicide deal. If whites had to
share prosperity with blacks, then not being prosperous was
better. That attitude is around today.
Neoliberalism was
part of it. The Democrats did move to the right. People
forget that it was Carter who deregulated the airlines, not
Reagan. It was Carter who bought the nonsense about balancing
the budget. Hell, it was Carter who started getting tough
with the USSR after Nixon's detente.
The dual economy, they say, as if it were an abstract.
My
Dad was shot in the face in Germany. The Unions were
established by the people who established our society.
The sentiments being expressed here by the people whose
existence would not even be possible without the efforts of
my Dad, and men like him, are breathtaking.
The current "thinking" and bloviation of main stream
Economics, seems to be, that they're wishful thinking,
contradicts the accepted, published foundations.
Barrack O'Bama may have been the worst President of all time.
Except for George Bush, Bill Clinton, the other Bush, and our
favorite life-guard, Ronald Reagan.
The United States of America.
MANKIND being originally equals in the order of creation, the
equality could only be destroyed by some subsequent
circumstance: the distinctions of rich and poor may in a
great measure be accounted for, and that without having
recourse to the harsh ill-sounding names of oppression and
avarice. Oppression is often the CONSEQUENCE, but seldom or
never the MEANS of riches; and tho' avarice will preserve a
man from being necessitously poor, it generally makes him too
timorous to be wealthy.
But there is another and great
distinction for which no truly natural or religious reason
can be assigned, and that is the distinction of men into
KINGS and SUBJECTS. Male and female are the distinctions of
nature, good and bad the distinctions of Heaven; but how a
race of men came into the world so exalted above the rest,
and distinguished like some new species, is worth inquiring
into, and whether they are the means of happiness or of
misery to mankind.
In the early ages of the world, according to the scripture
chronology there were no kings; the consequence of which was,
there were no wars; it is the pride of kings which throws
mankind into confusion. Holland, without a king hath enjoyed
more peace for this last century than any of the monarchical
governments in Europe. Antiquity favours the same remark; for
the quiet and rural lives of the first Patriarchs have a
snappy something in them, which vanishes when we come to the
history of Jewish royalty.
Government by kings was first introduced into the world by
the Heathens, from whom the children of Israel copied the
custom. It was the most prosperous invention the Devil ever
set on foot for the promotion of idolatry. The Heathens paid
divine honours to their deceased kings, and the Christian
World hath improved on the plan by doing the same to their
living ones. How impious is the title of sacred Majesty
applied to a worm, who in the midst of his splendor is
crumbling into dust!
As the exalting one man so greatly above the rest cannot
be justified on the equal rights of nature, so neither can it
be defended on the authority of scripture; for the will of
the Almighty as declared by Gideon, and the prophet Samuel,
expressly disapproves of government by Kings.
All anti-monarchical parts of scripture have been very
smoothly glossed over in monarchical governments, but they
undoubtedly merit the attention of countries which have their
governments yet to form. "Render unto Cesar the things which
are Cesar's" is the scripture doctrine of courts, yet it is
no support of monarchical government, for the Jews at that
time were without a king, and in a state of vassalage to the
Romans.
It's funny how Sanjait and PGL don't want to talk about what
Krugman wrote in his latest blog post:
"This ties in with
an important recent piece by Zack Beauchamp on the striking
degree to which left-wing economics fails, in practice, to
counter right-wing populism; basically, Sandersism has failed
everywhere it has been tried. Why?
The answer, presumably, is that what we call populism is
really in large degree white identity politics, which can't
be addressed by promising universal benefits. Among other
things, these "populist" voters now live in a media bubble,
getting their news from sources that play to their
identity-politics desires, which means that even if you offer
them a better deal, they won't hear about it or believe it if
told. For sure many if not most of those who gained health
coverage thanks to Obamacare have no idea that's what
happened.
That said, taking the benefits away would probably get
their attention, and maybe even open their eyes to the extent
to which they are suffering to provide tax cuts to the rich.
In Europe, right-wing parties probably don't face the same
dilemma; they're preaching herrenvolk social democracy, a
welfare state but only for people who look like you. In
America, however, Trumpism is faux populism that appeals to
white identity but actually serves plutocrats. That
fundamental contradiction is now out in the open."
He is now 79 years old. He has written some brilliant
analyzes over his incredible career. His latest is something
I must read as this discussion is so spot on regarding the
current debate.
Noni Mausa :
March 13, 2017 at 04:13 PM
What the wealthy right wing has decided in the past 40 years is that they don't need citizens. At
least, not as many citizens as are actually citizens. What they are comfortable with is a large population
of free range people, like the longhorn cattle of the old west, who care for themselves as best they
can, and are convenient to be used when the "ranchers" want them.
Of course, this is their approach to foreign workers, also, but for the purpose of maintaining
a domestic society within which the domestic rich can comfortably live, only native born Americans
really suit.
With the development of high productivity production, farming, and hands-off war technology the
need for a large number of citizens is reduced. The wealthy can sit in their towers and arrange the
world as suits them, and use the rest of the world as a "farm team" to supply skills and labour as
needed.
Proof of this is the fact that they talk about the economy's need for certain skills, training,
services and so on, but never about the inherent value of citizens independent of their utility to
someone else.
No wonder the unemployed increasingly kill themselves, or others. The whole economy tells them,
indirectly but unmistakably, that their human value does not exist. ken melvin : ,
March 13, 2017 at 04:48 PM
Can someone get me from $300 billion tax cut for the rich to getting the markets work for health
care?
It isn't about 'markets', never is. It is about extraction of as much profit as possible using
whatever means necessary. This is what the CEOs of insurance companies get payed to do. Insurance
policies they don't pay out, the ones Ryan is referring to, are as good as any for scoring.
"It isn't about 'markets', never is. It is about extraction of as much profit as possible using
whatever means necessary. This is what the CEOs of insurance companies get payed to do."
What surprises me most in this discussion is how Obamacare suddenly changed from a dismal and
expensive failure enriching private insurers to a "good deal".
When the PPACA band-aid is pulled off the US health care mess the gusher will be blamed on "the
Russians running the White House".
Cuba does better than the US despite being economically sanctioned for 55 years. Distribution
of artificially scarce health care resources is utterly broken. This failed market is financed
by a mix of 'for profit' insurance and medicare (which sublets a big part to 'for profit' insurance).
Coverage!!! PPACA added taxpayers' money to finance a bigger failed market. It did nothing
to address the market fail!
Single payer would not address the market failure. Single payer would put the government financing
most of the failed market.
Democrats have put band-aids on severe bleeds since Truman made the cold war more important
than Americans.
Cuba is the shining example of how doing the first 20% of healthcare well for everyone gets you
80% of the benefit cheap.
The US is the shining example of how refusing to do the first 20% of healthcare well for everyone
only gets you 80% of the benefit no matter how much you spend.
Mark's very nice argument does nothing to address The Official Trump Counter Argument:
[Shorter version: Obamacare is doomed, going to blow up. Any replacement is therefore better
than Obamacare; Facts seldom win arguments against beliefs]
"During a listening session on healthcare at the White House on Monday, President Donald Trump
said Republicans "are putting themselves in a very bad position by repealing Obamacare."
Trump said that his administration is "committed to repealing and replacing" Obamacare and
that the House Obamacare replacement will lead to more choice at a lower cost. He further stated,
"[T]he press is making Obamacare look so good all, of a sudden. I'm watching the news. It looks
so good. They're showing these reports about this one gets so much, and this one gets so much.
First of all, it covers very few people, and it's imploding. And '17 will be the worst year. And
I said it once; I'll say it again: because Obama's gone."
He continued, "And the Republicans, frankly, are putting themselves in a very bad position
- I tell this to Tom Price all the time - by repealing Obamacare. Because people aren't gonna
see the truly devastating effects of Obamacare. They're not gonna see the devastation. In '17
and '18 and '19, it'll be gone by then. It'll - whether we do it or not, it'll be imploded off
the map."
He added, "So, the press is making it look so wonderful, so that if we end it, everyone's going
to say, 'Oh, remember how great Obamacare used to be? Remember how wonderful it used to be? It
was so great.' It's a little bit like President Obama. When he left, people liked him. When he
was here, people didn't like him so much. That's the way life goes. That's human nature."
Trump further stated that while letting Obamacare collapse on its own was the best thing to
do politically, it wasn't the right thing to do for the country.
"... This was Alan Greenspan's trick that he pulled in the 1980s as head of the Greenspan Commission. He said that what was needed in America was to traumatize the workers – to squeeze them so much that they won't have the courage to strike. Not have the courage to ask for better working conditions. He recognized that the best way to really squeeze wage earners is to sharply increase their taxes. He didn't call FICA wage withholding a tax, but of course it is. His trick was to say that it's not really a tax, but a contribution to Social Security. And now it siphons off 15.4% of everybody's pay check, right off the top. ..."
"... The effect of what Greenspan did was more than just to make wage earners pay this FICA rake-off out of their paycheck every month. The charge was set so high that the Social Security fund lent its surplus to the government. Now, with all this huge surplus that we're squeezing out of the wage earners, there's a cut-off point: around $120,000. The richest people don't have to pay for Social Security funding, only the wage-earner class has to. Their forced savings are lent to the government to enable it to claim that it has so much extra money in the budget pouring in from social security that now it can afford to cut taxes on the rich. ..."
"... So the sharp increase in Social Security tax for wage earners went hand-in-hand with sharp reductions in taxes on real estate, finance for the top One Percent – the people who live on economic rent, not by working, not by producing goods and services but by making money on their real estate, stocks and bonds "in their sleep." That's how the five percent have basically been able to make their money. ..."
"... The Federal Reserve has just published statistics saying the average American family, 55 and 60 years old, only has about $14,000 worth of savings. This isn't nearly enough to retire on. There's also been a vast looting of pension funds, largely by Wall Street. That's why the investment banks have had to pay tens of billions of dollars of penalties for cheating pension funds and other investors. The current risk-free rate of return is 0.1% on government bonds, so the pension funds don't have enough money to pay pensions at the rate that their junk economics advisors forecast. The money that people thought was going to be available for their retirement, all of a sudden isn't. The pretense is that nobody could have forecast this! ..."
"... In Chile, the Chicago Boys really developed this strategy. University of Chicago economists made it possible, by privatizing and corporatizing the Social Security system. Their ploy was to set aside a pension fund managed by the company, mostly to invest in its own stock. The company would then set up an affiliate that would actually own the company under an umbrella, and then leave the company with its pension fund to go bankrupt – having already emptied out the pension fund by loaning it to the corporate shell. ..."
"... We have the highest healthcare costs in the world, so out of your paycheck – which is not increasing – you're going to have to pay more and more for FICA withholding for Social Security, more and more for healthcare, for the pharmaceutical monopoly and the health insurance monopoly. You'll also have to pay more and more to use public services for transportation to get to work, because the state is not funding that anymore. We're cutting taxes on the rich, so we don't have the money to do what social democracies are supposed to do. You're going to privatize the roads, so that now you're going to have to pay to use the road to drive to work, if you don't have public transportation. ..."
"... "Classical and neo-classical economics, as dominant today, has used the deductive methodology: Untested axioms and unrealistic assumptions are the basis for the formulation of theoretical dream worlds that are used to present particular 'results'. As discussed in Werner (2005), this methodology is particularly suited to deriving and justifying preconceived ideas and conclusions, through a process of working backwards from the desired 'conclusions', to establish the kind of model that can deliver them, and then formulating the kind of framework that could justify this model by choosing suitable assumptions and 'axioms'. In other words, the deductive methodology is uniquely suited for manipulation by being based on axioms and assumptions that can be picked at will in order to obtain pre-determined desired outcomes and justify favoured policy recommendations. It can be said that the deductive methodology is useful for producing arguments that may give a scientific appearance, but are merely presenting a pre-determined opinion." ..."
"... "Progress in economics and finance research would require researchers to build on the correct insights derived by economists at least since the 19th century (such as Macleod, 1856). The overview of the literature on how banks function, in this paper and in Werner (2014b), has revealed that economics and finance as research disciplines have on this topic failed to progress in the 20th century. The movement from the accurate credit creation theory to the misleading, inconsistent and incorrect fractional reserve theory to today's dominant, yet wholly implausible and blatantly wrong financial intermediation theory indicates that economists and finance researchers have not progressed, but instead regressed throughout the past century. That was already Schumpeter's (1954) assessment, and things have since further moved away from the credit creation theory." ..."
"... "Although commercial banks create money through lending, they cannot do so freely without limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive banking system." ..."
"... it insults the intelligence of the audience, ..."
"... we would now call ..."
"... totally insupportable on its face. ..."
"... as a corporate, spiritually mandated obligation, ..."
"... You're going to privatize the roads, so that now you're going to have to pay to use the road to drive to work, if you don't have public transportation. ..."
"... Henry Ford II: Walter, how are you going to get those robots to pay your union dues? Walter Reuther: Henry, how are you going to get them to buy your cars? ..."
"... "You're turning the economy into what used to be called feudalism. Except that we don't have outright serfdom, because people can live wherever they want. But they all have to pay to this new hereditary 'financial/real estate/public enterprise' class that is transforming the economy." ..."
"... "The industrial capitalists, these new potentates, had on their part not only to displace the guild masters of handicrafts, but also the feudal lords, the possessors of the sources of wealth. In this respect, their conquest of social power appears as the fruit of a victorious struggle both against feudal lordship and its revolting prerogatives, and against the guilds and the fetters they laid on the free development of production and the free exploitation of man by man. The chevaliers d'industrie, however, only succeeded in supplanting the chevaliers of the sword by making use of events of which they themselves were wholly innocent. They have risen by means as vile as those by which the Roman freedman once on a time made himself the master of his patronus. ..."
"... The starting point of the development that gave rise to the wage labourer as well as to the capitalist, was the servitude of the labourer. The advance consisted in a change of form of this servitude, in the transformation of feudal exploitation into capitalist exploitation. " ..."
Posted on
March 9, 2017 by Yves
Smith Yves here. This Real News Network interview is from a multi-part series about Michael Hudson's
new book, J is for Junk Economics. And after a lively discussion by readers of the economic necessity
of many to become expats to get their living costs down to a viable level, a discussion of the disingenuous
political messaging around retirement seemed likely. Among the people in my age cohort, the ones
that managed to attach themselves to capital (being in finance long enough at a senior enough level,
working in Corporate America and stock or stock options) are generally set to have an adequate to
very comfortable retirement. The ones who didn't (and these include people I know who are very well
paid professionals but for various reasons, like health problems or periods of unemployment that
drained savings, haven't put much away) will either have to continue working well past a normal retirement
age (even charitably assuming they can find adequately compensated work) or face a struggle or even
poverty.
SHARMINI PERIES: It's The Real News Network. I'm Sharmini Peries, coming to you from Baltimore.
I'm speaking with Michael Hudson about his new book J Is For Junk Economics: A Guide to Reality in
the Age of Deception.
Thanks for joining me again, Michael.
MICHAEL HUDSON: Good to be here.
SHARMINI PERIES: So, Michael, on page 260 of your book you deal with the issue of Social Security
and it's a myth that Social Security should be pre-funded by its beneficiaries, or that progressive
taxes should be abolished in favor of a flat tax. Just one tax rate for everyone you criticize. We
talked about this earlier, but let's apply what this actually means when it comes to Social Security.
MICHAEL HUDSON: The mythology aims to convince people that if they're the beneficiaries of Social
Security, they should be responsible for saving up to pre-fund it. That's like saying that you're
the beneficiary of public education, so you have to pay for the schooling. You're the beneficiary
of healthcare, you have to save up to pay for that. You're the beneficiary of America's military
spending that keeps us from being invaded next week by Russia, you have to spend for all that – in
advance, and lend the money to the government for when it's needed.
Where do you draw the line? Nobody anticipated in the 19th century that people would have to pay
for their own retirement. That was viewed as an obligation of society. You had the first public pension
(social security) program in Germany under Bismarck. The whole idea is that this is a public obligation.
There are certain rights of citizens, and among these rights is that after your working life you
deserve to live in retirement. That means that you have to be able to afford this retirement, and
not have to beg in the street for money. The wool that's been pulled over people's eyes is to imagine
that because they're the beneficiaries of Social Security, they have to actually pay for it.
This was Alan Greenspan's trick that he pulled in the 1980s as head of the Greenspan Commission.
He said that what was needed in America was to traumatize the workers – to squeeze them so much that
they won't have the courage to strike. Not have the courage to ask for better working conditions.
He recognized that the best way to really squeeze wage earners is to sharply increase their taxes.
He didn't call FICA wage withholding a tax, but of course it is. His trick was to say that it's not
really a tax, but a contribution to Social Security. And now it siphons off 15.4% of everybody's
pay check, right off the top.
The effect of what Greenspan did was more than just to make wage earners pay this FICA rake-off
out of their paycheck every month. The charge was set so high that the Social Security fund lent
its surplus to the government. Now, with all this huge surplus that we're squeezing out of the wage
earners, there's a cut-off point: around $120,000. The richest people don't have to pay for Social
Security funding, only the wage-earner class has to. Their forced savings are lent to the government
to enable it to claim that it has so much extra money in the budget pouring in from social security
that now it can afford to cut taxes on the rich.
So the sharp increase in Social Security tax for wage earners went hand-in-hand with sharp
reductions in taxes on real estate, finance for the top One Percent – the people who live on economic
rent, not by working, not by producing goods and services but by making money on their real estate,
stocks and bonds "in their sleep." That's how the five percent have basically been able to make their
money.
The idea that Social Security has to be funded by its beneficiaries has been a setup for the wealthy
to claim that the government budget doesn't have enough money to keep paying. Social Security may
begin to run a budget deficit. After having run a surplus since 1933, for 70 years, now we have to
begin paying some of this savings out. That's called a deficit, as if it's a disaster and we have
to begin cutting back Social Security. The implication is that wage earners will have to starve in
the street after they retire.
The Federal Reserve has just published statistics saying the average American family, 55 and
60 years old, only has about $14,000 worth of savings. This isn't nearly enough to retire on. There's
also been a vast looting of pension funds, largely by Wall Street. That's why the investment banks
have had to pay tens of billions of dollars of penalties for cheating pension funds and other investors.
The current risk-free rate of return is 0.1% on government bonds, so the pension funds don't have
enough money to pay pensions at the rate that their junk economics advisors forecast. The money that
people thought was going to be available for their retirement, all of a sudden isn't. The pretense
is that nobody could have forecast this!
There are so many corporate pension funds that are going bankrupt that the Pension Benefit Guarantee
Corporation doesn't have enough money to bail them out. The PBGC is in deficit. If you're going to
be a corporate raider, if you're going to be a Governor Romney or whatever and you take over a company,
you do what Sam Zell did with the Chicago Tribune: You loot the pension fund, you empty it out to
pay the bondholders that have lent you the money to buy out the company. You then tell the workers,
"I'm sorry there is nothing there. It's wiped out." Half of the employee stock ownership programs
go bankrupt. That was already a critique made in the 1950s and '60s.
In Chile, the Chicago Boys really developed this strategy. University of Chicago economists
made it possible, by privatizing and corporatizing the Social Security system. Their ploy was to
set aside a pension fund managed by the company, mostly to invest in its own stock. The company would
then set up an affiliate that would actually own the company under an umbrella, and then leave the
company with its pension fund to go bankrupt – having already emptied out the pension fund by loaning
it to the corporate shell.
So it's become a shell game. There's really no Social Security problem. Of course the government
has enough tax revenue to pay Social Security. That's what the tax system is all about. Just look
at our military spending. But if you do what Donald Trump does, and say that you're not going to
tax the rich; and if you do what Alan Greenspan did and not make higher-income individuals contribute
to the Social Security system, then of course it's going to show a deficit. It's supposed to show
a deficit when more people retire. It was always intended to show a deficit. But now that the government
actually isn't using Social Security surpluses to pretend that it can afford to cut taxes on the
rich, they're baiting and switching. This is basically part of the shell game. Explaining its myth
is partly what I try to do in my book.
SHARMINI PERIES: If the rich people don't have to contribute to the Social Security base, are
they able to draw on it?
MICHAEL HUDSON: They will draw Social Security up to the given wage that they didn't pay Social
Security on, which is up to $120,000 these days. So yes, they will get that little bit. But what
people make over $120,000 is completely exempt from the Social Security system. These are the rich
people who run corporations and give themselves golden parachutes.
Even for companies that have engaged in massive financial fraud, the large banks, City Bank, Wells
Fargo – all these have golden parachutes. They still are getting enormous pensions for the rest of
their lives. And they're talking as if, well, corporate pensions are in deficit, but for the leading
officers, arrangements are quite different from the pensions to the blue collar workers and the wage
earners as a whole. So there's a whole array of fictitious economic statistics.
I describe this in my dictionary as "mathiness." The idea that if you can put a number on something,
it somehow is scientific. But the number really is the product of corporate accountants and lobbyists
reclassifying income in a way that it doesn't appear to be taxable income.
Taking money out and giving it to the richest 5%, while making it appear as if all this deficit
is the problem of the 95%, is "blame the victim" economics. You could say that's the way the economic
accounts are being presented by Congress to the American people. The aim is to popularize a "blame
the victim" economics. As if it's your fault that Social Security's going bankrupt. This is a mythology
saying that we should not treat retirement as a public obligation. It's becoming the same as treating
healthcare as not being a public obligation.
We have the highest healthcare costs in the world, so out of your paycheck – which is not
increasing – you're going to have to pay more and more for FICA withholding for Social Security,
more and more for healthcare, for the pharmaceutical monopoly and the health insurance monopoly.
You'll also have to pay more and more to use public services for transportation to get to work, because
the state is not funding that anymore. We're cutting taxes on the rich, so we don't have the money
to do what social democracies are supposed to do. You're going to privatize the roads, so that now
you're going to have to pay to use the road to drive to work, if you don't have public transportation.
You're turning the economy into what used to be called feudalism. Except that we don't have outright
serfdom, because people can live wherever they want. But they all have to pay to this new hereditary
"financial/real estate/public enterprise" class that is transforming the economy.
SHARMINI PERIES All right, Michael. Many, many, many things to learn from your great book, J Is
For Junk Economics: A Guide to Reality in the Age of Deception. Michael is actually on the road promoting
the book. So if you have an opportunity to see him at one of the places he's going to be speaking,
you should check out his website, michael-hudson.com
So I thank you so much for joining us today, Michael. And as most of you know, Michael Hudson
is a regular guest on The Real News Network. We'll be unpacking his book and some of the concepts
in it on an ongoing basis. So please stay tuned for those interviews.
It's 10 bagger time for sure. A house in the tropics with servants at your beck and call. Breakfast
on the veranda. Lunch at the club. An afternoon sail. Dinner at the house of a famous author.
Or some native woman who cooks spicy food and is hotter than the sun. No shuffleboard and pills!
You need to stay buff if you wanna live like this. You can't be flabby and short of breath.
Yves's remark on retirement by sector is apt. I laugh bitter tears when I see that a financial
CEO contract always includes a "pension," as if the tens of millions of dollars in salary and
bonuses weren't enough.
A "pension" is for those who, broken by a life of hard physical labor, finally can't work any
more for their crust of bread. It's not another revenue line-item that's barely enough to refuel
the yacht.
There was a time when people "saved for retirement." With real rates of return being negative,
and all assets priced arbitrarily at the whim of the central bank's policy du jour, I am perfectly
frank when people ask "what should they invest in": nothing. Pay down your debt, and spend whatever
you have beyond an emergency cushion right now, while you can enjoy it. Savings will inevitably
be wasted, by inflation, the "health-care system," or financial-sector scammers. Do not ask for
whom the bell tolls; if you have to ask, you can't afford it.
This is all in the context of the Federal Government already spending 20% of GDP, a number
that was never designed to happen. It is the States that were supposed to be in charge of the
people's welfare, not the national authority. So the argument that we should increase Federal
taxes to somehow redistribute wealth is also wrong, because that wealth will simply be wasted,
spent by people who are responsible to no one.
At moments like this there are no good choices. Most Europeans have long learned to live with
governments that were hostile to them, and that is where we stand now.
Tocqueville's Democracy In America is tough going in spots, but my gosh, what a beautiful world
he depicts, when the average Pennsylvanian's tax liability beyond his township was $4 a year.
I won't argue too hard about your "Federal vs State" argument, but note that if the state is
in charge of most taxation then Richy Rich can live in a low tax state next door and employ the
well-educated, healthy (single-payer) people in your state.
"Classical and neo-classical economics, as dominant today, has used the deductive methodology:
Untested axioms and unrealistic assumptions are the basis for the formulation of theoretical dream
worlds that are used to present particular 'results'. As discussed in Werner (2005), this methodology
is particularly suited to deriving and justifying preconceived ideas and conclusions, through
a process of working backwards from the desired 'conclusions', to establish the kind of model
that can deliver them, and then formulating the kind of framework that could justify this model
by choosing suitable assumptions and 'axioms'. In other words, the deductive methodology is uniquely
suited for manipulation by being based on axioms and assumptions that can be picked at will in
order to obtain pre-determined desired outcomes and justify favoured policy recommendations. It
can be said that the deductive methodology is useful for producing arguments that may give a scientific
appearance, but are merely presenting a pre-determined opinion."
"Progress in economics and finance research would require researchers to build on the correct
insights derived by economists at least since the 19th century (such as Macleod, 1856). The overview
of the literature on how banks function, in this paper and in Werner (2014b), has revealed that
economics and finance as research disciplines have on this topic failed to progress in the 20th
century. The movement from the accurate credit creation theory to the misleading, inconsistent
and incorrect fractional reserve theory to today's dominant, yet wholly implausible and blatantly
wrong financial intermediation theory indicates that economists and finance researchers have not
progressed, but instead regressed throughout the past century. That was already Schumpeter's (1954)
assessment, and things have since further moved away from the credit creation theory."
"A lost century in economics: Three theories of banking and the conclusive evidence" Richard
A. Werner
Francis Fukuyama talked of the "end of history" and "liberal democracy" in 1989.
Capitalism had conquered all and was the one remaining system left that had stood the test
of time.
With such a successful track record, everything was being changed to a new neo-liberal ideology
and globalization was used to test this new ideology everywhere.
The Great Moderation seemed to indicate that the new ideology was a great success.
"Seemed" is the operative word here.
A "black swan" arrives in 2008 and nothing is the same again, the Central Bankers pump in trillions
to maintain the new normal of secular stagnation.
Sovereign debt crises erupt, the Euro-zone starts to disintegrate, austerity becomes the norm.,
no one knows how to restore growth and the populists rise.
A new ideology comes in that is rolled out globally and seems to work before 2008.
What happened in 2008?
This is the build up to 2008 that can be seen in the money supply (money = debt):
The money supply is flat in the recession of the early 1990s.
Then it really starts to take off as the dot.com boom gets going which rapidly morphs into
the US housing boom, courtesy of Alan Greenspan's loose monetary policy.
When M3 gets closer to the vertical, the black swan is coming and you have an out of control
credit bubble on your hands (money = debt).
The theory.
Irving Fisher produced the theory of debt deflation in the 1930s.
Hyman Minsky carried on with his work and came up with the "Financial instability Hypothesis"
in 1974.
Steve Keen carried on with their work and spotted 2008 coming in 2005.
You can see what Steve Keen saw in the graph above, it's impossible to miss when you know what
you are looking for but no one in the mainstream did.
If you paid off all the debt there would be no money.
Money and debt are opposite side of the same coin, matter and anti-matter.
The money supply reflects debt/credit bubbles.
Monetary theory has been regressing for over 100 years to today's abysmal theory where banks
act as intermediaries and don't create and destroy money.
The success of earlier years was mainly due to money creation from new debt (mainly in housing
booms) globally feeding into economies leaving a terrible debt over-hang.
Jam today, penury tomorrow.
This is how debt works.
Twelve people were officially recognised by Bezemer in 2009 as having seen 2008 coming, announcing
it publicly beforehand and having good reasoning behind their predictions (Michael Hudson and
Steve Keen are on the list of 12).
They all saw the problem being excessive debt with debt being used to inflate asset prices
(US housing).
The Euro's periphery nations had unbelievably low interest rates with the Euro, the risks were
now based on common debt service. Mass borrowing and spending occurs at the periphery with the
associated money creation causing positive feedback.
Years later, it was found the common debt service didn't actually exist and interest rates
correct for the new reality.
Jam today, penury tomorrow.
Why doesn't austerity work? (although it has been used nearly everywhere)
You need to understand money, debt, money creation and destruction on bank balance sheets and
its effect on the money supply. Almost no one does.
Alternative and I would say much more accurate realities:
1) Michael Hudson "Killing the Host", "J is for Junk Economics"
The knowledge of economic history and the classical economists that has been lost and the problems
this is causing. Ancient Sumer had more enlightened views on debt than we have today.
2) Steve Keen "De-bunking Economics"
His work is based on that of Hyman Minsky and looks into the effects of private debt on the
economy and the inflation of asset bubbles with debt.
3) Richard Werner "Where does money come from?"
The only book generally available that tells the truth about money, I don't think there are
any other modern books that do and certainly not in economics textbooks
4) Richard Koo's study on the Great Depression and Japan after 1989 showing the only way out
of debt deflation/balance sheet recessions.
"Although commercial banks create money through lending, they cannot do so freely without
limit. Banks are limited in how much they can lend if they are to remain profitable in a competitive
banking system."
The limit for money creation holds true when banks keep the debt they issue on their own books.
The BoE's statement was true, but is not true now as banks can securitize bad loans and get
them off their books.
Before 2008, banks were securitising all the garbage sub-prime mortgages, e.g. NINJA mortgages,
and getting them off their books.
Money is being created freely and without limit, M3 is going exponential before 2008.
Thanks SOS, agree. We're at that 08 point now, in fact it's worse.
Pensions should just be a click of the computer, no borrowings, savings or taxes needed and
they need to be sufficient to live on.
No, we aren't 'winning'
In Australia, we used to give people the 'aged' at 60 for women and 65 for men. Now its 67
for both, the woman's aged cut in was raised for 'equality' reasons, and it going up to 70 for
my kids.
Politicians, judges, CEOs and the c-class, all those 'shiny bums', they can often work well
into their 60s. The rest of us experience age discrimination in a tight job market and are forced
into menial jobs just when society should be funding their well earned retirement.
The whole "there aren't enough workers to support retirees" meme is risible.
Example: Jane funds an IRA for 30 years. For those 30 years, there is one person paying in,
and zero taking out. When Jane retires, the IRA flips to one person taking out, and zero paying
in.
Disaster, or working as advertised?
That Serious Thinkers, elected officials and the SSA themselves advance this trope to explain
why SS is hopeless is proof of willful mendacity.
Now if these folks admit, well yuh, you paid in over all of these years, but the money ain't
there no more, then first, that's an admission of mismanagement (unsurprising), and second, bail
us the fuck out like you did Wall Street.
Most every purported "help" by the government is the exact opposite: your paying into a black
hole.
Look around you. What around you was paid for by the government? The answer is none of it was.
Taxes are a way to keep the bureaucratic structure afloat. What is very clear is that once government
reaches a certain size it begins to massively leach off of those that work and gives it to those
that "manage".
Look at any industry today and you will find, in the private sector, declining or stagnant
wages for the "drones". Then look at the public sector: expanding, better benefits, better wages,
less work etc. Thinking about it makes my blood boil. I see truckers making less now then 10 years
ago, yet, the industry keeps crying that they "don't have enough workers". Yeah, sorry no one
wants to work 25/8 driving around in the day time, sleeping in a truck at night, getting tracked
through GPS & get penalized for going above speed limits when they can work for the DMV, make
the same amount, and sit at a desk for 7 hours a day with plenty of benefits and vacation time.
Its about time for this system to implode. I see globalization and government expansion as
a huge force that will eventually cause a revolution in the States.
Globalization and the government are simply red herrings meant to distract Trump voters while
shareholder value driven corporate overlords continue looting.
Look around you . The government employs less people than pretty much for my whole
life. Please get informed before you go off on a multi-paragraph rant.
maybe noone should work in trucking, freight trains are much more energy efficient as far as
a means of transporting goods over long distances. Nah I'm not faulting truckers, just saying
it makes no societal sense is all except maybe for the last few miles, but then neither do a lot
of things. I doubt many people want to work at the DMV, but then maybe the benefits are enough
to make a distasteful job seem worth it.
As usual, the abuse of history is the outstanding credibility-buster in this piece. When an
author says this,
Nobody anticipated in the 19th century that people would have to pay for their own retirement.
That was viewed as an obligation of society.
why should I believe anything else that he has to say?
The sole instance given is of Bismarck's Germany, actually ground-breaking in its social welfare
policies, which came only in the last part of the 19th century.
For most of the 19th century, just about everywhere, nobody who worked for a living expected
to live long enough to retire.
Indeed, retirement in past centuries had a different denotation. Its common use was among the
aristocracy, when one of that number determined to remove himself from active (urban) social or
political life and withdraw (hence the etymology, "re-tirer"), usually to the country.
Haygood had to resuscitate "rusticate" for the other day, to achieve a modern equivalent of
that.
All of this is common knowledge. In case you don't think so, spend five minutes with any book
of demographics or social history; and that's just for Europe. Don't let's even ask what "nobody
expected to pay for their retirement" meant in early nineteenth-century Alabama.
By the way, Hudson does this all the time. When I can fact-check offhand, from my fund of common
knowledge, he is often casually abusing the truth. I can be pretty sure that the rest of what
he says is just as unreliable.
You may be correct about the 19th century, but it is 2017. And his points about the US tax
system, the banks, the wealthiest 1% and our gov't deceiving the middle and lower class are solid.
A very basic retirement and healthcare should be provided to all in any decent marginally successful
society. Not to mention a supposedly "great" one.
I think this is where some progressive get tripped up and don't understand why their policies
aren't more popular to the wide swaths of America outside of their bubble.
Often times, these people (I use this term loosely to include working class whites in Appalachia
as well as Silicon Valley libertarians) like to provide a fair and wide safety net. However, most
policies that are advanced are strictly means tested. This causes significant resentment among
those just outside of the cutoff lines. Think: Social Security has essentially blanket coverage.
Yes, there's some redistribution going on behind the scenes, but if I pay in for 30 years I will
get most of my money back. It's wildly popular, while welfare programs are not.
The same applies for health care – Medicare is popular and Medicaid is not. If I pay in for
a government program, I want to be able to take advantage of it. Save me the crap about not wanting
to subsidize the lifestyles of the 1%; they pay in far more than they would take out of the program.
It's a small price to pay to have universal coverage and buy in from all segments of society.
So extending Medicare down to everyone is a better political strategy than extending Medicaid
upwards to encompass higher income levels.
You read a great deal into a statement that you didn't at all prove was untrue. Not impressive.
The question is, did society believe that it had a responsibility of care for people that got
too old to work? You didn't even address that. Yes we know life was "nasty, brutish and (most
often) short. That doesn't invalidate what he said.
PhilM 'I can be pretty sure that the rest of what he says is just as unreliable.'
No mate, he speaks truth and may have exaggerated, but the point remains that here, the UK,
most of Europe – then the state funds your pension if you need one. It is now a social obligation.
Only in the US, do you have this class of people (the working class) who don't deserve retirement
and must fund their own meagre pensions, and if the 'pool which funds the pensions' becomes insufficient,
well you know the rest.
Taxes see, they fund things, or more often don't, because it's a widely accepted lie to keep
the private bank money creation bullshit going forever.
That's the problem, Dog, I generally agree with his point, and with the responders to my comment,
on policy grounds. My point is that leading with something that is provably false, and even probably
false to common knowledge, is not a winning tactic; some would say it insults the intelligence
of the audience, even.
To me this site, if it's about anything, is about filtering out the BS that is used by people
with an agenda to "enhance" their arguments. Lambert does this with a Lancelot-sized skewer. And
part of the beauty is the crowd-sourced fact-checking from an extraordinarily informed, and sceptical,
community.
I may not have much to add to their expertise, but one thing I do know is some European history,
and it drives me berzerk to see people just misuse history as if it strengthens their argument.
If they don't know that what they are saying is true, they should not say it. And by "know it
is true," I mean, know the source, and the source of the source, and be able to judge its reliability.
That is what scholarship is all about: seeing how far down the turtles go.
So when someone just tosses out an assertion about "what the past thought was right," as if
that created a moral obligation or not in 2017 (which as MBC quite rightly observed it does not,
at least not without a clearer argument), they should be critiqued. When their assertion is based
on sloppy cherry-picked facts and wrongly generalized, they should be called out as either uninformed
or malicious, in hopes they will be less so in the future.
That's all I was saying; I did not have a point to make about pensions, because I agree with
Hudson's viewpoints almost all the time, which is why it is so sad to see him turn out to be so
cheesy, so often.
My personal experience of pensions is this: they are a total scam to lock people into exploitive,
nearly intolerable working conditions on the flimsiest of promises in the private sector; and
in the public sector, they are a way of adding to the debt burden of generations yet to come without
the assent of the people: taxation without representation, in effect.
I have seen professionals crumble morally thanks to the force of the pension. It is despicable
corporate oppression at the subtle level, because it looks as if they are doing a good thing,
which of course they are not. It's more subtle than their obvious screaming cruelties to people
and animals and the land, which, it must also be said, nobody does anything about either.
Yes pension systems aren't perfect, but some people don't have family or money to fall back
on when they get old. I am seeing more and more of my own friends in their 60s struggling to earn
money through work. They want to stop, but can't afford to.
And, I am dismayed and disheartened of seeing people on the sidewalks that could be my parents.
Or, shit, me
I have no sympathy for these people. Read Hillbilly Elegy and see the perspective from the
white working class. More often than not, people who are "struggling" in mid life are those who
made bad choices. They abused drugs, had kids out of wedlock, or didn't make a career for themselves.
Often, they spend poorly – on luxury items and consuming excessively.
I live now just like how I did when I was a poor student – with a carefully limited budget
and spending within my means (more on experiences than products). I save 80% of my income and
plan to retire early. More people can do the same.
My mentor/hero bought a fixer upper house that she repaired by herself. She bikes to work every
day in the snow, and buys her clothes from thrift stores. She makes a six figure salary.
Save for an uncertain future, folks, and you won't find yourself in dire straits later on in
life.
For most of the 19th century, just about everywhere, nobody who worked for a living expected
to live long enough to retire.
I suspect your children or your extended family, were your retirement if you lived long enough
pre-20th century times. Also I cannot imagine there was any sort of defined retirement prior to
20th century for the masses. People simply did whatever they could within their families until
they couldn't. Work loads probably just decreased with the fragility of old age.
Also many people did live long lives. IIRC, heavy mortality was primarily concentrated in children
and childbirth and maybe the occasional mass epidemic or bloody war. Dodge those and you could
probably live a fairly long life.
Quite right; there was a bimodal or multimodal curve, which is why mean averages of life expectancy
are not all that enlightening. But the fact is that most people who worked or fought, worked or
fought their whole lives, until they were incapacitated; then there was their family, or the Church,
or the poorhouse, or starvation, usually leading to mortal illness, if it had not done so before
then.
The other side of that story is that the old folk were there as part of the social and economic
unit: helping to pick the harvest with the very youngest; sharing skills and knowledge across
four or five generations, century after century-rather than being shuffled off to die in some
wretched cubby, doing "retirement" things. There's a terrific little book, Peter Laslett's The
World We Have Lost, that gives a well-sourced and interesting picture of pre-industrial family
life that pushes people to overcome some of their self-satisfaction about this kind of thing.
I remember reading where they found a Neanderthal remains that showed that this guy was definitely
disabled to the point where he couldn't have survived alone. Which means someone else helped him
live longer.
That's what humans have always done pretty much, before money. People paid in by being part of
society, and then their community helped them later. Social insurance is just the money big civilization
version of it isn't it?
I'm just thinking of the people with aging parents and children with parent cosigned student
loans And what if they were responsible for paying the $90,000+ / year nursing home payment and
all the medical bills, instead of Social Security, Medicare, Medicaid On top of trying to help
their kids get through college.
The whole scenario is a bad joke and getting worse.
There wasn't 15-20% of the population expecting to live 30 years in retirement and the next
generations to pay for their still mortgaged McMansions and trips to the tropics.
I have no issues paying for retirees. I have issues with asking the younger generations to
pay for lifestyles that are bigger than theirs. The Western retirement lifestyle is too energy
and resource intensive.
I don't think most people collecting a social security check actually have a big lifestyle,
much less trips to the tropics, that's a Charles Schwab commercial, not a reality for most people.
What Social Security has done is mostly reduce the number of old people living in poverty. Ok
so young and middle age people are still living in poverty, making everyone live in poverty including
people that are old and frail and sick is not an improvement. Are retired people's lifestyles
actually shown to be more energy intensive, I think in many ways they would be less so, ie not
making that long commute to the office everyday anymore etc..
Sorry, but your comment is delusional. It is impossible for someone retired on only Social
Security to "pay for their still mortgaged McMansions and trips to the tropics". In what universe
is that possible on a MAXIMUM annual income of less than $32,000? Googling "maximum social security
benefits" generates the following info:
"The maximum monthly Social Security benefit payment for a person retiring in 2016 at full retirement
age is $2,639. However, the maximum allowable benefit amount is only payable to those who had
the maximum taxable earnings for at least 35 working years. Depending on when you retire and how
much you made while working, your benefits may be considerably less. The estimated average monthly
benefit for "all retired workers" in 2016 is $1,341."
I suspect a lot of people (younger than boomers) might be still mortgaged to a small degree
when they retire as housing costs have gone up so that people can't afford a mortgage when they
are young, so if they buy real estate at all it's at middle age, buy the first home in their 30s
or 40s or 50, for a 30 year mortgage. But McMansions have nothing to do with that.
The income distribution table shows that the younger retirees 65-75 are not suffering when
compared to the working population they seem to have a good thing going for them
Merging all these data points, it becomes quite apparent that there is a large percentage of
retirees who still carry debt while collecting social security.
Increasing social security to some group means making another group pay
As usual, the abuse of history is the outstanding credibility-buster in this piece. When
an author says this,
Nobody anticipated in the 19th century that people would have to pay for their own retirement.
That was viewed as an obligation of society.
why should I believe anything else that he has to say?
The sole instance given is of Bismarck's Germany, actually ground-breaking in its social
welfare policies, which came only in the last part of the 19th century.
For most of the 19th century, just about everywhere, nobody who worked for a living expected
to live long enough to retire.
Indeed, retirement in past centuries had a different denotation. Its common use was among
the aristocracy, when one of that number determined to remove himself from active (urban) social
or political life and withdraw (hence the etymology, "re-tirer"), usually to the country.
Historically, he is right and you are entirely wrong, which is not surprising as Michael Hudson
is originally a philologist and historian and has specialised in economic history.
The modern conception of retirement is mostly a 20th Century invention, but throughout history,
there are many versions of 'retirement', and they were almost always paid out of current expenditures.
Roman soldiers were paid lump sums and frequently given land on reaching retirement age through
the Aerarium Militare. Militaries throughout ancient and medieval history had similar schemes,
and not just for officers, but again, these were rarely if ever paid out of a contribution scheme
– it was considered an obligation of the State.
In many, if not most societies, it was accepted that aristocratic employers and governments
had obligations to elderly staff – for example, fuedal workers would keep their homes when they
were no longer capable of working, and this extended well into the 19th Century. Organised religions
would almost always have systems for looking after retired religious members, again, always paid
out of current revenues, not some sort of investment fund. The concept of a fixed retirement age
(outside of the military) is a relatively modern one, but the concept of 'retirement' is not modern
at all.
This is the worst strawmanning bull**** I have seen in a while; it is simply infuriating. I
don't have the time to put all of what follows into perfect order, but here's what I can tap out
in a minute or two.
If, PK, you are trying to prove that some people in the past have stopped work and still gotten
paid, as part of their lifetime compensation for the work they have done, and that this is, de
facto, compensation during what we would now call "retirement," you win. Straw man knocked
over.
So let me again quote what Hudson says, just so your argument can be demonstrated as the pointless
distraction that it is:
"Nobody anticipated in the 19th century that people would have to pay for their own retirement.
That was viewed as an obligation of society."
That couldn't be clearer. "Nobody anticipated," as in "nobody." Meaning it was a generally
accepted social value that . what follows. What follows is "people," as in "people"; not just
soldiers, or priests, or servants; "people," ie, Gesellschaft; and then, "their own retirement,"
(which can only imply a period when they were old enough still to do something productive that
earned money, but chose not to, instead; because otherwise it would be called "disability," right?).
"That was viewed as an obligation of society," meaning, it was a right, not a privilege or gift
or compensation, and it was universal, because it applied to "people," and "nobody" thought otherwise.
There is just nothing there that is justifiable in any way based on the history of the nineteenth
century. The only exception is Bismarck's Germany, which is adduced as proof of the statement,
which is totally insupportable on its face.
If you stand by that, and are trying to suggest that "retirees," meaning as a group everyone
in society beyond a pre-defined age, as opposed to the disabled, were ever perceived as having
a societally based right to welfare support before the very late nineteenth or early twentieth
century, and that only in a very few, very advanced places, you fail three times over.
You do this in classically ahistorical ways: you conflate Gesellschaft with Gemeinschaft; you
adduce the military of the ancient world, which is just hilariously anachronistic, but even those
prove you wrong when examined closely; you completely misconstrue the rules of the corporately
organized ancien regime, which by the way was ancient history as far as the post-Dickensian industrializing
Europe that Hudson speaks of; you adduce the military and the priesthood as if they were representatives
of "society" as a whole, which they were not–they were adherents of the body that made the rules,
and liked to keeps its friends close, and could reward them. The same, while you are at it, was
true of some different varieties of public servants–but not many, and again, not before the late
nineteenth century, and certainly not in the US:
"Like military pensions, pensions for loyal civil servants date back centuries. Prior to the
nineteenth century, however, these pensions were typically handed out on a case-by-case basis;
except for the military, there were few if any retirement plans or systems with well-defined rules
for qualification, contributions, funding, and so forth. Most European countries maintained some
type of formal pension system for their public sector workers by the late nineteenth century.
Although a few U.S. municipalities offered plans prior to 1900, most public sector workers were
not offered pensions until the first decades of the twentieth century. Teachers, firefighters,
and police officers were typically the first non-military workers to receive a retirement plan
as part of their compensation."
Your ad hominem appeal to Hudson's authority as a historian is amusing: it is actually
not surprising that Hudson is wrong, and I am right; because he is an economic historian,
with a special faculty, apparently, for conducting contemporary policy polemics; and I would be
happy to give you my professional authority, except that this is the internet, so appeals to professional
authority don't mean anything at all, but I'll just put it to you that it is more than sufficient;
but leaving that aside, I am without a polemical agenda, except just this one: that the past needs
to be respected in its totality, and that even when being used to score points in contemporary
policy arguments. I know which of us has more credibility here just by reading Hudson's sentences,
which are devoid of historical meaning or sensitivity; and I know that I, as a historian, would
never knowingly misuse the past to make a point about the present, because that is being a bad,
bad doctor.
You bring up three cases: military, clergy, and servants. Those are exactly not what
Hudson is talking about when he mentions Bismarck, or the nineteenth century, or retirement and
its old age provisions as a whole, so you basically proved my point just by failing to address
the actual argument. What Hudson is referring to-because he says so with his one example-is the
Bismarckian "Gesellschaft" obligation to what had in previous centuries been called the the third
estate in generic terms. Not, mind you, the first and second estates and their servants and adherents.
If Hudson were talking about pensions for the military, he would have said so, and his argument
would have ended there, in a paragraph, because they are fully protected in that regard and have
been, at least more than the average citizen, since the GI Bill. Pensions for the military is
not part of some kind of "social obligation" for retirees; it is a reward for long service, and
therefore not some kind of "right of social welfare," but a kind of compensation, and it was not
much, at that, in the 19th century.
The regular clergy, which made up most of the clergy until the dissolutions, did not retire:
their jobs were for life, because they lived a life of prayer, and that was not something that
ever ended. The Church supported all clergy as a corporate, spiritually mandated obligation,
not as a generalized "social obligation" like social security, or what Bismarck instituted.
If your point is that certain corporate groups took care of their privileged members when they
no longer worked, that is one thing; if your point is that "retirement" as a condition that merited
social welfare, in general, the clergy don't make that for you. They were exceptions to the general
rule that people had to fend for themselves, a rule that applied to the entire third estate by
definition from time immemorial.
Lastly, servants: those who "retired" in the nineteenth century very often did not have the
same treatments as servants in the ancien regime, many of whom died in harness in any case. But,
if their employing families did continue to provide for them, they did so not out of a sense they
were meeting the "obligation of society to the retired," but as a matter of family or community
duty, noblesse oblige. It was completely at the mercy and discretion of the family involved. It
was a matter of personal honor, and still is, when servants have been your friends and companions
and have prepared and eaten the same food you have, and cleaned your mess and watched your back
and brushed your horses and trained you to ride, and seen your youthful foolishness, sometimes
for generations. Those are not "obligations of society"; they are personal and family and moral
obligations. So Cato the Elder took some heat for his recommendations on discarding old and broken
down slaves, but nobody suggested it was up to the Republic to pay for them instead. Since you're
going to the ancient world, you might better have used that example than that of the soldiers.
And so all that is what Hudson is not talking about. He's talking about Bismarck's
social security as a moral precedent, reflecting a widely held belief in the popular right to
a social safety net after a certain age.
So of course some people were "pensioned." They were called "pensioners," and many of them
were not at all "retired," but had gone on to work at other things, like soldiers who opened up
fish-and-chips shops (q.v.). That does not mean that there was ever a Gesellschaft-like concept
of "retirement" as a condition that brought the right to support by the commonwealth; not before
Bismarck. That's what Hudson's reference tries to imply, that such a concept was common in the
19th century, at a widespread societal level in Western Civilization, and it is provably, demonstrably,
obviously wrong. If it weren't, why would the Old-Age Pensions Act 1908 have ever been passed?
"Nobody anticipated in the 19th century that people would have to pay for their own retirement.
That was viewed as an obligation of society."
You simply cannot construe that to have any truth, given the facts of the century. You can
straw-man me about the concept of "retirement" all you like, although you are still wrong there,
because the groups you name aren't people who "work for a living," which is the third estate;
they are the first and second estates, and their adherents: those who fight for a living, and
pray for a living, and those who obey them.
So the fact remains that Hudson's statement was just polemical fluff, and no historian worth
the name should have uttered it. I guess I'll sit here and wait for his response, because yours,
well .
"He didn't call FICA wage withholding a tax, but of course it is."
This just drives me to apoplexy. 1, that it is not called a tax, and 2, that wage taxes are
never ever reduced.
Incessant yammering about "incentives" – but doesn't a wage tax disincentivise both employers
and employees with regard to wage work? – – Endless talk about how CEO's can't do ANYTHING unless
their taxes are REDUCED!!!!!!! But somehow .that just goes out the window when it comes to wages
– TAXES MUST GO UP.
Cheney – deficits don't matter .except apparently with regard to social security ..
The other scam about FICA and its "separate" funding is that social security being in balance
is OH SO IMPORTANT – deficits will be the death of it. Yet the general fund is in deficit (see
Mish today for a bunch of stuff on the hypocrisy of repubs on the deficit) and ever more deficit
and nobody seriously cares about it or worries about it. MONEY can always be found for invading
for Iraq, and paying for invading anybody is NEVER a problem. Feeding old folks, on the other
hand, sure strains the resources
Its like it is as important to keep a reserve army of the impoverished as it is to keep the empire.
FD -'This just drives me to apoplexy' Breathe, buddy.
Yes, mate, feeding old folks – looking after the oldies so they have health care, decent food
and a home.
How well each country does it reflects their views on whether it's a social obligation. For
many countries, there is no safety net and families provide the care, if they can.
It's becoming that way in the west too. I don't see many governments increasing welfare for
our poorest people, benefits are being gutted and those that did save for retirement are seeing
their funds looted and zero interest paid
Life in Indian joint family is great- no retirement work- food for life for a member- great
lack of boredoms and lonely depressions- life, life ,- exquisite vegetarian food fit for Gods-
low tech human scale towns- GREAT TO BE ALIVE ON 3 dollars a day! This talk of retirement and
working and senior junior savings is so pathetic that my sex drive just evaporated into thin air
reading it! Get a life.
It's good to read Michael Hudson's call-out of FICA as a mechanism to crush workers and transfer
wealth to the already rich.
FICA is indeed the worse sort of deductive reasoning. It is based on the premise that the rich
are entitled to be rich, and that the masses want to take their money from them. In America in
particular, wealth has historically been based on grants from the sovereign to loot the commons
(timber, agriculture, mineral extraction, railroads, military procurement, data mining, etc.).
These grants to loot the commons have nearly always been based on corrupt practices of cronyism
and bribery. Alchemists like Greenspan simply provide theo-classical mumbo-jumbo after-the-fact
justification for their piracy.
Ironically, I was just reading about impending failure of the Oroville Dam, a prime example
of America as the seat of greed. It was well-known that the spillways were inadequate and crumbling
due to 50 years of use. However, the Reagan-ites of Southern California refused to tax themselves
in order to save Oroville and Yuba City, 450 miles away.
It's sad that everyone, especially the rich, think that they can blow-up the United States
and then fly to their bolt-hole in New Zealand or Australia - or if you're not so rich to a shack
in Panama or Thailand. I suspect that we will soon find ourselves to be unwelcome pariahs in those
places.
How is FICA a redistribution to the wealthy? If anything, what you pay in buys you a share
of the distributions when you retire. That means the output is roughly proportional to the input
you contribute. The wealthy stop contributing after roughly the $120,000 limit, but that doesn't
mean they take an outsized distribution. They take home exactly the same (pre-tax) as someone
who only made $120,000 per year.
If anything there's a bit of redistribution behind the scenes that favours the poor. See my
earlier post. If you make too many changes to Social Security such that it becomes another welfare
program, it will lose its popular backing and eventually get axed.
Neoliberalism is OUT-DATED. Rather, for the past four decades, it's been fiat currency for
the .01% and gold standard straitjacket ideology for everyone else.
"The mainstream view is no longer valid for countries issuing their own non-convertible currencies
and only has meaning for those operating under fixed exchange rate regimes,
'The two monetary systems are very different. You cannot apply the economics of the gold standard
(or USD convertibility) to the modern monetary system. Unfortunately, most commentators and professors
and politicians continue to use the old logic when discussing the current policy options. It is
a basic fallacy and prevents us from having a sensible discussion about what the government should
be doing. All the fear-mongering about the size of the deficit and the size of the borrowings
(and the logic of borrowing in the first place) are all based on the old paradigm. They are totally
inapplicable to the fiat monetary system' (Mitchell, 2009).
We might now consider the opportunity afforded by the new monetary reality, effectively modelled
by MMT. A new socio-political reality is possible which throws off the shackles of the old. The
government can now act as a currency issuer and pursue public purpose. Functional finance is now
the order of the day. For most nations, issuing their own fiat currency under floating exchange
rates the situation is different to the days of fixed exchange rates. Since the gold window closed
a different core reality exists – one which, potentially at least, provides governments with significantly
more scope to enact policies which benefit society.
However, the political layer, in the way it interacts with monetary reality, has a detrimental
effect on the power of democratic governments to pursue public purpose. In the new monetary reality
political arrangements that sprang up under the old regimes are no longer necessary or beneficial.
They can largely be considered as self-imposed constraints on the system; in short the political
layer contains elements which are out-of-date, ideologically biased and unnecessary. However,
mainstream economists have not grasped this situation – or perhaps they cannot allow themselves
to- because of the vice-like grip that their ethics and 'traditional' training has on them.
MMT provides the best monetary models out there and highlights the existence of additional
policy space acquired by sovereign states since Nixon closed the gold window and most nations
adopted floating exchange rates. We just need to encourage the use of the space to enhance the
living standards of ordinary people."
Heterodox Views of Money and Modern Monetary Theory (MMT) by Phil Armstrong (York College)
2015
A new socio-political reality is possible which throws off the shackles of the old. The
government can now act as a currency issuer and pursue public purpose. Functional finance is
now the order of the day. For most nations, issuing their own fiat currency under floating
exchange rates the situation is different to the days of fixed exchange rates. Since the gold
window closed a different core reality exists – one which, potentially at least, provides governments
with significantly more scope to enact policies which benefit society.
What I especially like about your post is that it finally takes the mask off and openly admits
what everyone who tries to learn about MMT has realized at once: that for all of its utility in
understanding money systems, it is designed and propounded with an agenda: to undermine the mores
underlying centuries of private-property-based liberal capitalism. Those mores, which remain more
than illusions despite the encroachments of central banks, are the last barrier to prevent state
capitalism from becoming completely authoritarian, because as long as "taxation" is, at least
theoretically, the limit on state spending and therefore power, then "representation" actually
means something, and so representative democracy and property rights, which are the keys to a
functioning productive civil society and underlie all human progress for eight hundred years,
can survive a bit longer.
The very real and useful core of MMT, which describes what we see happening since the gold
standard fell, and is therefore unimpeachable from a certain objective turn of mind, is Janus-faced.
On the one hand, it acknowledges what the Framers knew intuitively when they gave the Federal
government the power of issuing money: the sovereign makes the money. On the other, as often used
here, and especially in your comment, it is a rationale for a government unrestrained by property
rights and representative constraints on its power of expenditure. That will not end well, simply
because it will not last long, and it will end in a military despotism or landed aristocracy (if
you're lucky). Because it always has, and you are not going to change that, are you?
In one of the recently discovered lectures (1940) by Karl Polanyi, in referring to post-war
Europe (post 1918) he argued:
"The alternative was between an integration of society through political power on a democratic
basis, or if democracy proved too weak, integration on an authoritarian basis in a totalitarian
society, at the price of the sacrifice of democracy."
It is still the same issue today which PhilM nicely illuminates when he states: "..What I especially
like about your post is that it finally takes the mask off and openly admits what everyone who
tries to learn about MMT has realized at once: that for all of its utility in understanding money
systems, it is designed and propounded with an agenda to undermine the mores underlying centuries
of private-property-based liberal capitalism. These mores, which remain more than illusions despite
the encroachments of central banks, are the last barrier to prevent state capitalism from becoming
completely authoritarian, because as long as "taxation" is, at least theoretically, the limit
on state spending and therefore power, then "representation" actually means something "
The national security state already has a potentially totalitarian hold on us and in the future
the MMT scenario "as a rationale for a government unrestrained by property rights and representative
constraints on its powers of expenditure" might nicely finish us off.
It would no longer be the neo-liberal present where the whole of society must be subordinated
to the needs of the market system, but the other extreme, where the whole of society must be subordinated
to the needs of the state supposedly working in the "public interest."
it is designed and propounded with an agenda: to undermine the mores underlying centuries
of private-property-based liberal capitalism.
You say that like it's a bad thing :-)
the last barrier to prevent state capitalism from becoming completely authoritarian
State capitalism? If this is supposed to be a topical reference I don't get it.
as long as "taxation" is, at least theoretically, the limit on state spending and therefore
power, then "representation" actually means something
How so? Did "taxation" restrain Bush from spending trillions on invasions? Can't you have representation
without taxation?
representative democracy and property rights, which are the keys to a functioning productive
civil society and underlie all human progress for eight hundred years
I thought that was the Catholic Church
"Property rights"-the private monopolisation of the gifts of nature-at least in their traditional
form, seem to me to be the third fundamental flaw in our political economy, along with Capitalism
(narrowly defined) and our bogus monetary ludibrium. We need a new Church.
MMT: great stuff. With you 100%. The issue is corruption and this culture of privilege and
corruption we live in. You better believe the government will be issuing currency for other than
the public interest. The fact is we live in an MMT economy now, it's just that the currency created
by the government is being passed out to the ethnically privileged .001%. The talk of deficits
and national debt is all a smoke screen to cover up this fact. It is way past time to educate
the masses on this theme, kudos to Michael Hudson & Steve Keen.
One part of society parasitical on the productive part .. starts small. $1 per $1000, then
$10 per $1000 until it gets to $1000 per $1000. Neither bought politicians, nor bought citizens,
stays bought.
Of course we shouldn't expect women and children to work that is destructive of reproduction
and child raising. Some women should work some children should work but only a few. Otherwise
obvious system dynamics will reduce the net population in quality and quantity.
You're going to privatize the roads, so that now you're going to have to pay to use the
road to drive to work, if you don't have public transportation.
This is a zero-sum game for the elite. They're already soaking us. If they soak us on tolls,
they'll have to take less money soaking us another way.
In contrast, Fed Gov reducing spending is not a zero-sum game for the elite. That means less
money to be soaked up from the public. Unless of course, the public compensates by taking out
more private debt. In which case, ka ching for the elite again.
That said, I don't think the mind-set really is to reduce Fed Gov spending. Rather, the mind-set
is to reduce entitlements so that other Fed Gov spending can be increased, namely on defense,
intelligence communities, etc. And I really don't think the elite have much of a dog in that fight.
After all, the elite suck up all the money regardless of how it's spent by the Fed Gov. So my
guess is that this campaign to reduce entitlement spending is being waged by the other agencies
in the Fed Gov and the eco-system that feeds off them.
In the 1980s Greenspan pushed for massive increases in FICA. And Reagan spent it on Star Wars.
Recently I've read that that wasn't really a missile shield project but a cyber technology project.
Today we read that the CIA has disseminated all this accumulated and obsolete technology; leased
it out to private contractors; or variously bribed the Europeans with it. Etc. Fast-back to the
1930s and FDR took the same SS money for WW2. In the 60s, JFK agonized about the budget and the
value of the dollar and could see no reason to go into Vietnam, but oops. LBJ bulldozed through
Congress our Medicare plan, which upped SS contributions, and he went promptly into Vietnam, spending
it all and stuffing the retirement funds with treasuries. Shouldn't we all be looking at how transitory
these achievements (or disasters) have been. Maybe nothing more than boosting the economy for
a few years every other decade or so. Money could achieve much more than this if we accepted as
fact the fleeting benefits of misspending it and instead concentrated on a steady economy benefiting
all. Hubris rules, but it doesn't ever make things better.
'it's a myth that Social Security should be pre-funded by its beneficiaries' - Sharmini
Peries
If it's a myth, it's one that's incorporated in the Social Security Act of 1935, as well as
(for private pensions) the ERISA Act of 1974.
After about a century of experimentation, we know how to fund pensions securely: estimate the
present value of the future liability using an appropriate discount rate, and then keep it funded
on a current basis.
Social Security grossly violates this model in three respects. First, it is only about 20 percent
funded, headed for zero in 2034 according to its own trustees.
Second, because Social Security does not avail itself of the Capital Asset Pricing Model developed
in the 1960s, it invests in low-return Treasuries, which causes required contributions to be cruelly
high. Had Soc Sec been invested in a 60/40 mix of stocks and bonds, FICA taxes could have been
half their current level and funded higher benefits.
Third and finally, Social Security is treated as an off balance sheet obligation in the Financial
Report of the United States. Unlike the legally enforceable obligation of private pension sponsors
to make good on their promises, the government refuses to take responsibility and put itself on
the hook. The Supreme Court has ruled that Social Security essentially is a welfare program, which
Congress can cut back or cancel at will. So much for "security" - there isn't any.
Social Security is part of a general pattern of government taking a sleazy, second-rate approach
to its social promises, by exempting itself from well-established prudential rules mandating best
practices. Frank Roosevelt wanted his constituents to be forever dependent on the kindness of
perfidious politicians. He got his wish.
>we know how to fund pensions securely: estimate the
C'mon Jim you can do better than that. Here is dictionary.com, do you see the problem with
your statement?
know:
verb (used with object), knew, known, knowing.
1. to perceive or understand as fact or truth; to apprehend clearly and with certainty:
estimate
verb (used with object), estimated, estimating.
1.to form an approximate judgment or opinion regarding the worth, amount, size, weight, etc.,
of; calculate approximately:
When you lend money to the profligate, they are happy. When you ask to be repaid, they are
furious. It turns out that is just as true when workers who payroll taxes on their whole income
"lend money" to the wealthy by paying excess amounts to the SS trust fund which in turn, enabled
tax cuts for the wealthy. The wealthy are incensed that the SS trust fund, which has "lent" trillions
to the treasury is now demanding to be "repaid" with interest.
That's the trick about S.S. that gets me. You cannot pay in 15% of your income with some amount
of reasonable compounding interest for your entire career and not have a massive nest egg at the
end. But the math is done straight up such that there never was interest on the payments, so we
are entitled to very little, despite every other form of investing on the planet returning some
kind of interest.
It's one of the reasons I argue for a Sovereign Wealth Fund to retain and manage all SS recepts,
so at least the contributions and return on investment are accounted for in plain sight, so nobody
can bait and switch.
And heaven forbid the Sovereign wealth fund could also be used as government bank that loans
(our) money direct to citizens, without private banks getting a cut.
It ain't utopia, but it is a way of playing their game and still winning results and the pr
war even in the face of the most anti-sociailst conservative.
We need to keep up with the Feudalism 2.0 Moniker.
We continue to refine society towards only 4 classes of people:
Warlords/Politicians
Productivity Owners
Rent Extractors
The Oppressed
Over the last 35 years the productivity owners have been making a run, vacuuming up all the
productivity improvements leaving everybody else stagnant, before considering inflation, but with
the robotic age coming, they are just getting warmed up.
>but with the robotic age coming, they are just getting warmed up.
Hmmm.
Henry Ford II: Walter, how are you going to get those robots to pay your union dues?
Walter Reuther: Henry, how are you going to get them to buy your cars?
Apparently not an actual quote, but one Reuther certainly endorsed.
You know "they" are just planning to kill 2/3 of us off, don't you? The elite are evil and
sure many of them are stupid, but far from all of them.
"You're turning the economy into what used to be called feudalism. Except that we don't
have outright serfdom, because people can live wherever they want. But they all have to pay to
this new hereditary 'financial/real estate/public enterprise' class that is transforming the economy."
Spot.On.
From Marx's "Capital", Chapter 26 (The Secret of Primitive Accumulation):
"The industrial capitalists, these new potentates, had on their part not only to displace
the guild masters of handicrafts, but also the feudal lords, the possessors of the sources of
wealth. In this respect, their conquest of social power appears as the fruit of a victorious struggle
both against feudal lordship and its revolting prerogatives, and against the guilds and the fetters
they laid on the free development of production and the free exploitation of man by man. The chevaliers
d'industrie, however, only succeeded in supplanting the chevaliers of the sword by making use
of events of which they themselves were wholly innocent. They have risen by means as vile as those
by which the Roman freedman once on a time made himself the master of his patronus.
The starting point of the development that gave rise to the wage labourer as well as to
the capitalist, was the servitude of the labourer. The advance consisted in a change of form of
this servitude, in the transformation of feudal exploitation into capitalist exploitation. "
The drive to "efficiency" produced monstrously perverted results in IT hiring. Design for 100% match of the resume is absurd.
Notable quotes:
"... Back in the mid/late 90's, there was a running joke that tech companies were looking for people with more years of experience with certain programming languages than the programming languages even existed ..."
"... That's a very good and historically accurate point (in 90th Java was a crush ;-). And this type of parasitism continues to flourish even now. ..."
"... Also it is not necessary to have exactly all the asked experiences, at least when your resume will be selected/reviewed by a human. Of course if the recruiting process has been made "efficient" that will filter resumes by strict criteria, then the honest/modest applicants will be disproportionately screened out. ..."
"... In a lot of big corps, the early stages of recruiting (processing/screening incoming resumes) are often outsourced to HR who obviously have little idea about the subject matter of the work, and can only go by buzzwords, possibly using computer software (OCR processing of resumes). ..."
"... I can tell you that, from a consulting standpoint, I have been on several contracts where we've interviewed someone who had great skills, and the person who showed up had zero. So now companies will Skype with people to make sure they're talking to the actual consultant. ..."
"... Sadly, that is true of far too many companies of all sorts today, who refuse to train their workers and expect them to come preprogrammed with the company's proprietary software. ..."
"Back in the mid/late
90's, there was a running joke that tech companies were
looking for people with more years of experience with certain programming languages than the programming languages even
existed (in a form to be usable for commercial work)."
That's a very good and historically accurate point (in 90th
Java was a crush ;-). And this type of parasitism continues
to flourish even now. Just with the new buzzwords...
When employee's complain that that can't fill open positions
that often means that they painstakingly define the position
is such a way that the person deemed suitable can hit ground
running on the first day or week on the job. No retraining
period is needed. Like a new brake pads in a car. Totally
replaceable.
To say nothing that in reality Google and other giants
(Amazon, Microsoft, Facebook, etc) are to a large extent
"cemeteries" for IT talent. What's so exciting is creating
Gmail and many other Google products ? Absolutely nothing.
This is a pretty disgusting reimplementation work.
One issue that you both don't mention is lags. Translating a
demand for skill into available skill takes years to decades
in the best of circumstances. Even for many so called "low
skilled" jobs, people have to be trained commonly for several
years. For "knowledge work" or "new technology paradigms",
you basically have to bring up a new generation of
school/college graduates.
Expecting training to happen
"just like that", or to be funded by the workers themselves,
is a non-starter.
And when the business has to pay for the training (with
the risk that some of the cost cannot be recouped because
trained up people may leave), then we are back at "lack of
profitability".
Back in the mid/late 90's, there was a running joke that
tech companies were looking for people with more years of
experience with certain programing languages than the
programming languages even existed (in a form to be usable
for commercial work).
"Back in the mid/late 90's, there was a running joke that
tech companies were looking for people with more years of
experience with certain programing languages than the
programming languages even existed (in a form to be usable
for commercial work)."
The trouble is, I think that was no
joke, it was literally true. Which means that were
deliberately recruiting liars. Maybe that explains a lot.
Yes, the joke was based on true anecdotes. Not sure about
"deliberately", my most plausible assumption is that they
just plugged the "skill" description into the standard job ad
templates.
Looking for about 5 years experience - enough to
(presumably) be able to do stuff, but not yet too
old/tainted.
Also it is not necessary to have exactly all the asked
experiences, at least when your resume will be
selected/reviewed by a human. Of course if the recruiting
process has been made "efficient" that will filter resumes by
strict criteria, then the honest/modest applicants will be
disproportionately screened out.
In a lot of big corps, the early stages of recruiting
(processing/screening incoming resumes) are often outsourced
to HR who obviously have little idea about the subject matter
of the work, and can only go by buzzwords, possibly using
computer software (OCR processing of resumes).
I have heard
the story often that hiring managers are presented with
unsuitable resumes/candidates, and often find better matches
going through the raw data themselves. But that costs time
("inefficient").
I can tell you that, from a consulting standpoint, I have
been on several contracts where we've interviewed someone who
had great skills, and the person who showed up had zero. So
now companies will Skype with people to make sure they're
talking to the actual consultant.
Sadly, that is true of far too many companies of all sorts
today, who refuse to train their workers and expect them to
come preprogrammed with the company's proprietary software.
That's the title of
my latest piece
in Inside Story. The crucial para
The term "credentialism" is used in many different ways, some of them
contradictory, but the implication is consistent: too many young people are
getting too much formal education, at too high a level. This implication was
spelt out recently by Dean Ashenden, who contends that "education has not
just grown to meet the expanding needs of the post-industrial economy, but
has exploded like an airbag." The claim that young people are getting too
much education, and the supporting critique of credentialism, is pernicious
and false.
The suffix "-ism" hits my hot button- unless it's optimism. It denotes the
ossification of of an idea that may once have been dynamic.
I tend to look at ideas through the prism (oops!) of life-cycles. There's a
time, perhaps, at the "mature" stage, where codification becomes the norm.
After that- particularly when organisations become corporatised in an attempt
to revitalise them (eg Trumpism)- codification becomes essential for the
masses, but discretionary for the bosses. Luckily, it tends to be
contemporaneous with the development of new systems, as you indicate, where the
activity hasn't matured sufficiently to be credential-ivied.
I'm trying to tackle this in a book on "Concepts in Innovation and Change"-
first 8 chapters for free download and feview at my website
http://www.thepicketline.net/innovation.
"The stress on formal credentialism – the specific requirement for an
educational qualification to be a member of a defined profession – is a
phenomenon whose time has passed."
I'm in the "yes, but" camp.
First, credentialism may be well-established in primary and secondary teaching,
but that doesn't mean it isn't a problem. There is a significant shortage of
secondary STEM teachers, and a fair surplus of 40-year old engineers and
military types, many of whom are skilled at dealing with the young. But they
lack formal ed training, which can be a significant barrier in many districts.
Second, much advanced education in universities does not go on in classrooms. I
got my Ph.D. in chemistry. The first year was classrooms and picking a research
advisor. The next 3-5 years were all in the lab: pure apprentice work. When we
got out, nobody was interested in our classroom grades.
Third, although I'd be the first to admit that general higher education skills
are very useful in the workplace, I'm very skeptical about any classroom
teaching of specific job-oriented skills. Apart from accounting, what skills
does an MBA acquire in a classroom? Every law firm thinks their rookie lawyers
are completely untrained, and the second and third years of law school are a
waste. (Indeed, Yale Law School turns this into a point of honor: barely trying
to teach law.) Medical training is two years of classroom and interminable time
in the hospital wards. Engineering may be the exception.
I agree very strongly with the second part on education not being a panacea for
inequality.
I don't think credentialism has to imply 'too many young people
are getting too much formal education, at too high a level'. I see it as
pathology of managerialism in hiring practices which sets irrational
requirements for candidates for jobs. It doesn't have to mean formal
credentials and is perhaps more typically years of experience in a specific
role. (To be a barman you two years experience of bartebding etc). Unpaid
internships and gap year/CV-boosting stuff maybe also qualify.
Imo credentialism is a real problem and it's also a problem that the
expansion of higher education (which I agree is a good thing) has gone hand in
hand with the tightening grip of a brutally instrumental view of the purposes
of education, as a process that socialises nascent wage-labourers for a life of
wage labour. So I don't think it's too jaded to see the vaunted expansion of
'educational opportunities' in the last couple of decades as little more than
an arms race for access to an ever-dwindling number of marginally privileged
positions within an increasingly exploitative system of production funded by a
burgeoning debt burden on workers.
It doesn't have to be this way! But I fear that equating credentials (i.e.
formal or informal qualifications explicitly demanded by employers for a
specific economic role) with education (study, reading, learning, the life of
the mind, ) may not be conducive to progress here.
If a lurker may comment: I hate to say this, but I completely disagree. I am a
person with quite a lot of education who none the less works in a low-level
accounting position, and I am completing an accounting certification.
Things I've observed:
1. Accounting for most lower level roles is best learned on the job. None of
the formal accounting that I've studied has very much to do with the actual
work I do. Most of what I do is highly specific to the place I work, and had to
be learned bit by bit on the job.
2. I started getting my accounting certificate because although I had
"apprenticed" with someone up the ladder and had learned enough to move on, I
was informed that without a certification I could never be hired, no matter
what experience I had.
3. My accounting certification program requires a long, long list of
"information science 101"-style classes which are the most godawful, banal,
fraudulent, pro-corporate things I've ever seen. "Read this short article about
self-driving cars"-level terrible. We often receive actively misleading
information. This is in a nationally known program which boasts of its
connections to fancy accounting firms.
4. I only got into my current job by a fluke – it's not classed as a regular
accounting gig, so they were willing to hire me based on .my experience of
accounting. Experience I'd acquired in my previous not-formally-accounting job
by volunteering to learn new stuff.
5. My employer has terrible trouble hiring skilled people, because they
require a great deal of certification for entry-level jobs and don't pay that
much. People with accounting certifications, for instance, nearly always start
out earning about $25,000 more than my employer pays entry level workers. But
instead of hiring people who are trainable and have relevant but unspecific
experience, my employer holds out for the credential. As a result, we have a
lot of churn.
6. On another note: I've spent much of my work life in pink collar jumped-up
file clerk occupations. On no occasion did I need college level training for
"database management", using MS Office, etc. That's not how working with
databases goes at the file clerk level. What happens is that you're hired and
then socialized into your employer's specific use of databases. (Also, the kind
of "database management" that you need to do as a file clerk is maybe
creating some kind of Filemaker or Access database – I was allowed to do this
rather than kicking it over to IT because I was an enterprising young person,
but this was not typical of file clerk jobs.)
Most pink collar work is deskilled. You work with databases, but in a very
restricted way that they try to make as idiot-proof as possible. You work with
MS Office, but doing mostly a short list of predetermined things – even if some
of them are obscure, the list itself is short.
I sometimes think that professional class people, because they lack
experience of the day to day of pink collar work and "business" education, are
a little bit vulnerable to talk of new technologies, etc.
I was brought up short by the discussion around "It Takes a B.A. to Find a Job
as a File Clerk".
"Someone seeking a job as a file clerk, for instance, would
be well advised to acquire a knowledge of computer programs such as Microsoft
Office, and an understanding of database management. This is likely to be done
more efficiently in a classroom setting than by osmosis in a busy office."
It is no doubt true that a recent university graduate is guaranteed to have
acquired "a knowledge of computer programs such as Microsoft Office" (not, in
general, of database management). Some of them – hopefully not many! – may even
have waited until university to acquire this knowledge, through some
regrettable failure of their high schools. But spending years at university,
and thousands of dollars in tuition fees, to learn this is massive overkill.
You could learn to use MS Office in a dedicated course in a week or two – or on
your own even faster, depending on your personality. The other 95% or so of the
time and money you've spent on your university training is going to be
irrelevant to your job as file clerk. Even if we grant that it's OK for the
employer to pass the financial burden of training entirely on to job-seekers –
which is kind of the crux of the problem here! – how is it reasonable for an
employer to discriminate against someone for taking the obvious shortcut and
learning all the skills that are going to be relevant to the job without
passing through university?
More broadly, there's no automatic contradiction between jobs now requiring
greater skill and employers demanding unnecessary or excessive qualifications.
Suppose a job that used to need high school levels of achievement now needs
extra skills equivalent to a year's worth of university-level study. There's no
such thing as a 1-year university degree (rightly), so the easiest solution for
employers is to demand a university degree for the post – 2 years of which
would be superfluous to their requirements. That requires would-be employees to
spend thousands of dollars extra of their own money.
When people complain about credentialism, the typical assumption is that many
jobs could be learned on the job, just as well or better as in a class. And
that's often true, even for many fairly difficult and prestigious jobs. But the
second, implicit, assumption is then that on the job training is free. So
people compare the high costs of formal education, and start complaining about
credentialism, or the high wages of teachers etc.
The point is of course that
good on the job training is expensive. It consumes a lot of time of senior
people, and organisations are hesitant to provide too much of it. Higher
education grows not because it is the best way to learn jobs, but because there
is not enough serious on the job training available.
Doctors are the prime example – they are in short demand and highly paid in
most countries, with very different medical systems. Even though many seemingly
qualified people want to be doctors. The bottleneck is never the classroom
education – it's the required apprenticeships and assistent-doctor positions.
People who complain about credentialism are really asking that more job
markets resemble that for doctors, even though they often use the doctors as
the prime example of credentialism gone wrong.
I am quite sure conservatives hate the idea of a more educated population,
since it is harder for them to sell their snake oil. On the other hand, there
really are a lot of jobs now that expect, if not actually require, applicants
to have some college, but where that is not actually needed for the job.
To me the core of what people are talking about with "credentialism" is the
vicious cycle of increased educational requirements for jobs and increasing
average levels of education. Having more educational credentials helps people
get jobs, so people get more credentials, so the level of credentials a given
job asks for rises. Assuming that productivity doesn't actually rise
proportionally with education (which I think is pretty inarguable) it just ends
up meaning an ever-increasing amount of time and resources goes to the
credential-seeking game without accomplishing much.
It seems to me that the usual complaint about credentialism is not that
education is a bad or superfluous thing, but that the credentials presently in
use don't have a lot to do with the work they are supposed to reflect, and are
mostly an artefact of the education industry and the class structure of the
surrounding society. One or more horror-lite anecdotes upon request.
The relative prestige associated with certain degrees from certain schools
implies they are a better indicator of capability, but grade inflation and
cheating scandals in the Ivy League suggest that rather than being held to a
higher standard, students there are often given more leeway to skate by. The
degree is treated with reverence, but in effect can often be little more than a
gold-embossed acceptance letter.
This is exacerbated by the idea (and often reality) that jobs demand
qualifications for applicants that they don't utilize. It doesn't matter if you
didn't learn the things your resume says you learned in college if your
employer doesn't actually need you to do the things they say they need you to
do once you're hired.
Compared to people accumulating mountains of student loan debt and struggling
to find decent jobs, this is a really petty complaint, but: credentialism also
makes higher education worse for students who are interested in more than
getting that degree to unlock the game progression to "a good job."
I
attended a SLAC around the turn of the millennium. I picked that school instead
of a cheaper state school because I bought into the "life of the mind" campus
tour messaging. My professors and fellow students would be personally engaged
with interesting questions across many disciplines! It was true of the
professors, actually. It was also true in smaller elective courses that nobody
attended simply to fill requirements. But in mandatory courses or
"easy-looking" electives there were a lot of seatwarmers who'd complain outside
of class that history or philosophy or whatever was never going to be useful
for a job, so we shouldn't have to take these boring useless courses. I
thought: yes, I too would be happier if you all weren't attending these classes
that just bore and annoy you.
It wasn't until graduate school that I felt like my fellow students were
there primarily due to a thirst for knowledge. It reminds me of the aphorism
that a master's degree is the new bachelor's degree.
Much has already been said, but I assume we're all comfortable with the idea
that spending time at an institution and leaving with a piece of paper is not
the same as education: it's increasingly just a measure of social control,
since you have to pay a fortune to get the piece of paper which probably
over-qualifies you for the job you get. I've heard, incidentally, that
recruiting consultancies (another parasitic life-form) now have software which
automatically scans job applications and rejects all those that don't have very
precise qualifications in the right boxes.
I can't help thinking of my father who had no qualifications of any kind (he
left school at 14 as was normal then) and whose first job after the War was as
a wages clerk in a factory. OK, there was no Microsoft Office then, but he was
expected to work out wages by hand in pounds, shillings and pence, with the aid
of a ready-reckoner. I wonder how many people could do the contemporary
equivalent, even with higher educational credentials. And credentials are
pointless anyway unless they actually reflect genuine abilities that your
education has given you.
Maybe the purpose of a ceredential is not that it's owner knows what is needed
for the job you are offering, but is evidence of a certain level of displine
and intellectual capability. So the odds of hiring someone for whom on-the-job
training doesn't stick, -or who lacks basin self-discipline are greatly reduced
by requiring the credential.
Specifically on databases: there's a number of subtleties on proper database
design [normal forms] that are pretty much impossible to learn on-the-job
because very few people without formal training knows about them.
One more example for the vicious cycle of educational requirements. The
organization my wife spent a fair bit of her career working for had a mixture
of graduates and non-graduates doing the same roles. The graduates were simply
younger – hired when HR mandated (because they could due to the rise in
university education) a degree. While the job was pretty skilled, she never
noticed any difference in ability.
Another example would be that of clerks,
where computerization has reduced the skill level required. File
keeping, tracking orders and book keeping without computers is bloody hard.
@Zamfir: Doctors are the prime example – they are in short demand and highly paid in
most countries, with very different medical systems. Even though many seemingly
qualified people want to be doctors. The bottleneck is never the classroom
education – it's the required apprenticeships and assistent-doctor positions.
Actually the bottleneck in the US and UK is that the doctors' guilds keep
training numbers down. Other countries (i.e. Germany) don't allow them to do
this, and have plenty of doctors as a result. And doctors pay in the US is
anomalous – it's nothing like that in the rest of the world
Third, although I'd be the first to admit that general higher education
skills are very useful in the workplace, I'm very skeptical about any classroom
teaching of specific job-oriented skills.
The Engineering profession will
not allow you to become a full engineer until you have completed a certain
number of years in the workplace.
Count me in with DrDick, Frowner, engels, and the others with their pushback.
In fact, I'll go one step further: I would say that this: "The term
"credentialism" is used in many different ways, some of them contradictory, but
the implication is consistent: too many young people are getting too much
formal education, at too high a level." is, if not a strawman, definitely
straw-adjacent.
Education is a good thing! People getting more education is a good thing.
The term in no way implies what John says it is implying, and I don't often
encounter the argument that we, as a populace, are over educated. This argument
is absurd on its face and easily knocked down. John does a great job of
knocking it down, which would be excellent work if it were, you know relevant.
What I encounter far more often with regards to the term "credentialism" is
basically thus: people have been sold the idea that educational credentials are
the ticket to a good life, a life of economic security where you can have a
good job and raise a family and not constantly worry about the wolf at the
door. However, while there is real absolute value in the education those
credential signal their possessors having, a lot of that value is also relative
and has to do with scarcity. The more people who possess those credentials, the
less they're worth in the job market, which is the reason you got them in the
first place.
And as a result of that you get employers establishing arbitrary and
ever-increasing credential requirements for jobs that absolutely don't require
those credentials, as a way of weeding out the riff-raff. Sure, that position
doesn't require a masters, but if you can advertise it with a masters
and still get forty well-qualified applicants, why wouldn't you do
that?
And this masks the underlying problem, which is that, basically, there
aren't enough good jobs to go around to everyone, and we've constructed a lot
of bullshit hurdles ("Education! Education is the silver bullet!") to avoid
having to deal with that. Education is great. I think post-secondary education
should be available publicly free of charge, like primary and secondary
education is. But even if the college graduation rate were 100% well, someone
has to flip our burgers and work our cash registers, and right now those jobs
aren't considered respectable and they're sure as hell not compensated
respectably.
I will say this: the argument that young people are getting too much
education does hold water if you add a "because" with a good reason after it.
What immediately springs to mind is Paul Campos' ongoing war against law
schools; he advises young people not to go to law school because they'll get
"too much education," but because they'll assume life-destroying mountains of
debt and that the return on that investment won't be worth it.
I sometimes think that professional class people, because they lack
experience of the day to day of pink collar work and "business" education, are
a little bit vulnerable to talk of new technologies, etc.
The example of
this that drives me crazy is computer programmers. The reality is that most
computer programming jobs are not difficult – many of them could be carried out
(and sometimes are) by a smart high schooler. Generally when graduates do these
jobs – they use nothing that they learnt at college to do them. They're carried
out by business, or English, or (sometimes) science/maths graduates.
Now there are definitely exceptions to this. There are computer programming
jobs that are very hard, and for which you do need a Computer Science, or Maths
degree, and a lot of technical skill. But these are the exception. The 'App
economy', and the corporate IT world, largely consist of mediocre programmers –
who are astonishingly ignorant of basic Computer Science concepts, but muddle
through creating mediocre software.
Just want to add that I very much endorse engels' comment above:
"I fear that
equating credentials (i.e. formal or informal qualifications explicitly
demanded by employers for a specific economic role) with education (study,
reading, learning, the life of the mind, ) may not be conducive to progress
here."
From the employer side, though, the choice is often between five candidates who
have the BA, and twenty who don't. Since it's more likely that the BA
candidates will be capable employees, it makes some sense to eliminate the less
credentialled immediately (because interviewing people isn't free any more than
on the job training is). I have been part of a hiring process where we got
hundreds of applications every time we advertised, and had to grind through
them looking for that one unicorn-like candidate who was worth hiring.
Immediately binning anyone who didn't follow the instructions or possess the
requisite qualifications was simply essential to save time. As it was we spent
probably $20,000 of staff time filtering ~600 applications down to 15
interviewees, then interviewing the 10 who turned up.
With the "modern careers" like programming, there's usually a huge gap between
people who have the credentials and those who don't. It's not so much in the
one job they have, it's their ability to keep working as a programmer through
their life. University demonstrates possession of the "how to learn" skill in a
way that learning on the job doesn't. There are more than a few non-graduate
programmers who are locked into that one job they got somehow, and they can't
leave. Or they can leave, but they'll be working as a greeter at a box store if
they do.
There is, though, a lot of cross-over with ageism in general and in
tech jobs particularly. It doesn't matter how skilled you are if the employer
is willing to hire a recent graduate for less than you can afford to accept.
I'm reminded of the many article on open plan offices – too many employers
accept lower productivity from cheap staff/overcrowded offices etc because it
never occurs to them that paying more might get a better result. Or they can't
get that thought through the internal bureaucrazy. Or worse, it doesn't survive
the next arbitrary "cut staffing costs by 23%" edict.
Related is the Paper Qualifications Syndrome, which was of such great concern
to some in the 1980s that the ILO spent money studying it. The PQS was the
trend by employers to favour recruits with formal qualifications over those
without, even when those without may have had relevant work experience.
One reason employers may favour graduates for low level office jobs is that
employers know that technology is no longer static. It is not merely that file
clerks need today to know how to run databases, but also that such employees
will need an entirely different set of technical office skills in 20 years
time. Graduates, having learnt how to learn, are generally better able to cope
in this environment than people whose formal education ended at 18.
There is a related phenomenon which the UK academic mathematics community has
noted. Increasingly, employers no longer need people with only a first degree
in mathematics, because much routine math work can be assigned to machines. But
some sectors, eg finance, national security, still need original math to be
done, which means they need recruits with PhDs in mathematics. The demand for
math PhDs used to be a small percentage of the demand for math graduates. If
teachers are excluded from the demand figures, this is likely to be reversed:
More PhDs are needed than plain graduates. This phenomenon has important
implications for education policy.
I'm all for more education, of all sorts. The problem we have now with some
types of education is that it's thin, delivered in the same way all the way
from maybe Grade 3 to post-secondary, and is starting to NOT signal anything to
potential employers. This is especially true for several post-secondary majors
like Communications, Marketing, Family Science, etc. And there are other majors
that graduate far more young people than the economy can absorb - Graphic Arts,
Education, Hospitality, etc. Yes, it signals that the student had enough
self-discipline (and money) to persist, but is this really enough?
Dismal Voucher Results Surprise Researchers as DeVos Era
Begins
By Kevin Carey
The confirmation of Betsy DeVos as secretary of education
was a signal moment for the school choice movement. For the
first time, the nation's highest education official is
someone fully committed to making school vouchers and other
market-oriented policies the centerpiece of education reform.
But even as school choice is poised to go national, a wave
of new research has emerged suggesting that private school
vouchers may harm students who receive them. The results are
startling - the worst in the history of the field,
researchers say.
While many policy ideas have murky origins, vouchers
emerged fully formed from a single, brilliant essay *
published in 1955 by Milton Friedman, the free-market
godfather later to be awarded a Nobel Prize in Economics.
Because "a stable and democratic society is impossible
without widespread acceptance of some common set of values
and without a minimum degree of literacy and knowledge on the
part of most citizens," Mr. Friedman wrote, the government
should pay for all children to go to school.
But, he argued, that doesn't mean the government should
run all the schools. Instead, it could give parents vouchers
to pay for "approved educational services" provided by
private schools, with the government's role limited to
"ensuring that the schools met certain minimum standards."
The voucher idea sat dormant for years before taking root
in a few places, most notably Milwaukee. Yet even as many of
Mr. Friedman's other ideas became Republican Party orthodoxy,
most national G.O.P. leaders committed themselves to a
different theory of educational improvement: standards,
testing and accountability. That movement reached an apex
when the No Child Left Behind Act of 2001 brought a new focus
on tests and standards to nearly every public school
nationwide. The law left voucher supporters with crumbs: a
small demonstration project in Washington, D.C.
But broad political support for No Child Left Behind
proved short-lived. Teachers unions opposed the reforms from
the left, while libertarians and states-rights conservatives
denounced it from the right. When Republicans took control of
more governor's mansions and state legislatures in the 2000s,
they expanded vouchers to an unprecedented degree. Three of
the largest programs sprang up in Indiana, Louisiana and
Ohio, which collectively enroll more than a third of the
178,000 voucher students nationwide.
Most of the new programs heeded Mr. Friedman's original
call for the government to enforce "minimum standards" by
requiring private schools that accept vouchers to administer
standardized state tests. Researchers have used this data to
compare voucher students with similar children who took the
same tests in public school. Many of the results were
released over the last 18 months, while Donald J. Trump was
advocating school choice on the campaign trail.
The Role of Government in Education
By Milton Friedman
The general trend in our times toward increasing
intervention by the state in economic affairs has led to a
concentration of attention and dispute on the areas where new
intervention is proposed and to an acceptance of whatever
intervention has so far occurred as natural and unchangeable.
The current pause, perhaps reversal, in the trend toward
collectivism offers an opportunity to reexamine the existing
activities of government and to make a fresh assessment of
the activities that are and those that are not justified.
This paper attempts such a re-examination for education.
Education is today largely paid for and almost entirely
administered by governmental bodies or non-profit
institutions. This situation has developed gradually and is
now taken so much for granted that little explicit attention
is any longer directed to the reasons for the special
treatment of education even in countries that are
predominantly free enterprise in organization and philosophy.
The result has been an indiscriminate extension of
governmental responsibility.
The role assigned to government in any particular field
depends, of course, on the principles accepted for the
organization of society in general. In what follows, I shall
assume a society that takes freedom of the individual, or
more realistically the family, as its ultimate objective, and
seeks to further this objective by relying primarily on
voluntary exchange among individuals for the organization of
economic activity. In such a free private enterprise exchange
economy, government's primary role is to preserve the rules
of the game by enforcing contracts, preventing coercion, and
keeping markets free. Beyond this, there are only three major
grounds on which government intervention is to be justified.
One is "natural monopoly" or similar market imperfection
which makes effective competition (and therefore thoroughly
voluntary ex change) impossible. A second is the existence of
substantial "neighborhood effects," i.e., the action of one
individual imposes significant costs on other individuals for
which it is not feasible to make him compensate them or
yields significant gains to them for which it is not feasible
to make them compensate him-- circumstances that again make
voluntary exchange impossible. The third derives from an
ambiguity in the ultimate objective rather than from the
difficulty of achieving it by voluntary exchange, namely,
paternalistic concern for children and other irresponsible
individuals. The belief in freedom is for "responsible"
units, among whom we include neither children nor insane
people. In general, this problem is avoided by regarding the
family as the basic unit and therefore parents as responsible
for their children; in considerable measure, however, such a
procedure rests on expediency rather than principle. The
problem of drawing a reasonable line between action justified
on these paternalistic grounds and action that conflicts with
the freedom of responsible individuals is clearly one to
which no satisfactory answer can be given.
In applying these general principles to education, we
shall find it helpful to deal separately with (1) general
education for citizen ship, and (2) specialized vocational
education, although it may be difficult to draw a sharp line
between them in practice. The grounds for government
intervention are widely different in these two areas and
justify very different types of action....
Remember that one? It was about as weird as it gets. A meme generated out of the voluminous hacked
John Podesta emails that some conspiracy connoisseurs cooked up into a tale of satanic child abuse
revolving around a certain chi-chi Washington DC pizza joint. I never signed on with the story, but
it was an interesting indication of how far the boundaries of mass psychology could be pushed in
the mind wars of politics.
Sex, of course, is fraught. Sex and the feelings it conjures beat a
path straight to the limbic system where the most primitive thoughts become the father of the most
primitive deeds. In our American world, this realm of thought and deed has turned into a political
football with the Left and the Right scrimmaging ferociously for field position - while the real
political agenda of everything important other than sex lies outside the stadium.
The Comet Pizza story was understandably upsetting to Democrats who didn't like being painted
as child molesters. Unfortunately for them, it coincided with the bust of one Anthony Weiner - and
his infamous laptop - disgraced former "sexting" congressman, husband of Hillary's top aide and BFF,
Huma Abedin. The laptop allegedly contained a lot of child porn.
That garbage barge of sexual allegation and innuendo couldn't have helped the Hillary campaign,
along with all the Clinton Foundation stuff, in the march to electoral loserdom. I suspect the chthonic
darkness of it all generated the "Russia-did-it" hysteria that cluttered up the news-cloud during
the first month of Trumptopia. The collective superego of America is reeling with shame and rage.
On the Right side of the spectrum stood the curious figure of Milo Yiannopoulos, the self-styled
"Dangerous Faggot," who has made a sensational career lately as an ideological provocateur, especially
on the campus scene where he got so into the indignant faces of the Maoist snowflakes with his special
brand of boundary-pushing that they resorted to disrupting his events, dis-inviting him at the last
moment, or finally rioting, as in the case at UC Berkeley a few weeks ago.
Milo's battles on campus were particularly ripe because his opponents on the far Left were themselves
so adamant about their own brand of boundary-pushing along the frontier of the LGBTQ agenda. The
last couple of years, you would've thought that half the student population fell into one of those
"non-binary" sex categories, and it became the most urgent mission of the Left to secure bathroom
rights and enforce new personal pronouns of address for the sexually ambiguous.
But then Milo made a tactical error. Despite all the mutual boundary-pushing on each side, he
pushed a boundary too far and entered the final dark circle of taboo: child molesting. That was the
point were the closet Puritan hysterics went in for the kill. This is what he said on a Web
talk radio show:
What normally happens in schools, very often, is you have an older
woman with a younger boy, and the boy is the predator in that situation. The boy is like, let's
see if I can fuck the gym teacher, or let's see if I can fuck the hot math teacher, and he does.
The women fall in love with these nubile young boys, these athletic young boys in their prime.
We get hung up on the child abuse stuff to the point where we're heavily policing consenting adults,
grad students and their professors, this arbitrary and oppressive idea of consent, which totally
destroys the understanding many of us have about the complexities, subtleties, and complicated
nature of many relationships. In the homosexual world particularly, some of the relationships
between younger boys and older men, the sort of coming-of-age relationships in which these older
men help those young boys discover who they are, and give them security and provide them with
love . [Milo is shouted down by his podcast hosts]
So that was the final straw. Milo got bounced by his platform,
Breitbart News
, and went
through the now-routine, mandatory, abject ceremonial of the televised apology required by over-stepping
celebrities - though he claimed, with some justification I think, that his remarks were misconstrued.
Anyway, I'm sure he'll rebound on his own signature website platform and he'll be back in action
before long.
His remarks about the "coming-of-age" phase of life prompted me to wonder about the boundary-pushers
on the Left, on the college campuses in particular, who are encouraging young people to go through
drastic sex-change surgeries, at an age before the development of that portion of their frontal lobes
controlling judgment is complete. Who are these diversity deans and LGBTQ counselors who lead confused
adolescents to self-mutilation in search of some hypothesized "identity?" Whoever they are, this
dynamic seems pretty reckless and probably tragic to me. There ought to be reasonable doubt that
an irreversible "sexual reassignment" surgery may not lead to personal happiness some years down
the line - when, for instance, that person's frontal lobes have developed, and they begin to experience
profound and complicated emotions such as remorse.
Our sexual hysteria has many more curious angles to it. We live in a culture where pornography,
up to the last limits of freakishness and depravity, is available to young unformed personalities
at a click. We stopped protecting adolescents against this years ago, so why should we be surprised
when they venture into ever-darker frontiers of sexuality? It was the Left that sought to abolish
boundaries in sex and many other areas of American life. And yet they still affect to be shocked
by someone like Milo.
I maintain that there is a dynamic relationship between our inability to act on the truly pressing
issues of the day - energy, economy, and geo-politics - and our neurotic preoccupation with sexual
identity. The epic amount of collective psychic energy being diverted from what's important into
sexual fantasy, titillation, confusion, and litigation leaves us pathetically unprepared to face
the much more serious crisis of civilization gathering before us.
*
Postscript
: This item from
The Stanford
[University]
Daily
newspaper
puts a nice gloss on the stupefying idiocy in the campus sex-and-identity debate.
Single-occupancy Restrooms Convert to All-gender Facilities
: "Single-occupancy
restrooms on campus will soon all be converted to gender-neutral facilities due to new California
legislature and ongoing administrative efforts. The Diversity and Access Office (D&A Office) has
been spearheading the campaign to convert all single-occupancy restrooms ."
Here's what I don't get: if a single-occupancy restroom is going to be used by one person at a
time, what need is there to officially designate the sex of any person using it? And why are officials
at an elite university wasting their time on this?
routersurfer
February 24, 2017
at 9:44 am
#
I agree totally this perverted national pastime of pin the genitalia on the
mass of confused youth is a waste of time and energy. Anyone who reaches for
the scalpel and plastic surgery before 25 has not been served well by the so
called adults in their lives. Nature makes mistakes. Look at the Royals of Europe.
But wait until the body is formed before the Medical Industrial Complex steps
in. Now back to real problems. I heard on Bloomberg radio The Fed may offer
50 and 100 year T notes. Can someone explain how that fits into our system of
accounting scams??
If "Inadequate Skills" Is Preventing People from Being Hired in Manufacturing, It's Among the
CEOs
The Associated Press ran a story * that told readers:
"Factory jobs exist, CEOs tell Trump. Skills don't."
The piece presents complaints from a number of CEOs of manufacturing companies that they can't
find the workers with the necessary skills. The piece does note the argument that the way to get
more skilled workers is to offer higher pay, but then reports:
"some data supports the CEOs' concerns about the shortage of qualified applicants. Government
figures show there are 324,000 open factory jobs nationwide - triple the number in 2009, during the
depths of the recession."
The comparison to 2009 is not really indicative of anything, since this was a time when the economy
was facing the worst downturn since the Great Depression and companies were rapidly shedding workers.
A more serious comparison would be to 2007, before the recession. The job opening rate in manufacturing
for the last three months has averaged 2.5 percent, roughly the same as in the first six months of
2007, which was still a period in which the sector was losing jobs.
According to the Bureau of Labor Statistics, average hourly earnings of production and non-supervisory
workers in manufacturing has risen by 2.4 percent over the last year. This means that manufacturing
firms are not acting in a way consistent with employers having trouble finding workers. This suggests
that if there is a skills shortage it is among CEOs who don't understand that the price of an item
in short supply, in this case qualified manufacturing workers, is supposed to increase.
Young people who have watched
the stampede of manufacturing jobs out of the US may reasonably believe that they would be
unwise to commit to developing any scarce skills currently needed in domestic manufacturing.
Working in Illinois and Wisconsin, I know many skilled manufacturing technicians and engineers
whose situations went from comfort to poverty in the space of a few years. Why would a young
person today believe that manufacturing skills developed now will not be offshored the next
time political winds shift? One of the reasons Trump got elected was by promising to protect
the manufacturing jobs that are left, something that neither the Clintons, Bushes, nor Obama
were willing to attempt.
I believe Trump is wrong to try to wreck NAFTA, but PNTR for China has been a disaster for
the US working class. This was initiated by Clinton and neither Bush nor Obama did anything
to mitigate its effect on working people in the Midwest.
Even without that aspect, most
of the "skill" and experience has to be acquired on the job - into which they will not be hired.
What most business managers are looking for is trained up people for whose training and hands-on
skill somebody else has paid for. They don't want to be that "sucker" themselves.
I suspect it is not purely selfishness (though poaching has always existed), but this mindset
has evolved in the past decades where business could draw on a large overhang of sufficiently-skilled
labor at home and globally. It was possible to dial down training and still find enough qualified
workers. This is one of those things where the downward path is easier than upward. In parallel
corporate pensions and unions were eliminated or reduced, both things that promote worker retention;
and corporate/public rhetoric shifted to make it clear that you will only have your job as
long as you are useful to the company, and maintaining that is up to you. Well, that's a two-way
street.
One possible solution to the
training problem has been practiced in Germany - the government passes out training quotas
or subsidies to companies; it is basically "either you train them or you pay a no-training
'fee' and we train them for you". Most large companies have training programs, but they often
exceed their demand for new workers (or they can find qualified workers or temps elsewhere),
and not everybody will be hired after graduating. That part such programs cannot address.
One possible solution to the
training problem has been practiced in Germany - the government passes out training quotas
or subsidies to companies; it is basically "either you train them or you pay a no-training
'fee' and we train them for you"....
Unemployment versus Underemployment: Assessing Labor Market Slack
:
The U-3 unemployment rate has returned to prerecession levels and is
close to estimates of its longer-run sustainable level. Yet other
indicators of slack, such as the U-6 statistic, which includes people
working part-time but wanting to work full-time (often referred to as
part-time for economic reasons, or PTER), has not declined as quickly
or by as much as the U-3 unemployment rate.
If unemployment and PTER reflect the same business-cycle effects, then they should move pretty
much in lockstep. But as the following chart shows, such uniformity hasn't generally been the case.
In the most recent recovery, unemployment started declining in 2010, but PTER started to move
substantially lower beginning only in 2013. The upshot is that for each unemployed worker, there are
now many more involuntary part-time workers than in the past.
Unemployment and Unemployment-Underemployment * rates,
1994-2017
* Total unemployed, plus all marginally attached workers,
plus total employed part time for economic reasons, as a
percent of the civilian labor force plus all marginally
attached workers; age 16 and over.
Unemployment and Unemployment-Underemployment * rates,
1994-2017
* Total unemployed, plus all marginally attached workers,
plus total employed part time for economic reasons, as a
percent of the civilian labor force plus all marginally
attached workers; age 16 and over.
"during the last recession, firms reduced the hours of
workers in low-skill jobs more than they cut the number of
low-skill jobs"
I believe this is the correct explanation.
I used to tack growth in hours vs. growth in payrolls, and
what I found was that, had the 2008 recession followed the
pattern of previous recessions, the peak unemployment rate
would have been considerably higher. Let me do a little
digging ....
The value reached its lowest level ever in 2009. In other
words, relative more hours than jobs were cut in the Great
Recession, even compared to other recessions.
Dean covers a ton of material here. One is his points is
right in one sense. We are below full employment so we need
some sort of aggregate demand expansion. Would trade
protection do this for the US? Perhaps if we had fixed
exchange rates and we did not suffer a trade war. But as Dean
has noted elsewhere, we need more expansionary monetary
policy. Dean repeats something that Jared Bernstein wrote:
'If we wanted better data on bilateral trade flows, then it
would be desirable to pull out the re-exports from both our
exports to Canada and our imports from Germany. This
adjustment would make our trade deficit with Canada appear
larger and trade deficit with Germany smaller, but would
leave our total trade balance unchanged.'
So Dean and Jared thinks that a US multinational that buys
a product from Mexico at $80 which ultimately sells in Canada
for $100 charges the Canadian distribution affiliate only
$80? Dean knows better as he in the past has written about
transfer pricing. No - transfer pricing games do affect the
current reporting of the trade balance. Dean needs to read
Brad Setser.
According to CBO
, potential GDP for the 4
th
quarter of 2016
was $19,049 billion. This is 1.0 percent higher than the estimate of GDP for
the quarter of $18,860.8 billion. This means that if CBO is right, if there
had been more demand in the economy, for example due to imports being
replaced by domestically produced goods, GDP could have been 1.0 percent
higher last quarter.
Of course CBO's estimates of potential GDP are not
especially accurate. Its most recent estimates for potential GDP in 2016 are
more than 10 percent below what it had projected for potential GDP in 2016
back in 2008, before the severity of the crash was recognized. It is
possible it overstated potential by a huge amount in 2008, but it is also
possible it is understating potential today. It also hugely understated
potential GDP in the mid-1990s, with 2000 GDP coming in more than 5 percent
above the estimate of potential that CBO made in 1996. In other words, it
would not be absurd to think that the economy could sustain a level of
output that is 2.0 percent above the current level. (The fact that the
employment rate of prime age workers [ages 25-54] is still 4.0 percentage
points below the 2000 peak is certainly consistent with this view.)
Suppose that GDP were consistently 2.0 percent higher than current
projections over the next decade due to a lower trade deficit. This would
imply an additional $4.6 trillion in output over this period. If the
government captures 30 percent of this in higher taxes and lower spending on
transfer programs like unemployment insurance and food stamps, this would
imply a reduction in the projected deficit of $1.38 trillion over the
decade. That's not quite the $1.74 trillion projected by Navarro, but close
enough to make the derision unwarranted.
In terms of how you get a lower trade deficit, Navarro's strategy of
beating up on China is probably not the best way to go. But there is in fact
precedent for the United States
negotiating a lower
value for the dollar
under President Reagan, which had the desired
effect of reducing the trade deficit.
There is no obvious reason it could not pursue a similar path today,
especially since it is widely claimed in business circles that China
actually wants to raise the value of its currency. The U.S. could help it.
The second area of seemingly gratuitous Trump trade bashing comes from a
Wall Street Journal
news article
on the Trump administration's efforts to correct for
re-exports in trade measures. Before getting to the article, it is important
to understand what is at issue.
Most of what the United States exports to countries like Mexico, Japan,
or elsewhere are goods and services produced in the United States. However,
some portion of the goods that we export to these countries consists of
items imported from other countries which are just transshipped through the
United States.
The classic example would be if we offloaded 100 BMWs on a ship in New
York and then 20 were immediately sent up to Canada to be sold there. The
way we currently count exports and imports, we would count the 20 BMWs as
exports to Canada and also as imports from Germany. These re-exports have
zero impact on our aggregate trade balance, but they do exaggerate out
exports to Canada and our imports from Germany.
If we wanted better data on bilateral trade flows, then it would be
desirable to pull out the re-exports from both our exports to Canada and our
imports from Germany. This adjustment would make our trade deficit with
Canada appear larger and trade deficit with Germany smaller, but would leave
our total trade balance unchanged.
This better measure of trade flows would be useful information to have if
we wanted to know what happened to trade with a specific country following a
policy change, for example the signing of a trade deal like NAFTA. The
inclusion of re-exports in our export data would distort what had happened
to actual flows of domestically produced exports and imports for domestic
consumption.
The United States International Trade Commission already produces a
measure of trade balances
that
excludes imports that are re-exported. However this measure is still not an
accurate measure of bilateral trade balances since it still includes the
re-exports on the import side. In the case mentioned above, it would include
the BMWs imported from Germany that were immediately sent to Canada, as
imports. In principle, we should be able to construct a measure that
excludes these items on the import side as well. If this is what the Trump
administration is trying to do, then it is asking for a perfectly reasonable
adjustment to the data.
This is where we get to the WSJ article. According to the piece, the
Trump administration was asking the Commerce Department to produce measures
of bilateral trade balances that took out the re-exports on the export side,
but left them in on the import side. This would have the effect of
artificially inflating our trade deficit with a bogus number. If this is in
fact what the Trump administration is trying to do, then we should be
shooting at them with all guns. (This is metaphorical folks, I'm not
advocating violence.)
However some skepticism might be warranted at this point. No one with a
name actually said the Trump administration asked for this bogus measure of
trade balances. The sole source listed is "one person familiar with the
discussions."
There was an official statement from the Commerce Department's Bureau of
Economic Analysis (BEA), which collects and compiles the data:
"Any internal discussions about data collection methods are no more than
the continuation of a longstanding debate and are part of the bureau's
normal process as we strive to provide the most precise statistics
possible."
I take very seriously efforts to mess with the data. We are fortunate to
have independent statistical agencies with dedicated civil servants who take
their work very seriously. However we should wait until we have a bit more
solid evidence before assuming that the Trump administration is trying to
interfere in their independence, as opposed to trying to make a totally
legitimate adjustment to the data that the BEA staff would almost certainly
agree is an improvement.
Abe
Lincoln was protectionist
•
2 hours ago
Yes - Pres. Trump is MUCH MUCH better at economics than many so-called
American economists.
Also ignores transfer pricing. US corporations
are good at gaming their own tax system but face tough regulations
elsewhere. Their solution to pulling profits out of their foreign
operations and putting them in a non-taxed US is to export phantom
products to foreign countries from their American subsidiaries. The US
is Ireland on a large scale - the real trade deficit with China is
probably closer to $10 in imports for every $1 of export rather than
the official $4 in imports to $1 in exports.
urban legend
•
5 hours ago
Economists often seem to pooh-pooh the employment-to-population ratio
as some kind of unrealistic never-again-to-be achieved holy grail --
as if the phenomenon of women going back into the labor force had been
completely expended and there would thereafter be no change in the
education level of working age adults. In fact, women entering the
labor force continued to grow, and faster than men dropping out, and
the education level (and employability) of working age adults has been
improving, especially in Southern states that had relatively low high
school or college graduation rates and, therefore, low
employment-to-population ratios that pulled down the national rate.
While looking at the employment rate of all non-institutional adults
16 and older may be complicated by baby boomers hitting senior status,
the prime working age (25-54) employment rate should be even higher
than it was in 2000, not just the same or lower. We saw an inkling
then of what full employment might look like, and an inflation problem
did not raise its ugly head.
It's also to be noted that while in January 1994 when the
"marginally attached to the labor force" and "discouraged worker"
measures were first reported, only two million members of the 16+
adult population were counted as marginally attached and only 600,000
were considered to be discouraged. Yet as demand grew, almost 20
million people crawled out from outside the labor force or from being
counted as potential workers by any measurement and took jobs when
they became available. That's 18 million more than BLS statistics
suggested would be the outermost limit to the size of the labor force.
In other words, it seems absurd, indeed absurd enough to consider
it almost to be offered in bad faith, to suggest that we are anywhere
remotely close to full employment. One must ask what the agenda is for
it to continue to be suggested, since slowing growth has certain
consequences that may help the wealthier members of our society while
hurting everyone else.
pieceofcake
urban legend
•
5 hours ago
'In other words, it seems absurd, indeed absurd enough to consider
it almost to be offered in bad faith, to suggest that we are
anywhere remotely close to full employment.'
If We would be
anywhere remotely close to full employment - there would be NO
'gig-economy' - no companies on the Internet which help you to
(still) write all these resumes - and probably NO Uber - as - do
you know anybody who is willing to work as a Uber driver if he or
she can have a real Job?
And about the wealthier members of our society - Yeah they did
that!
pieceofcake
pieceofcake
•
5 hours ago
- and since I'm back again in the homeland - I have been the
guest of 63 Uber-Drivers in 16 different cities -(right now I'm
in Redwood City CA) - and the overwhelming majority of the
drivers agreed with me - that there might be no better measure
for the real unemployment situation in the homeland and the
terrible Job market - that so many Americans - who actually have
learned some real Jobs - end up driving idiots like me around.
For heavens sake - the other day I even had a History Prof. -
and if I will get Mr. Baker one day as my driver - I tell'ya - I
will get really worried.
"... The Democrats' central weakness comes from being a party of business but having to pretend otherwise. ..."
"... Since Donald Trump was inaugurated as the president of the United States, things have been moving so quickly it's hard to pause and take stock of our surroundings - let alone evaluate how we arrived at this nightmarish place. ..."
"... 'Ironically, both Stiglitz and Sanders have declared themselves to be democrats" ..."
"... I was a Democrat before and would be again. But, that would require that the neocons and neoliberals would be replaced by progressives. ..."
"... Shumer was elected Senate minority leader and that is a bad sign to me. He is sponsored by both neocons and neoliberals. ..."
"... Joe wants to be allowed to speak his piece. If he irritates the plutocrats too much they will cut off his access to media. ..."
A wide range of policies can help reduce inequality.
Policies should be aimed at reducing inequalities both in market income and in the post-tax and-transfer
incomes. The rules of the game play a large role in determining market distribution- in preventing
discrimination, in creating bargaining rights for workers, in curbing monopolies and the powers of
CEOs to exploit firms' other stakeholders and the financial sector to exploit the rest of society.
These rules were largely rewritten during the past thirty years in ways which led to more inequality
and poorer overall economic performance. Now they must be rewritten once again, to reduce inequality
and strengthen the economy, for instance, by discouraging the short-termism that has become rampant
in the financial and corporate sector.
Reforms include more support for education, including pre-school; increasing the minimum wage;
strengthening earned-income tax credits; strengthening the voice of workers in the workplace, including
through unions; and more effective enforcement of anti-discrimination laws. But there are four areas
in particular that could make inroads in the high level of inequality which now exists.
First, executive compensation (especially in the US) has become excessive, and it is hard to justify
the design of executive compensation schemes based on stock options.
Executives should not be rewarded for improvements in a firm's stock market performance in which
they play no part. If the Federal Reserve lowers interest rates, and that leads to an increase in
stock market prices, CEOs should not get a bonus as a result. If oil prices fall, and so profits
of airlines and the value of airline stocks increase, airline CEOs should not get a bonus. There
is an easy way of taking account of these gains (or losses) which are not attributable to the efforts
of executives: basing performance pay on the relative performance of firms in comparable circumstances.
The design of good compensation schemes that do this has been well understood for more than a third
of a century, and yet executives in major corporations have almost studiously resisted these insights.
They have focused more on taking advantages of deficiencies in corporate governance and the lack
of understanding of these issues by many shareholders to try to enhance their earnings- getting high
pay when share prices increase, and also when share prices fall. In the long run, as we have seen,
economic performance itself is hurt.
Second, macroeconomic policies are needed that maintain economic stability and full employment.
High unemployment most severely penalises those at the bottom and the middle of the income distribution.
Today, workers are suffering thrice over: from high unemployment, weak wages and cutbacks in public
services, as government revenues are less than they would be if economies were functioning well.
As we have argued, high inequality has weakened aggregate demand. Fuelling asset price bubbles
through hyper-expansive monetary policy and deregulation is not the only possible response. Higher
public investment- in infrastructures, technology and education- would both revive demand and alleviate
inequality, and this would boost growth in the long-run and in the short-run. According to a recent
empirical study by the IMF, well-designed public infrastructure investment raises output both in
the short and long term, especially when the economy is operating below potential. And it doesn't
need to increase public debt in terms of GDP: well-implemented infrastructure projects would pay
for themselves, as the increase in income (and thus in tax revenues) would more than offset the increase
in spending.
Third, public investment in education is fundamental to address inequality. A key determinant
of workers' income is the level and quality of education. If governments ensure equal access to education,
then the distribution of wages will reflect the distribution of abilities (including the ability
to benefit from education) and the extent to which the education system attempts to compensate for
differences in abilities and backgrounds. If, as in the United States, those with rich parents usually
have access to better education, then one generation's inequality will be passed on to the next,
and in each generation, wage inequality will reflect the income and related inequalities of the last.
Fourth, these much-needed public investments could be financed through fair and full taxation
of capital income. This would further contribute to counteracting the surge in inequality: it can
help bring down the net return to capital, so that those capitalists who save much of their income
won't see their wealth accumulate at a faster pace than the growth of the overall economy, resulting
in growing inequality of wealth. Special provisions providing for favourable taxation of capital
gains and dividends not only distort the economy, but, with the vast majority of the benefits going
to the very top, increase inequality. At the same time they impose enormous budgetary costs: 2 trillion
dollars from 2013 to 2023 in the US, according to the Congressional Budget Office. The elimination
of the special provisions for capital gains and dividends, coupled with the taxation of capital gains
on the basis of accrual, not just realisations, is the most obvious reform in the tax code that would
improve inequality and raise substantial amounts of revenues. There are many others, such as a good
system of inheritance and effectively enforced estate taxation.
Redefining economic performance
We used to think of there being a trade-off: we could achieve more equality, but only at the expense
of overall economic performance. It is now clear that, given the extremes of inequality being reached
in many rich countries and the manner in which they have been generated, greater equality and improved
economic performance are complements.
This is especially true if we focus on appropriate measures of growth. If we use the wrong metrics,
we will strive for the wrong things. As the international Commission on the Measurement of Economic
Performance and Social Progress argued, there is a growing global consensus that GDP does not provide
a good measure of overall economic performance. What matters is whether growth is sustainable, and
whether most citizens see their living standards rising year after year.
Since the beginning of the new millennium, the US economy, and that of most other advanced countries,
has clearly not been performing. In fact, for three decades, real median incomes have essentially
stagnated. Indeed, in the case of the US, the problems are even worse and were manifest well before
the recession: in the past four decades average wages have stagnated, even though productivity has
drastically increased.
As this essay has emphasised, a key factor underlying the current economic difficulties of rich
countries is growing inequality. We need to focus not on what is happening on average- as GDP leads
us to do- but on how the economy is performing for the typical citizen, reflected for instance in
median disposable income. People care about health, fairness and security, and yet GDP statistics
do not reflect their decline. Once these and other aspects of societal well-being are taken into
account, recent performance in rich countries looks much worse.
The economic policies required to change this are not difficult to identify. We need more investment
in public goods; better corporate governance, antitrust and anti-discrimination laws; a better regulated
financial system; stronger workers' rights; and more progressive tax and transfer policies. By 'rewriting
the rules' governing the market economy in these ways, it is possible to achieve greater equality
in both the pre- and post-tax and transfer distribution of income, and thereby stronger economic
performance.
[Joe had it right with this essay and progressives should elaborate and emphasize this message -
not just rant about Trump.]
That's the key point of the whole discussion. Dems are just a party of neoliberals.
Who are in the pocket of Wall Street.
So they are in the pocket of the same guys who bought Republicans (and both parties are
also puppets of MIC -- with Dems becoming the major War party; not that different from neocons
).
Stiglitz actually is very shy to criticize neoliberal "cult of GDP":
== quote ==
As this essay has emphasised, a key factor underlying the current economic difficulties of
rich countries is growing inequality. We need to focus not on what is happening on average
- as GDP leads us to do- but on how the economy is performing for the typical citizen, reflected
for instance in median disposable income.
People care about health, fairness and security, and yet GDP statistics do not reflect their
decline.
Once these and other aspects of societal well-being are taken into account, recent performance
in rich countries looks much worse.
== end of quote ==
This is why "pro growth liberals" are just crooks in disguise... With a smoke screen of
mathematical nonsense and obscure terminology to cover their tracks.
"This is why "pro growth liberals"
are just crooks in disguise... With a smoke screen of mathematical nonsense and obscure terminology
to cover their tracks."
Agreed. They originated with John Bates Clark and the neoclassical
concept of marginal utility:
I think it is a concept that
was used by Clark and other neoclassicals to counter Henry George's arguments for a tax on
rentiers and then later to obfuscate the role played by finance:
Henry George and john Bates
Clark
Henry George was the most popular economist of his day. Why did "elite" economists choose
to follow the lead of John Bates Clark instead of George?
IOW, elite economists had various theories to choose from. Why did they choose a theory that
neglcted unearned income?
.........................................................
"RA: So let me suggest that there is an alternative, and get your thoughts on this, because
this idea has run its course. People are now starting to wake up and say" enough." You've written
a lot about unearned versus earned wealth – unearned wealth or unearned increment, if you like
– and it goes back to a man called John Bates Clark. He was one of the first neoclassical economists.
I think I'm right in saying that. Just talk a bit about him, he said there was no differentiation,
is that right?
MH: Yes.
RA: And that seemingly innocuous proclamation has had huge effects.
MH: By the 1870s and '80s there was a lot of pressure in all countries, especially in the
United States, by socialists on the one hand and followers of the journalist Henry George on
the other. George wanted to tax away the land's economic rent and use that as the tax base,
instead of taxing labor and industry. So John Bates Clark wrote about the philosophy of wealth,
and said "There's no such thing as unearned income. Everything that the economists before me
have written is wrong. Everybody earns exactly what they contribute to national product and
that means that whatever their earnings are will be added to national product.""
http://michael-hudson.com/2016/12/innocuous-proclaimations/
..........................................................
Henry George (September 2, 1839 – October 29, 1897) was an American political economist, journalist,
and philosopher. His immensely popular writing is credited with sparking several reform movements
of the Progressive Era, and inspiring the broad economic philosophy known as Georgism, based
on the belief that people should own the value they produce themselves, but that the economic
value derived from land (including natural resources) should belong equally to all members
of society.
His most famous work, Progress and Poverty (1879), sold millions of copies worldwide, probably
more than any other American book before that time. The treatise investigates the paradox of
increasing inequality and poverty amid economic and technological progress, the cyclic nature
of industrialized economies, and the use of rent capture such as land value tax and other anti-monopoly
reforms as a remedy for these and other social problems.
............................................
Furthermore, on a visit to New York City, he was struck by the apparent paradox that the poor
in that long-established city were much worse off than the poor in less developed California.
These observations supplied the theme and title for his 1879 book Progress and Poverty, which
was a great success, selling over 3 million copies. In it George made the argument that a sizeable
portion of the wealth created by social and technological advances in a free market economy
is possessed by land owners and monopolists via economic rents, and that this concentration
of unearned wealth is the main cause of poverty. George considered it a great injustice that
private profit was being earned from restricting access to natural resources while productive
activity was burdened with heavy taxes, and indicated that such a system was equivalent to
slavery – a concept somewhat similar to wage slavery. This is also the work in which he made
the case for a land value tax in which governments would tax the value of the land itself,
thus preventing private interests from profiting upon its mere possession, but allowing the
value of all improvements made to that land to remain with investors.[27][28]
................................
https://en.wikipedia.org/wiki/Henry_George
..................................................
John Bates Clark (January 26, 1847 – March 21, 1938) was an American neoclassical economist.
He was one of the pioneers of the marginalist revolution and opponent to the Institutionalist
school of economics, and spent most of his career as professor at Columbia University.
............................................................
The foundation of Clark's further work was competition: "If nothing suppresses competition,
progress will continue forever".[8] Clark: "The science adapted is economic Darwinism.
Though the process was savage, the outlook which it afforded was not wholly evil. The survival
of crude strength was, in the long run, desirable".[9] This was the fundament to develop the
theory which made him famous: Given competition and homogeneous factors of production labor
and capital, the repartition of the social product will be according to the productivity of
the last physical input of units of labor and capital.
This theorem is a cornerstone of neoclassical micro-economics.
Clark stated it in 1891[10] and more elaborated 1899 in The Distribution of Wealth.[11] The
same theorem was formulated later independently by John Atkinson Hobson (1891) and Philip Wicksteed
(1894).
The political message of this theorem is: "[W]hat a social class gets is, under natural
law, what it contributes to the general output of industry."[12]
......................................
https://en.wikipedia.org/wiki/John_Bates_Clark
............................
The John Bates Clark Medal is awarded by the American Economic Association to "that American
economist under the age of forty who is adjudged to have made a significant contribution to
economic thought and knowledge".[1] According to The Chronicle of Higher Education, it "is
widely regarded as one of the field's most prestigious awards, perhaps second only to the Nobel
Memorial Prize in Economic Sciences."[2] The award was made biennially until 2007, but is being
awarded every year from 2009 because many deserving went unawarded.[3] The committee cited
economists such as Edward Glaeser and John A. List in campaigning that the award should be
annual. Named after the American economist John Bates Clark (1847–1938), it is considered one
of the two most prestigious awards in the field of economics, along with the Nobel Prize.
https://en.wikipedia.org/wiki/John_Bates_Clark_Medal
.....................................................
"It is important, for the record, to recognize that key participants in the debate openly
admitted their mistakes. Samuelson's seventh edition of Economics was purged of errors. Levhari
and Samuelson published a paper which began, 'We wish to make it clear for the record that
the nonreswitching theorem associated with us is definitely false. We are grateful to Dr. Pasinetti...'
(Levhari and Samuelson 1966). Leland Yeager and I jointly published a note acknowledging his
earlier error and attempting to resolve the conflict between our theoretical perspectives.
(Burmeister and Yeager, 1978).
However, the damage had been done, and Cambridge, UK, 'declared victory': Levhari was wrong,
Samuelson was wrong, Solow was wrong, MIT was wrong and therefore neoclassical economics was
wrong. As a result there are some groups of economists who have abandoned neoclassical economics
for their own refinements of classical economics. In the United States, on the other hand,
mainstream economics goes on as if the controversy had never occurred. Macroeconomics textbooks
discuss 'capital' as if it were a well-defined concept - which it is not, except in a very
special one-capital-good world (or under other unrealistically restrictive conditions). The
problems of heterogeneous capital goods have also been ignored in the 'rational expectations
revolution' and in virtually all econometric work." (Burmeister 2000)
Well stated, and that is what it would take to achieve 'party unity.'
In other words, put
the people and principles first, and then the health and growth of the party will fall into
place.
Party first is power first. And that allure for money and power is what wrecked the Democratic
party as it had been-- although that failure was a long time coming.
The Democrats' central weakness comes from being a party of business but having to pretend
otherwise.
by Katie Halper & Doug Henwood
Since Donald Trump was inaugurated as the president of the United States, things have
been moving so quickly it's hard to pause and take stock of our surroundings - let alone evaluate
how we arrived at this nightmarish place.
And the liberal commentariat hasn't helped, arguing that the autopsies on Hillary Clinton's
failed campaign do nothing but sabotage the "unity" needed to fight Trump. But if we don't
want round two against the Right to resemble round one, we need to know what went wrong and
how to fix it.
Revoking trade deals will not help American middle classes
The advent of global supply chains has changed production patterns in the US
by Larry Summers
FEBRUARY 5, 2017
Trade agreements have been central to American politics for some years. The idea that renegotiating
trade agreements will "make America great again" by substantially increasing job creation and economic
growth swept Donald Trump into office.
More broadly, the idea that past trade agreements have damaged the American middle class and that
the prospective Trans-Pacific Partnership would do further damage is now widely accepted in both
major US political parties.
As Senator Daniel Patrick Moynihan once observed, participants in political debate are entitled
to their own opinions but not their own facts. The reality is that the impact of trade and globalisation
on wages is debatable and could be substantial. But the idea that the US trade agreements of the
past generation have impoverished to any significant extent is absurd.
There is a debate to be had about the impact of globalisation on middle class wages and inequality.
Increased imports have displaced jobs. Companies have been able to drive harder bargains with workers,
particularly in unionised sectors, because of the threat they can outsource. The advent of global
supply chains has changed production patterns in the US.
My judgment is that these effects are considerably smaller than the impacts of technological progress.
This is based on a variety of economic studies, experience in hypercompetitive Germany and the observation
that the proportion of American workers in manufacturing has been steadily declining for 75 years.
That said I acknowledge that global trends and new studies show that the impact of trade on wages
is much more pronounced than a decade ago.
But an assessment of the impact of trade on wages is very different than an assessment of trade
agreements. It is inconceivable that multilateral trade agreements, such as the North American Free
Trade Agreement, have had a meaningful impact on US wages and jobs for the simple reason that the
US market was almost completely open 40 years ago before entering into any of the controversial agreements.
American tariffs on Mexican goods, for example, averaged about 4 per cent before Nafta came into
force. China had what was then called "most favoured nation" trading status with the US before its
accession to the World Trade Organization and received the same access as other countries. Before
the Korea Free Trade Agreement, US tariffs on Korea averaged a paltry 2.8 per cent.
The irrelevance of trade agreements to import competition becomes obvious when one listens to
the main arguments against trade agreements. They rarely, if ever, take the form of saying we are
inappropriately taking down US trade barriers.
Rather the naysayers argue that different demands should be made on other countries during negotiations
- on issues including intellectual property, labour standards, dispute resolution or exchange rate
manipulation. I am sympathetic to the criticisms of TPP, but even if they were all correct they do
not justify the conclusion that signing the deal would increase the challenges facing the American
middle class.
The reason for the rise in US imports is not reduced trade barriers. Rather it is that emerging
markets are indeed emerging. They are growing in their economic potential because of successful economic
reforms and greater global integration.
These developments would have occurred with or without US trade pacts, though the agreements have
usually been an impetus to reform. Indeed, since the US does very little to reduce trade barriers
in our agreements, the impetus to reform is most of what foreign policymakers value in them along
with political connection to the US.
The truth too often denied by both sides in this debate is that incremental agreements like TPP
have been largely irrelevant to the fate of middle class workers. The real strategic choice Americans
face is whether the objective of their policies is to see the economies of the rest of the world
grow and prosper. Or, does the US want to keep the rest of the world from threatening it by slowing
global growth and walling off products and people?
Framed this way the solution appears obvious. A strategy of returning to the protectionism of
the past and seeking to thwart the growth of other nations is untenable and would likely lead to
a downward spiral in the global economy. The right approach is to maintain openness while finding
ways to help workers at home who are displaced by technical progress, trade or other challenges.
" The right approach is to maintain
openness while finding ways to help workers at home who are displaced by technical progress,
trade or other challenges."
People like Summers, DeLong, PGL and Krugman have been saying
this for 30 years ever since NAFTA was passed.
The voters no longer believe them. They're like the boy who cried wolf.
I would actually agree with the stance in general, if there
would be an actuall intention to help the affected
people/populations, but there is none. Retraining for yet
another job that doesn't exist (in sufficient volume so you
can realistically get it) is not help. It is just cover for
victim blaming - see we forgive you for choosing an incorrect
career, here is your next chance, don't blow that one too
(which we know "you will" as there are not enough jobs there
either).
Must-Read: Five things are going on with respect to
America's blue-, pink-, and--increasingly--white lower-middle
and middle-middle working classes. Three of them are real,
and two of them are fake:
Technology: It has--worldwide--greatly amplified
manufacturing labor productivity, accompanied by limited
demand for manufactured goods: few of us want more than one
full-sized refrigerator, and very very few of us want more
than two. That means that if you are hoping to be relatively
high up in the wage distribution by virtue of your position
as a hard-to-replace cog on a manufacturing assembly line,
you are increasingly out of luck. If you are hoping for high
blue-collar wages to lift your own via competition, you are
increasingly out of luck.
Legal and institutional bargaining power: The fact that
bargaining power has flowed to finance and the executive
suite and away from the shop- and assembly-floor is the
second biggest deal here. It could have been otherwise--this
is, primarily, a thing that has happened in English-speaking
countries. It has happened much less elsewhere. It could have
happened much less here.
Macro policy: Yes, the consequences of the Reagan deficits
were to cream midwestern manufacturing and destroy worker
bargaining power in export and import-competing industries.
Yes, the low-pressure economies of Volcker, late Greenspan,
and Bernanke wreaked immense damage. Any more questions?
Globalization: Globalization deepens the division of
labor, and does so in a way that is not harmful to
high-paying manufacturing jobs in the global north. The
high-paying manufacturing jobs that require skills and
expertise (as opposed to the lower-paying ones that just
require being in the right place at the right time with some
market power) are easier to create and hold on to if you can
be part of a globalized value chain than otherwise. This is
largely fake.
Trade agreements: This is a nothingburger: completely
fake.
As somebody who strongly believes that supply curves slope
up--are neither horizontal nor vertical--and that demand
curves slope down--are neither horizontal nor vertical--I
think that Larry Summers is misguided here when he talks
about how "companies have been able to drive harder bargains
with workers, particularly in unionised sectors, because of
the threat they can outsource." This was certainly true since
the 1950s with the move of American manufacturing to the
south, and the rise of deceptively-named "right-to-work"
laws. But the threat to outsource is zero-sum on a national
level: the balance of payments balances. Individual sectors
lose--and manufacturing workers have been big losers. But
that is, I think, only because of our macro policies. If we
were a normal global North manufacturing power--a Germany or
a Japan--exporting capital and running a currency policy that
did not privilege finance, he would not be talking a out how
"companies have been able to drive harder bargains with
workers, particularly in unionised sectors, because of the
threat they can outsource." He would be talking about how the
opportunity to participate in global value chains increases
the productivity of semi-skilled and skilled manufacturing
workers in the U.S.
Thus I think Larry conceded too much here. Blame macro
policy. Blame technology. Blame the conflict between the
market society's requirements that only property rights
matter and that everything pass a profitability test against
people's strong beliefs that even if they have no property
rights they have rights to stable communities, stable
industries, and stable occupations. But, to channel Pascal
Lamy, look not at the finger but at the moon here.
However, Larry is right on his main point: NAFTA really
ain't the problem:
Lawrence Summers: Revoking Trade Deals Will Not Help
American Middle Classes: "There is a debate to be had about
the impact of globalisation on middle class wages and
inequality...
For Delong to be right on trade, thousands of rust belt
politicians, journalists, and business leaders and a few
hundred thousand workers would have to be delusional.
He is
right in the sense that it is too late to revoke NAFTA, the
damage is done.
"it is never good to pass up an opportunity to remind
readers that the rise in inequality since 1980 has been
something that those who made the Reagan Revolution hoped
to accomplish and are proud of.
Bargaining power has flowed to finance and the
executive suite and away from the shop- and
assembly-floor. Top tax rates have come way down. It could
have been otherwise--this is, primarily, a thing that has
happened in English-speaking countries. It has happened
much less elsewhere. It could have happened much less
here."
The rise in income inequality was promoted by the Reagan
revolution. That in many ways was its purpose. It is also the
agenda of Paul Ryan and his "A Better Way".
We used to know how to lower trade barriers and welcome
new technology and have the benefits accrue to all. We lost
our political will some 35 years ago. And electing Trump has
not exactly regained our old mojo.
Manufacturing, manufacturing, manufacturing. Everybody misses
the BRONTOSAURUS in the room. 4% of jobs gone from automation
and trade - half and half -- true. But, 50% of employees have
lost 10% of overall income -- out of the 20% of a couple of
generations back.
(This reminds me of comparing EITC's 1/2
1% redistribution with 45% of workers earning less than $15
an hour.)
Could 50% of the workforce squeeze 10% of income back out
of the 49% who take 70% (14% of their earnings!)? They sure
could if they could collectively agree not to show up for
work otherwise. Could if the 49% in turn could squeeze 10%
out of the 1% (the infamous one percent) who lately take 20%
of overall income -- up from 10% a couple of generations
back.
(Does the Chicago Bears quarterback really need $126
million for seven years -- up from to top NFL paid Joe
Namath's $600,000 [adjusted truly] a couple of generations
back?)
Mechanism? Ask Germany (ask Jimmy Hoffa).
* * * * * *
In case nobody thought about it -- I never thought about
until Trump -- it goes like this. The NLRA(a) was written in
1935 leaving blank the use criminal sanctions for muscling
the labor market. Even if it did specify jail time for union
busting it is extremely arguable that state penalties for
muscling ANY persons seeking to collectively bargain (not
just union organizers and joiners following fed procedure)
would overlap, not violate federal preemption.
It seems inarguable -- under long established First
Amendment right to organize collective bargaining -- that
federal preemption cannot force employees down an organizing
road that is unarguably impassable, because unenforceable.
Upshot: states may make union busting a felony --
hopefully backed by RICO for persistent violators.
6% union density is like 20/10 blood pressure. It starves
every other healthy process.
In 1967-68 was working the waterfront in SF. Saw the crews of
Stevedores and Longshoremen load the ships; on the docks,
down in the holds, using boom winches, forklifts, and muscle
(dangerous work). By 1970, containerization had replaced 90%
of them. And, it continues with computerization of storage
and loading of containers (something I worked on in 1975).
Remember the nephew in the 'Wire'? One day a week if he was
lucky. David Simon knew of what he wrote.
One of the Michael Moore movies (probably but not sure
whether about Flint) made the point rather explicitly -
former manufacturing workers retrained as law enforcement or
prison officers perhaps for employment in other states or
"dealing with" their former colleagues driven to crime or at
least into the arms of the law enforcement system.
I expect that if you look at the pre-bellum South, there will
be plenty of examples of stagnant wages, low interest
rates...
In Mexico, wages never rose regardless of monetary
policy.
The point that I've been making for a while: despite a few
progressive economists delusions for rapid economic growth to
tighten wages, it won't happen for the following reasons.
1) most employers will just say 'no,' probably encouraged
centrally by the US Chamber of Commerce and other industry
associations. Collusion? You bet.
2) employers will just move jobs abroad, where there's
plenty of slack. Flexible labor markets has been one of the
big goals of globalization, promoted by the usual suspects
including 'librul' economists like Krugman.
3) immigration, which will be temporarily constrained as
Trump deports people, but will ultimately be resumed as
employers demand cheap, malleable labor.
I disagree. It happened in late 90s. The ideas you mention
are factors, including the decline of unions.
What has
happened in recent decades is that asset bubbles - like the
dot.com and housing bubbles - have popped sending a high
pressure economy into a low pressure one with higher
unemployment.
Neoliberal economists often talk about "flexible labor
markets" as desirable but I don't think Krugman ever has.
Maybe he has in a roundabout, indirect way.
Fed funds
rates were consistently about double the rate of inflation.
The fact that the economy boomed and wages increased was due
to the tech boom--an unrepeatable anomaly. The Fed and
Clinton administration unsuccessfully attempted to stifle it
with high rates and budget balancing.
To make sure that wages never rose again, Clinton signed
China PNTR, granting China access to WTO, ushering in the
great sucking sound of jobs going to China. Krugman cheered.
"Fed funds rates were consistently about double the rate
of inflation."
That doesn't matter. What matters is if they were
tightening or loosening. Where they reducing access to credit
or expanding it.
The real history is that Democrats on the FOMC wanted to
raise rates - as Dean Baker has discussed.
Greenspan decided not to raise rates for various reasons
and unemployment stayed low at around 4 percent with wages
sharing in productivity gains until the Dot.com stock bubble
popped.
I see no reason why you should believe labor markets will
never get tight again and that even if they do it won't lead
to increased worker bargaining power and higher wages.
There are numerous reasons why wages won't increase even if
labor markets tighten...you just don't want to acknowledge
the nefarious consequences of neoliberal policies: business
collusion, offshoring, immigration, and the tax system's
preference for returns of returns to capital over wages,
which preferences technology.
The real interest rate was around 2.5% per your own argument
which was a lot lower than real rates in the 1980's. So by
any reasonable standard - we did have easy money.
"Another round of tax and regulatory giveaways can create a
short-term boom," as part of the race to the bottom for
wages...IOW Republicans and their Democratic allies will have
succeeded when American wages are about the same as wages in
China or Mexico. But, per their logic, then jobs will be
plentiful because there will be no need to off-shore.
Yep...slavery is the most direct method of keeping wages low.
The policies I outlined--monopsony, offshoring, and
immigration--are all a fall back, to be used when industry
can't use their best policy.
If the neoliberal elite can't part with at least a small part
of their privileges, the political destabilization will
continue and they might lose everything.
"People of privilege will always risk their complete
destruction rather than surrender any material part of their
advantage." -- John Kenneth Galbraith
You may know that JK Galbraith served on the US' evaluation
of strategic bombings effect in WW II.
He is one of the
minority whose opinion was suppressed by the military
industry complex which concluded outside the A bomb no
relation to bombing and victory was proven, including both
industry output and energy production in Germany.
Allied bombing did kill a lot of civilians, which if
Germans or Japan had won bomber commanders would have been
hanged.
"...the political destabilization will continue and they
might lose everything."
Or they might find a way to end the
political destabilization. You know, we're not arresting you,
we just want to know, in the war on Muslim terrorists and
Mexican criminals, are you with us or against us? You'd be
surprised (or maybe you wouldn't!) how the question is enough
to quiet everybody down.
Tech jobs took it on the chin last year. Layoffs at computer, electronics, and telecommunications companies were
up 21 percent to 96,017 jobs cut in 2016
, compared to 79,315 the prior year.
Tech layoffs accounted for 18 percent of the total 526,915 U.S. job cuts announced in 2016, according to Challenger,
Gray & Christmas, a global outplacement firm based in Chicago.
Of the 2016 total, some 66,821 of the layoffs came from computer companies, up 7% year over year.
Challenger attributed much
of that increase to cuts made by Dell Technologies, the entity formed by the $63 billion convergence of Dell and EMC. In preparation
for that combination, layoffs were instituted across EMC and its constituent companies, including VMware.
Revoking trade deals will not help American middle classes
The advent of global supply chains has changed production
patterns in the US
by Larry Summers
FEBRUARY 5, 2017
Trade agreements have been central to American politics
for some years. The idea that renegotiating trade agreements
will "make America great again" by substantially increasing
job creation and economic growth swept Donald Trump into
office.
More broadly, the idea that past trade agreements have
damaged the American middle class and that the prospective
Trans-Pacific Partnership would do further damage is now
widely accepted in both major US political parties.
As Senator Daniel Patrick Moynihan once observed,
participants in political debate are entitled to their own
opinions but not their own facts. The reality is that the
impact of trade and globalisation on wages is debatable and
could be substantial. But the idea that the US trade
agreements of the past generation have impoverished to any
significant extent is absurd.
There is a debate to be had about the impact of
globalisation on middle class wages and inequality. Increased
imports have displaced jobs. Companies have been able to
drive harder bargains with workers, particularly in unionised
sectors, because of the threat they can outsource. The advent
of global supply chains has changed production patterns in
the US.
My judgment is that these effects are considerably smaller
than the impacts of technological progress. This is based on
a variety of economic studies, experience in hypercompetitive
Germany and the observation that the proportion of American
workers in manufacturing has been steadily declining for 75
years. That said I acknowledge that global trends and new
studies show that the impact of trade on wages is much more
pronounced than a decade ago.
But an assessment of the impact of trade on wages is very
different than an assessment of trade agreements. It is
inconceivable that multilateral trade agreements, such as the
North American Free Trade Agreement, have had a meaningful
impact on US wages and jobs for the simple reason that the US
market was almost completely open 40 years ago before
entering into any of the controversial agreements.
American tariffs on Mexican goods, for example, averaged
about 4 per cent before Nafta came into force. China had what
was then called "most favoured nation" trading status with
the US before its accession to the World Trade Organization
and received the same access as other countries. Before the
Korea Free Trade Agreement, US tariffs on Korea averaged a
paltry 2.8 per cent.
The irrelevance of trade agreements to import competition
becomes obvious when one listens to the main arguments
against trade agreements. They rarely, if ever, take the form
of saying we are inappropriately taking down US trade
barriers.
Rather the naysayers argue that different demands should
be made on other countries during negotiations - on issues
including intellectual property, labour standards, dispute
resolution or exchange rate manipulation. I am sympathetic to
the criticisms of TPP, but even if they were all correct they
do not justify the conclusion that signing the deal would
increase the challenges facing the American middle class.
The reason for the rise in US imports is not reduced trade
barriers. Rather it is that emerging markets are indeed
emerging. They are growing in their economic potential
because of successful economic reforms and greater global
integration.
These developments would have occurred with or without US
trade pacts, though the agreements have usually been an
impetus to reform. Indeed, since the US does very little to
reduce trade barriers in our agreements, the impetus to
reform is most of what foreign policymakers value in them
along with political connection to the US.
The truth too often denied by both sides in this debate is
that incremental agreements like TPP have been largely
irrelevant to the fate of middle class workers. The real
strategic choice Americans face is whether the objective of
their policies is to see the economies of the rest of the
world grow and prosper. Or, does the US want to keep the rest
of the world from threatening it by slowing global growth and
walling off products and people?
Framed this way the solution appears obvious. A strategy
of returning to the protectionism of the past and seeking to
thwart the growth of other nations is untenable and would
likely lead to a downward spiral in the global economy. The
right approach is to maintain openness while finding ways to
help workers at home who are displaced by technical progress,
trade or other challenges.
" The right approach is to maintain openness while finding
ways to help workers at home who are displaced by technical
progress, trade or other challenges."
People like Summers,
DeLong, PGL and Krugman have been saying this for 30 years
ever since NAFTA was passed.
The voters no longer believe them. They're like the boy
who cried wolf.
Economix - Explaining the Science of Everyday Life
Undoing the Structural Damage to Potential Growth
By JARED BERNSTEIN MARCH 3, 2014 11:00 AM
What follows is macroeconomics, but I'll start with the
micro - a microcosm, in fact, of the larger idea I'm hoping
to get at here.
I think it was around 1998, and I was on a tram between
terminals at O'Hare Airport in Chicago. Two young men, who
clearly worked for the airport (they had a bunch of badges
dangling around their necks) were trying to figure out how
they knew each other, while I eavesdropped. Turned out they
had met each other in prison.
At the time, I was beginning a research project on the
benefits of full employment, and my first thought was, "Aha -
another example of how tight labor markets pull in the
hard-to-employ." This was also the era of work-based welfare
reform, and while analysts worried that employers would avoid
those with welfare histories, strong demand turned out to an
antidote to such preferences.
Basically, profiling based on gender, race and experience
is a luxury that employers can't afford when the job market
is really tight. That is not to imply, of course, that
employers broadly discriminate, but there is strong evidence
that many do, most recently against the long-term unemployed.
In tight markets, however, they face a choice of indulging
their preferences or leaving profits on the table, and
profits usually win.
Now, put this story aside for a second and let's turn to
the macro. A few months ago, I reported on a study by a few
Federal Reserve economists with pretty striking results of
the damage done to the economy's future growth rate by the
deep and protracted downturn known as the Great Recession.
The Congressional Budget Office just published a similar
analysis, resulting in the chart below showing growth in
gross domestic product as projected in 2007, before the
recession, and a revised projection from this year. By 2017,
the budget office predicts that the new and decidedly
not-improved level of G.D.P. will be 7.3 percent below the
old projection.
What does 7.3 percent of lost gross domestic product
actually mean? Well, last year G.D.P. amounted to about $16.8
trillion, and 7.3 percent of that comes to around $1.2
trillion. Conventional estimates translate that into more
than 10 million jobs.
It would be very good to avoid that fate. The thing is,
both the Fed economists and the Congressional Budget Office
basically argue that while their estimates are admittedly
uncertain, that fate cannot be avoided - it's baked into the
economic cake by the assumption that once your trend growth
rate slows as ours has, it does not come back barring some
positive, unforeseen shock. Here is how the Fed guys put it:
Policy makers cannot undo labor market damage once it has
occurred, but must instead wait for it to fade away on its
own accord; in other words, there is no special advantage,
given this specification, to running a high-pressure economy.
I disagree! I think the damage can be at least partly
reversed precisely by running "a high-pressure economy." I
saw it myself that day in the airport.
Technically, I'm talking about "reverse hysteresis." When
a cyclical problem morphs into a structural one, economists
invoke the concept of hysteresis. When this phenomenon takes
hold, the rate at which key economic inputs like labor supply
and capital investment enter the economy undergoes a
downshift that lasts through the downturn and well into the
expansion, reducing the economy's speed limit. But what I'm
suggesting here is that by running the economy well below
conventional estimates of the lowest unemployment rate
consistent with stable inflation, and doing so for a while,
we can pull workers back in, raise their career trajectories,
improve their pay and their living standards, and turn that
downshift to an upshift that raises the level and growth rate
of G.D.P.
Won't that be inflationary? Three points. First, if
anything, the current economy is suffering from inflation
that is too low (same with Europe), so near-term
growth-oriented policy seems clearly safe in this regard.
Second, the precise relationship between full employment and
inflation is poorly understood. When that latter-1990s story
above was taking place, economists frequently and incorrectly
warned that full employment would dangerously juice
inflation. Third, the correlation between these two variables
- inflation and labor market tightness - has become far
weaker in recent years (i.e., the Phillips Curve has
flattened, for those who like the jargon).
How do we reverse the hysteresis process (which is to ask:
How do we get back to very tight labor markets)? In earlier
posts, I've suggested a number of policies that would help,
including investment in public goods, direct job creation,
reducing the trade deficit and work-sharing. Still, you may
well be wondering, "Wait a minute - this dude wants us to go
with him down this path because of a conversation he
overheard 16 years ago?"
O.K., I'll admit that the economic journals are not
busting with evidence in support of reverse hysteresis. But
those of us who closely monitored full-employment economies
have observed and documented significantly positive labor
supply and investment outcomes. (True, a lot of that
investment has flowed into bubbles; I'm not saying this idea
solves every problem.)
The employment rates for young African-American adults,
like the guys I saw in the airport, averaged around 70
percent in the 1970s and '80s, but hit 80 percent in the late
1990s; they are in the mid-60s now. The employment rates for
single mothers also hit new highs in those years. The labor
force participation rate, itself an important victim of
hysteresis right now, hit its all-time high at the end of the
1990s expansion. In other words, full employment pulled a lot
of new people into the job market.
As part of the full-employment project I'm running at the
Center on Budget and Policy Priorities (and have written
about before on this blog), a number of top economists are
looking into the relationships between fiscal policy, and
hysteresis and reverse hysteresis. They are coming up with
some compelling findings, which I'll share once they are
ready. For now, allow me to assert the following: We have
shown we can do a lot of economic damage. With the political
will, sorely lacking these days, it can also be undone.
"What does 7.3 percent of lost gross domestic product
actually mean? Well, last year G.D.P. amounted to about $16.8
trillion, and 7.3 percent of that comes to around $1.2
trillion. Conventional estimates translate that into more
than 10 million jobs."
Obama's Economic Disappointment by Narayana Kocherlakota
In January 2009, at the beginning of Obama's first term,
the nonpartisan Congressional Budget Office issued a 10-year
forecast for the U.S. economy, including such indicators as
unemployment, gross domestic product, the budget deficit,
government debt and interest rates. Here's a table comparing
the CBO's expectations for the year 2015 to what has actually
happened:
NGDP forecast to grow 33 percent, actually grew 22
percent.
"A final argument for gradually adjusting policy relates
to the desirability of achieving a prompt return of inflation
to the FOMC's 2 percent goal, an objective that would be
advanced by allowing the unemployment rate to decline for a
time somewhat below estimates of its longer-run sustainable
level. To a limited degree, such an outcome is envisioned in
many participants' most recent SEP projections. A tight labor
market may also work to reverse some of the adverse
supply-side developments resulting from the financial crisis.
The deep recession and slow recovery likely have held back
investment in physical and human capital, restrained the rate
of new business formation, prompted discouraged workers to
leave the labor force, and eroded the skills of the long-term
unemployed.15 Some of these effects might be reversed in a
tight labor market, yielding long-term benefits associated
with a more productive economy. That said, the quantitative
importance of these supply-side mechanisms are difficult to
establish, and the relevant research on this point is quite
limited."
"... Fig. 3a Income Share of U.S. Top 1% (Reich, 2013) & 3b Reich notes that the two peaks look like a suspension bridge, with highs followed by precipitous drops. (Original Source: Piketty & Saez, 2003) ..."
"... Paying for policy favors ..."
"... Removing constraints on dangerous behavior ..."
"... Increasing the public's vulnerability ..."
"... Increasing their own intake ..."
"... financial intermediaries. ..."
"... Or Ben Bernanke in his book "The Courage to Act": "Money is fungible. One dollar is like any other". ..."
"... "I adapted this general idea to show how, by affecting banks' loanable funds, monetary policy could influence the supply of intermediated ..."
"... no longer depend exclusively on insured deposits for funding, nondeposit sources of funding are likely to be relatively more expensive than deposits" ..."
"... The first channel worked through the banking system By developing expertise in gathering relevant information, as well as by maintaining ongoing relationships with customers, banks and similar intermediaries ..."
"... and thus hurt borrowers" (Bernanke [1983b]). ..."
"... A herding started by William McChesney Martin Jr, that thought "banks actually pick up savings and pass them out the window, that they are intermediaries ..."
"... obviously not so in any human activity. ..."
"... We believe Regenerative Economics can provide a unifying framework capable of galvanizing a wide array of reform groups by clarifying the picture of what makes societies healthy. But, this framework will only serve if it is backed by accurate theory and effective measures and practice. This soundness is part of what Capital Institute and RARE are trying to develop. ..."
"... haha, unfortunately it's the apex predator species that is in danger of sudden extinction as its prey declines. Of course the Darwinian analogy doesn't hold up well because Darwinian selection works on all individuals of a species without distinction. A much better analogy is a rigged game. ..."
According to a recent study by Oxfam International, in 2010 the top 388
richest people owned as much wealth as the poorest half of the world's
population– a whopping 3.6 billion people. By 2014, this number was down to
85 people. Oxfam claims that, if this trend continues, by the end of 2016
the top 1% will own more wealth than everyone else in the world combined. At
the same time, according to Oxfam, the extremely wealthy are also extremely
efficient in dodging taxes, now hiding an estimated $7.6 trillion in
offshore tax-havens.[3]
Why should we care about such gross economic
inequality?[4] After all, isn't it natural? The science of flow says: yes,
some degree of inequality is natural, but extreme inequality violates two
core principles of systemic health: circulation and balance.
Circulation represents the lifeblood of all flow-systems, be they
economies, ecosystems, or living organisms. In living organisms, poor
circulation of blood causes necrosis that can kill. In the biosphere, poor
circulation of carbon, oxygen, nitrogen, etc. strangles life and would cause
every living system, from bacteria to the biosphere, to collapse. Similarly,
poor circulation of money, goods, resources, and services leads to economic
necrosis – the dying off of large swaths of economic tissue that ultimately
undermines the health of the economy as a whole.
In flow systems, balance is not simply a nice way to be, but a set of
complementary factors – such as big and little; efficiency and resilience;
flexibility and constraint – whose optimal balance is critical to
maintaining circulation across scales. For example, the familiar branching
structure seen in lungs, trees, circulatory systems, river deltas, and
banking systems (Fig. 1) connects a geometrically constant ratio of a few
large, a few more medium-sized, and a great many small entities. This
arrangement, which mathematicians call a fractal, is extremely common
because it's particular balance of small, medium, and large helps optimize
circulation across different levels of the whole. Just as too many large
animals and too few small ones creates an unstable ecosystem, so financial
systems with too many big banks and too few small ones tend towards poor
circulation, poor health, and high instability.
In his documentary film, Inequality for All, Robert Reich uses virtuous
cycles to clarify how robust circulation of money serves systemic health. In
virtuous cycles, each step of money movement makes things better. For
example, when wages go up, workers have more money to buy things, which
should increase demand, expand the economy, stimulate hiring, and boost tax
revenues. In theory, government will then spend more money on education
which will increase worker skills, productivity and hopefully wages. This
stimulates even more circulation, which starts the virtuous cycle over
again. In flow terms, all of this represents robust constructive flow, the
kind that develops human and network capital and enhances well-being for
all.
Of course, economies also sometimes exhibit vicious cycles, in which
weaker circulation makes everything go downhill – i.e., falling wages,
consumption, demand, hiring, tax revenues, government spending, etc. These
are destructive flows, ones that erode system health.
Both vicious and virtuous cycles have occurred in various economies at
various times and under various economic theories and policy pressures. But,
for the last 30 years, the global economy in general and the American
economy in particular has witnessed a strange combination pattern in which
prosperity is booming for CEOs and Wall Street speculators, while the rest
of the economy – particularly workers, the middle class, and small
businesses – have undergone a particularly vicious cycle. Productivity has
grown massively, but wages have stagnated. Consumption has remained
reasonably high because, in an effort to maintain their standard of living,
working people have: 1) added hours, becoming two-income families, often
with two and even three jobs per person; and 2) increased household debt.
Inequality has skyrocketed because effective tax rates on the 1% have
dropped (notwithstanding a partial reversal under Obama), while their income
and profits have risen steeply.
We should care about this kind of inequality because history shows that
too much concentration of wealth at the top, and too much stagnation
everywhere else indicate an economy nearing collapse. For example, as Reich
shows (Figure 1a & b), both the crashes of 1928 and 2007 followed on the
heels of peaks in which the top 1% owned 25% of the country's total wealth.
Fig. 3a Income Share of U.S. Top 1% (Reich, 2013) & 3b Reich
notes that the two peaks look like a suspension bridge, with highs followed
by precipitous drops. (Original Source: Piketty & Saez, 2003)
What accounts for this strange mix of increasing concentration at the top
and increasing malaise everywhere else? Putting aside the parallels to 1929
for a moment, most common explanations for today's situation include: the
rise of technology which makes many jobs obsolete; and globalization which
puts incredible pressures on companies to lower wages and outsource jobs to
compete against low-wage workers around the world.
But, while technology and globalization are clearly creating
transformative pressures, neither of these factors completely explains our
current situation. Yes, technology makes many jobs obsolete, but it also
creates many new jobs. Yet, where the German, South Korean and Norwegian
governments invest in educating their workforce to fill those new jobs, the
American government has been cutting back on education for decades. A
similar thought holds for globalization. Yes, high-volume industrialism –
that is, head-to-head competition over price of mass-produced, uniform goods
– leads to a race to the bottom; that's been known for a long time. But in
The Work of Nations (2010), Robert Reich also points out that the companies
that are flourishing through globalization and technology are ones pursuing
what he calls high-value capitalism, the high-quality customization of goods
and services that can't be duplicated by mass-produced uniformity at cheap
places around the world.
So, while the impacts of globalization and technology are profound, the
real explanation for inequality lies primarily with an economic belief that,
intentionally or not, serves to concentrate wealth at the top by extracting
it from everywhere else. This belief system is called variously
neoliberalism, Reaganomics, the Chicago School, and trickle-down economics.
It is easily recognized by its signature ideas: deregulation; privatization;
cut taxes on the rich; roll back environmental protections; eliminate
unions; and impose austerity on the public. The idea was that liberating
market forces would cause a rising tide that lifted all boats, but the only
boat that actually rose was that of the .01%. Meanwhile, instability has
grown.
The impact this belief system has had on the American economy and its
capacities can be seen in American education. Trickle-down theories are all
about cutting taxes on the wealthy, which means less money for public
education, more young people burdened with huge college debt, and fewer
American workers who can fill the new high-tech jobs.
To be fair, this process is not just about greed. Most of the people who
participate in this economic debacle do not realize its danger because they
believed what they were told by the saints and sages of economics, and many
are rewarded for following its principles. So, what really causes the kind
of inequality that drives economies toward collapse? The basic answer from
the science of flow is: economic necrosis. But, let me flesh out the story.
Institutional economists talk about two main types of economic
strategies: extractive and solution-seeking. (Hopefully, these names are
self-explanatory.) Most economies contain both. But, if the extractive
forces become too powerful, they begin to use their power to rig the rules
of the economic game to favor themselves. This creates what scientists call
a positive feedback loop, one in which "the more you have, the more you
get." Seen in many kinds of systems, this loop creates a powerful pull that
sucks resources to the top, and drains it away from the rest of the system
causing necrosis. For example, chemical runoff into the Gulf of Mexico
accelerates algae growth. This creates an escalating, "the more you have,
the more you get" process, in which massive algae growth sucks up all the
oxygen in the surrounding area, killing all of the nearby sea life (fish,
shrimp, etc.) and creating a large "dead zone."
Neoliberal economics set up a parallel situation by allowing the wealthy
to use their money to extract ever more money from the overall economy. The
uber-wealthy grow wealthier by:
Paying for policy favors
– big corporate bailouts and
subsidies; lobbying; etc.
Removing constraints on dangerous behavior
– removing
environmental protections; not prosecuting financial fraud offenders;
ending Glass-Steagall, etc.
Increasing the public's vulnerability
– increasing
monopolistic power by diminishing antitrust regulations; limiting the
public's ability to sue big corporations; limiting Medicare's ability to
negotiate for lower pharmaceutical rates; limiting bankruptcy for student
loans, etc.
Increasing their own intake
– rising CEO salaries and
escalating Wall Street gambling; and limiting their own outflows –
externalizing costs, cutting worker wages and lowering their own taxes.
All of these processes help the already rich concentrate more, and
circulate less. In flow terms, therefore, gross inequality indicates a
system that has: 1) too much concentration and too little circulation; and
2) an imbalance of wealth and power that is likely to create ever more
extraction, concentration, unaccountability, and abuse. This process
accelerates until the underlying human network becomes exhausted and/or the
ongoing necrosis reaches a point of collapse. When this point is reached,
the society will have three choices: learn, regress, or collapse.
What then shall we do? Obviously, we need to improve our "solution
seeking" behavior in realms from business and finance to politics and media.
Much of this is already taking place. From socially-responsible business and
alternative forms of ownership, to democratic reform groups, alternative
media, and the new economy movement – reforms are arising on all sides.
But, the solutions we need are also often blocked by the forces we are
trying to overcome, and impeded by the massive merry-go-round momentum of
"business as usual." Today's reforms also lack power because they are taking
place piecemeal, in a million separate spots with very little cross-group
unity.
How do we overcome these obstacles? The science of flow offers not so
much a specific strategy, as an empowering change of perspective. In
essence, it provides a more effective way to think about the processes we
see every day.
The dynamics explained above are very well known; they are basic physics,
just like the law of gravity. Applying them to today's economic debates can
be extremely helpful because the latter have devolved into ideological
debates devoid of any scientific foundation.
We believe Regenerative Economics can provide a unifying framework
capable of galvanizing a wide array of reform groups by clarifying the
picture of what makes societies healthy. But, this framework will only serve
if it is backed by accurate theory and effective measures and practice. This
soundness is part of what Capital Institute and RARE are trying to develop.
System Dynamics of Steve Keene is clearly more useful than equilibrium
dogma. He predicted the 2008 crash, though I think he was only lucky ..
modeling is always only good for interpolation, never for extrapolation,
unless you are lucky enough to only be dealing with linear changes over
time.
POSTED: Dec 13 2007 06:55 PM |
The Commerce Department said retail sales in Oct 2007 increased by 1.2%
over Oct 2006, & up a huge 6.3% from Nov 2006.
10/1/2007,,,,,,,-0.47,,,,,,, -0.22 * temporary bottom
11/1/2007,,,,,,, 0.14,,,,,,, -0.18
12/1/2007,,,,,,, 0.44,,,,,,,-0.23
1/1/2008,,,,,,, 0.59,,,,,,, 0.06
2/1/2008,,,,,,, 0.45,,,,,,, 0.10
3/1/2008,,,,,,, 0.06,,,,,,, 0.04
4/1/2008,,,,,,, 0.04,,,,,,, 0.02
5/1/2008,,,,,,, 0.09,,,,,,, 0.04
6/1/2008,,,,,,, 0.20,,,,,,, 0.05
7/1/2008,,,,,,, 0.32,,,,,,, 0.10
8/1/2008,,,,,,, 0.15,,,,,,, 0.05
9/1/2008,,,,,,, 0.00,,,,,,, 0.13
10/1/2008,,,,,,, -0.20,,,,,,, 0.10 * possible recession
11/1/2008,,,,,,, -0.10,,,,,,, 0.00 * possible recession
12/1/2008,,,,,,, 0.10,,,,,,, -0.06 * possible recession
Trajectory as predicted:
BERNANKE SHOULD HAVE SEEN THIS COMING. IN DEC. 2007 I COULD.
With a simple spreadsheet projection of flows one can see a lot,
without fancy mathematics, using just simple difference equation
models, even models that display cyclical behavior. For example, with
any internal software development, the quantity of legacy applications
increase as they are created, unless retirement of legacy applications
is more rapid.
More often replacement occurs, rather than actual retirement. But
retirement of legacy applications is harder than you might think,
because of real dependency one can't retire them by fiat. The cost
of maintaining legacy applications, isn't zero. So with a fixed
software development/maintenance budget, the percentage of
expenditures to legacy applications approaches saturation, even
without figuring in the cost of replacement (similar to the rolling
over of loans vs retiring of loans). Short term maintenance using
patches, can only continue for so long, eventually wholesale
replacement is necessary.
Usually the only way to retire a legacy application is to produce a
newer and more expensive application, that itself has higher
maintenance costs. We dig the problem well deeper. Thus the
exponential decay of funds available for new development, or
replacement development, not only strangles new initiatives, but even
strangles the ability to maintain operations long term. That is why
there are still millions of lines of Cobol still working every day.
There is no free lunch, entropy reigns unless countered by new
forms of initiative. Usually the end result is an extension and
dilution of the problem, which then resumes decay on a larger scale.
This is what happens with the attempt to allay insurance costs by ever
larger pools, but there is a limit to the size of the pool, once that
limit is reached, the gambit no longer works. Long term problems
overwhelm short term solutions.
An exponentially increasing real economy covers all sins. In
absence of that, an exponentially increasing debt economy covers
all sins, temporarily because interest has a way of catching
up with you. See Greece.
Banks turned off the money spigot to developers by the start of
'07, if I recall. Developers and policy makers knew then there was a
recession, but the public was kept in the dark. After the market
crash, the consumers were punished instead of the Wall Street looters.
The only people who predicted the crisis were a handful of
post-Keynesians and Marxists. I'm more familiar with the work of the
latter, but for them it wasn't luck. They identified structural problems
with the economy that could not be fixed by simply utilizing stabilizers
(fiscal/monetary policy) and knew a massive crisis would occur once the
bubbles popped and exposed the real economy's underlying weakness. Some
believed that this crisis was the result of the tendency of the rate of
profit to fall and simultaneous downturns in the business cycle and the
profit cycle. I think the more convincing view is that low profit rates
in the manufacturing sector caused by a global crisis of
overproduction/under-utilization of capacity has meant that the real
economy has been weak since the 70's and that growth since then has come
from asset bubbles (Japanese real estate in the 80's, US stock market in
the 90's, US real estate in the 00's). These are problems that no amount
of fiscal stimulus can fix in the long run.
The author briefly touched on it. It's ALL about the circular flow of
savings. And the flow's stopped beginning in 1981, though really in 1966
(also Larry Summer's start of secular strangulation). That's why N-gDp
decelerated and there was a 35 year bull market in bonds.
You have to retain the capacity, like Albert Einstein, to hold two
thoughts in your mind simultaneously – "to be puzzled when they conflicted,
and to marvel when he could smell an underlying unity". "People like you and
me never grow old", he wrote a friend later in life. "We never cease to
stand like curious children before the great mystery into which we were
born".
The smartest man to walk on earth was Leland Pritchard, Ph.D. Chicago,
1933, Economics, MS, Syracuse, statistics.
All bank-held savings originate, and are impounded and ensconced, within
the commercial banking system. Say what? Yes, the CBs do not loan out
existing deposits, saved or otherwise. The CBs always create new money
whenever they lend/invest (loans + investments = deposits). Thus bank-held
savings are un-used and un-spent. They are lost to both consumption and
investment. From the standpoint of an individual bank, the institution is an
intermediary (micro-economics), however, from the standpoint of the
collective system of member banks (macro-economics), the institution is a
deposit taking, money creating, financial institution, DFI.
The upshot is profound. The welfare of the CBs is dependent upon the
welfare of the non-banks (the CB's customers). I.e., money (savings) flowing
through the NBs never leaves the CB system. Consequently the expansion of
"saved" deposits, in whatever deposit classification, adds nothing to a
total commercial bank's liabilities, assets, or earning assets (nor the
forms of these earning assets). And the cost of maintaining interest-bearing
deposit accounts is greater, dollar for dollar, than the cost of maintaining
non-interest-bearing demand deposits. Interest collectively for the
commercial banking system, is its' largest expense item (and thus its' size
isn't necessarily synonymous with its profitability).
This is the source of the pervasive error (and our social unrest, e.g.,
higher murder rates), that characterizes the sui generis Keynesian economics
(the Gurley-Shaw thesis), that there is no difference between money and
liquid assets.
The CBs & NBs have a symbiotic relationship. And so do the have's and
have not's. Unless the upper quintile's savings are expeditiously activated,
a corrosive degenerative economic impact is subsequently fostered.
The Golden Era in U.S. economics (Les trente glorieuses) was where
democratized pooled savings were expeditiously activated (put back to work)
and matched with real-investment, non-inflationary, outlets by the thrifts,
MSBs, CUs, and S&Ls (principally investments in long-term residential
mortgages). And in the good ol days, we had gov't incentivized, FSLIC safety
nets for non-bank conduits. Now we only have FDIC safety nets for the
commercial bank clientele (which further retards savings velocity).
I.e., "risk on" is not higher FDIC insurance coverage (the FDIC formally
modified the assessment base in 2011 to include all bank liabilities – which
along with the LCR, contracted the E-$ market), not increased Basel bank
capital adequacy provisioning (which literally destroys the money stock),
not an increased FDIC assessment fee on 1/1/2007, or 4/1/2009, or 4/1/2011,
or an increased churn in speculative stock purchases (the transfer of
ownership in existing assets).
This post laudably critiques wealth inequality, but it suffers from the
"Newtonia Delusion" that confuses economic thought in general through
metaphorical malapropism.
Physcial systems possess a determinism and time-invariant structure that
enables mathematical modelling. Economic systems are cultural artificacts
that are not time-invariant. Money is a cultural construct, a form of social
imagination and lacks any sort of deterministic attributes. Newtonian
metaphors of flow and accumulation restrict analytical illlumination even
though they enable quick and simple calculation.
Money is only one form of a "coordinate system" that enables the
measurement of forms of social interaction and cooperation. And it's
one-dimensional. This makes it useful given its parsimonious simplicity but
it badly restricts complete explanatory power. Physicists know the choice of
a coordinate systems influences measurements of phenomenon, and they
developed math techniques to neutralize that influence - I think use of
tensors in relativity is one example. Economics relies on "money" and
resultant ideas of "growth" or 'recessionn" because that's all it knows how
to do.
First, what does "collapse" mean in the context of the post. The word is
vague, undefined and subject to a multitude of interpretations - that's not
"scientific" at all. "Wealth" is also vague. Presumably it means possession
of assets that can be converted into money, so in effect is uses "money" as
a sole coordinate basis, and that's reasonable as a form of dimensional
reduction, but it fails to measure the implied asset value of any sort of
social safety net available to those without assets. That's no rationale for
inequality - and anybody wants a job more than a safety net - but it's a
logical flaw. Third, the nature of economic structures and cultural
relations isn't easily quantifiable or translateable into money; living in a
just, fair and inclusive society has an intrinsic value that defies easy
measurement through the "money basis". Measuring relies instead on
application of a sense of justice and honest sensibility.
It would be bettter to start analysis with a non-monetary vision of the
social rights any citizen of a community should have access to. This form of
thinking in fact was the normal and dominant form over most of human
history, when people lived in non-monetary tribal structures. And what their
implied responsibilities are to gain that accesss. Use that as a
time-invariant basis and then introduce money but only as one method of
measurement of economic change, there could be other social indicators that
might be used as coordinate systems too; use of these could result in very
different measurements of ecoonomic phenomeenon than result with the money
basiis. That would force the sort of thinking that's required for analytical
clarity and ompleteness, but that doesn't exist in economics
(See I can bang out a comment that doesn't mention jungle boogie butts or
hot women! Calling women hot isn't bad, as long as it's respectful and
flattering and inclusive. Women in general are hot! What do you want? to
live in a world full of gay guys or what? Hahaha. Sorry I can't help it.)
Turchin has been working on proxies, to get some measures of
well-being and political instability. One measure of social rights could
be the right to live, so life expectancy could be used. Dead is dead and
is a hard number. Chicago police historically have a different criteria
of what my rights are than I do, so the ecological measures can avoid
such definitional fuzziness.
Another Turchin point relevant to the post is that in-group variance
is only meaningful used as a multiplier of in-group selection, and in
context of other groups. Extreme inequality does not necessarily cause
economic collapse, and coherent elites consistently crush popular
revolts. The "the more you have, the more you get" feedback loop can also
be seen as a consolidation and success of a certain trait ("rich"), and a
re-sort of within-group dynamics (national citizenry) to between-group
dynamics (haves & nots).
(Also, economics does not concern itself with ompleteness, as rational
actors cannot be omplete, and an agent who is omplete often withdraws
from economic systems.)
I believe that biggest problem in economics is not the dogma created
by money(though its a problem of Course) , but rather biggest problem is
lack of a clearly defined goal. "Economic development" ,which is
generally termed as goal of economics , is very ambiguous and this
ambiguity is creating problems.
Physcial systems possess a determinism and time-invariant structure
that enables mathematical modelling. Economic systems are cultural
artificacts that are not time-invariant.
Very, very few physical systems involve time invariant modeling.
Almost every physical system represented by a mathematical model
describes how that system changes with time. Otherwise it wouldn't be a
very useful model. Few things can be said to be at steady state and even
when they are it is usually a simplification, not an outgrowth of time
invariance. For example a chemical reaction A + B-> C at rate k1 and C ->
A + B at rate k2 is said to be at equilibrium (steady state) when k1=-k2.
Even at steady state the reaction is proceeding in both directions and
can be thrown out of equilibrium by a change in concentration,
temperature, volume, or any host of other factors. After the shock the
system will again tend towards an equilibrium but there is no requirement
that the new equilibrium be the same as the last one. And all the
equations that describe how we went from equilibrium 1 to 2 all involve
time. Neoclassical morons obsessed with equilibrium seam to be confused
by this and assume time is irrelevant and that full employment will
always return.
Economists are pretty much the only people I see that try to use time
invariant models. I think it is a great step forward that economists like
Keen have been trying to use the full spectrum of time variant models.
The fact that the models are relatable to models of other physical
systems is more an outgrowth of calculous than anything else.
I actually was out today doing stuff & plan to go star gazing
tonite!
What I meant is the equations that map the movement of the moon and
planets or heat diffusion or chemical reactions or sound propagation
worked in November 1887 the same way they'll work in July 2020.
Of course experimental measurements change through time, depending
on the phenomenon being measured. But the natural phenomenon modeled
by the equations themselves are time invariant as are the equations,
or science wouldn't work. That's why they're called natural laws.
Now wait a minute here. While I appreciate getting my terms
correct and such – frame invariant, yeah, that's what I need to
know – craazyman is a gift not to be distracted or encouraged
wrongly. Yes, his posting clarified the great lie of most
economic theory and its teaching and modeling, but his calling
is greater than that. "jungle boogie butts or hot women" are
rare on this site and should not be lightly diverted. Not that
I'm implying that our hostess or commentators of the female
persuasion aren't "hot women" or that jungle boogie butts aren't
finance, economics, politics, or power, but based on past
personal history, if I tried a craazyman, or even a craazyboy,
posting, I would be forever marked as hopeless.
Physical systems can be time-variant in that way too, it's
called a regime shift. We have observed that in several real
natural systems. In some cases apparent randomness actually is very
complicated but fully deterministic dynamics. Look up "bifurcation
diagram". Mathematical analysis can deal with that too.
Instead of the monetary system and flow, the analysis of human
populations, including the production and exchange of the fruits of
their labour, should start with the amount of cooperation as the
driving variable (or coordinate as you prefer to say)?
Odd that education investment is shown in the article as part of the loop
between employment and consumer spending. That is a very slow regenerative
path compared with the direct effect of employment, spending, and labor
demand.
The article wastes time extolling circulation merely because it resembles
that in natural systems such as tigers, but these do not necessarily serve
human interests. It benefits most people simply because they need the inputs
and outputs.
just institute a progressive tax on bank assets above-say-$700 billion.
would literally only affect a handful of banks and do much to rein in the
seize of the megabanks.
oh wait, all these banks are blue state banks (JPM, C, WFC, BAC) and
friends w/Schumer, Pelosi and Uncle Warren owns big chunks in WFC and AXP.
Capitalism is a balance between supply and demand but we only put
in half a system.
1) Money at the top is mainly investment capital as those at the top can
already meet every need, want or whim. It is supply side capital.
2) Money at bottom is mainly consumption capital and it will be spent on
goods and services. It is
demand side capital.
Marx noted the class struggle between the two sides that neither can win,
to do so destroys the system, either supply or demand will cease to exist.
The balance has yet to be recognised and we flick between the two sides
until everything crashes into the end stops.
Before the 1930s – Supply Side, Neoclassical Economics
By the 1920s, productivity has reached a stage where supply exceeds
demand and extensive advertising is required to manufacture the demand for
the excess supply.
Taxes are lowered on the wealthy and there is an excess of investment
capital which pours into the US stock market. The banks get in on the act
and use margin lending to fuel this boom in US stocks.
There is a shortage of consumption capital and the necessary consumption
can only be maintained with debt.
1929 – Wall Street Crash
The investment capital was used to blow an asset bubble and not for
productive investment, it all ends in tears. The Great Depression is the
debt deflation that follows from an economy saturated with debt.
After the 1930s – Demand Side, Keynesian Economics
The New Deal starts the turnaround of the US economy and after the Second
World War there is the Golden Age of the 1950s and 1960s. Redistributive
capitalism looks after the demand side of the equation.
With the target of full employment, the unions start to abuse their power
and by the 1970s we enter into stagflation. There is a shortage of
investment capital and demand exceeds supply leading to inflation, there is
not enough investment capital to redress the balance.
After the 1980s – Supply Side, Neoclassical Economics
Taxes are lowered on the wealthy and there is an excess of investment
capital which pours into various different asset classes and the first round
of crashes occur in the late 1980s. Leading to an early 1990s recession.
There is a shortage of consumption capital and the necessary consumption
can only be maintained with debt.
After the early 1990s recession the speculative, investment capital look
for another bubble to blow and finds the new dot.com companies.
Housing booms take off around the world, a speculative bubble for
everyone to get involved with and the UK and Japan have already been through
their first boom/bust by 1989.
Wall Street get's into 1920s mode and leverages up the speculative bubble
that is occurring there.
2008 – Wall Street Crash
The West is laid low and growth is concentrated in the East but they
start to use debt to keep things running.
Even with the Central Banker's best efforts the global economy falls into
the new normal of secular stagnation, the debt repayments are a constant
drag on the global economy.
2017 – World's eight richest people have same wealth as poorest 50%
All that investment capital with almost nowhere to invest due to the lack
of demand.
We just swing from the supply side, to the demand side and back
again until we crash into the end stops.
We could recognise the system requires a balance between supply
and demand.
a balance in real time, not over decades with crashes and booms
harder to do globally than nationally which is prolly why nationalism is
rising it was China imploding c. 2008 that brought the growth of the
global economy to a stop, I read somewhere .anyway the growth-forever
premise of globalism was nuts. Not even the push for austerity by the
neoliberals could make the required adjustments – and not for lack of
trying. Yes a new balance (good shoes ;-) is what we need. One that
understands the old saying 'form follows function' and create a
functioning economy, the scaffold of a new sustainable human society. One
in which banking actually follows the economy.
It's not a math error, it's an accounting error. It wasn't
precipitated as Alan Greenspan pontificated in his book "The Map
and the Territory", viz., FDR's Social Security Act. It wasn't
Nixon who introduced "indexing". It wasn't because from 1959 to
1966 the federal gov'ts net savings was in a rare surplus. It
wasn't because between 1965 & 2012 total gross domestic savings (as
a percent of gDp) declined from 22% to 13% (9 percentage points).
No, the New York Times sobriquet, the "Three-Card Maestro's"
error, like all other Keynesian economists, is the macro-economic
persuasion that maintains a commercial bank is a financial
intermediary (conduit between savers and borrowers matching savings
with investment):
Greenspan: "Much later came the evolution of finance, an
increasingly sophisticated system that enabled savers to hold
liquid claims (deposits) with banks and other
financial
intermediaries.
Those claims could be invested by
banks in in financial instruments that, in turn, represented the
net claims against the productivity enhancing tools of a complex
economy. Financial intermediation
was born"
Or Ben Bernanke in his book "The Courage to Act": "Money is
fungible. One dollar is like any other".
"I adapted this general idea to show how, by affecting
banks' loanable funds, monetary policy could influence the supply
of
intermediated
credit" (Bernanke and
Blinder, 1988)."
For example, although banks and other
intermediaries
no longer depend exclusively on insured deposits for funding,
nondeposit sources of funding are likely to be relatively more
expensive than deposits"
The first channel worked through the banking system By
developing expertise in gathering relevant information, as well as
by maintaining ongoing relationships with customers, banks and
similar intermediaries
develop "informational
capital."
"that the failure of financial institutions in the Great
Depression increased the cost of
financial intermediation
and thus hurt borrowers" (Bernanke [1983b]).
A herding started by William McChesney Martin Jr, that
thought "banks actually pick up savings and pass them out the
window, that they are
intermediaries
in the
true sense of the word."
From the standpoint of an individual bank (micro-economics), a
bank is an intermediary, however, from the standpoint of the entire
economy, the system process (macro-economics), a bank is a deposit
taking, money creating, financial institution.
The promulgation of commercial bank interest rate deregulation
(banks introducing liability management, buying their liquidity,
instead of following the old fashioned practice of storing their
liquidity), i.e., the removal of Reg. Q ceilings (the non-banks
were already deregulated until 1966), by the oligarch – the ABA,
(public enemy #1), or an increasing proportion of time to
transaction deposits liabilities within the DFIs, metastasized
stagflation and secular strangulation. Remunerating IBDDs
exacerbates this phenomenon (as subpar R-gDp illustrates).
I.e., every time a commercial bank buys securities from, or
makes loans to, the non-bank public it creates new money – deposit
liabilities, somewhere in the system. I.e., deposits are the result
of lending, and not the other way around. Bank-held savings are
un-used and un-spent. They are lost to both consumption and
investment. Unless savings are expeditiously activated outside of
the system (and all savings originate within the payment's system),
thru non-bank conduits, said savings exert a dampening economic
impact (destroying saving's velocity & thus AD). I.e., savings
flowing thru the non-banks, never leaves the CB system.
Craazyman says it all, but I have to say it too, just for my own mental
health.
How often do social "scientists" have to make this same mistake? Biology
is not physics, and human society is biology, and economics is not even
close to accurately describing human society, not even the economics part of
it.
Equilibria are achieved, and thermodynamic laws obeyed, on much greater
and on much smaller scales than an economy, which is not even a system, per
se. Life is anti-entropic, but the universe, the solar system, is not.
Communities are not "social networks." Terry Pratchett as usual brings
common sense to bear on metaphors like this. Metaphor, you know, using words
to convey something like the truth, but not exactly: "Oh, so it's a lie,
then."
You have just lost me. Of course economics is a complex system but it
is a system nonetheless. Wynne Godley's sectoral balance model is an
excellent example of a systems approach to economics, and it's precisely
the systems peoperties that attract me to it. MMT is a systems approach
by design and easily approached mathematically in that way if desired. I
have often considered how I would do it but no doubt there is someone
more able to do it than me.
The bonus of a systems approach would be the possibility of a
multitude of possible equilibrium states, some could be fixed, some
oscillatory if they include feedback with delay.
The author could also consider adding futile cycles to her list of
cycles, long recognised by biochemists.
Craazyman says it above. A "system of pulleys" is a system. A
"solar system" is a system. A galaxy, a liter of sodium bicarbonate
solution under defined temperature and pressure conditions, these are
systems. How is "economics" a system? What is it even a system of? Can
you define the parameters of even one of the aspects of economics in
some way that does not "leak energy" through every other aspect of
human activity, which is not accounted for in some way by the "system"
of economics? You can try, but you can't do it. That is why economics
is scientific just like astrology: it describes and explains
everything, but its only prediction is more jobs for its
practitioners.
There are "closed" and "open" systems. The behavior of the
former can be modeled and understood; the latter, less so (possible
only to some extent, and heavily dependent on the intellectual
framework that you bring to the table).
My experience is opposite. Usually in systems approaches most of
the detail can be ignored until it becomes important. They do not
require knowing the details of the system, instead they try to
simplify as far as is practical. Systems approaches attempt to
infer micro from gross macro behaviour. This is fundentally
opposite to orthodox economics. Godley's model illustrates this
well. You don't need to know details about every transaction
because parameters for aggregated transactions can be inferred from
macro data. You don't need to assume anything about motivations of
individuals or firms, but if necessary you could try to infer them.
I clearly need to go and do reading on open systems, because
understanding them makes for a richer intellectual life, like
poetry, or skimming rocks. For me, the chafing starts when
people try to apply a rigorous, mathematically based
scientifically accepted reproducible set of theories like those
of fluid dynamics (itself by no means fully elaborated) to a
field where the described system cannot be even be defined by
consensus.
What, for instance, exactly constitutes an "economic system,"
or a "system of economics," or an "economy"? Where is the
universally accepted definition of something even as basic as
money, a definition with scientific reliability, like the
definition of an atom in 1930? They just aren't there. You can
tell me yours, but it will not be the same as his, or hers. If
real scientists behaved that way, there could be no
breakthroughs: without a definition, there is nothing even solid
enough to break through.
And by scientific, I just have to fall back on Popper,
however old-fashioned that may seem. The propositions of
economics, like those of astrology and sociology, and also of
human nutrition, and so many other fields flogged by their
practitioners, remain unaccompanied by experimental
methodologies that result in reliable predictions of
reproducible results. They are therefore prolific with
unfalsifiable claims. They are, therefore, fraudulent at worst
and noisy at best, at a time where the direction of the public
discourse is increasingly controlled by central authorities with
agendas. A signal among the noise is harder and harder to
distinguish without the further impediment of additional
publish-or-perish verbiage which will be, more often than not,
weaponized by an interest group, if that was not actually the
reason for its creation to begin with.
Systematizers of non-scientific systems are either virtuous
"pre-scientists" or frauds. What they claim as the wider social
value of their work is the discriminating test. Alchemy and
astrology of yore ultimately evolved into chemistry and
astronomy, without actually contributing much information as
such: but without the need to make magic or gold from powders,
alembics, crucibles, and retorts, those tools moved into hands
directed by serious, patient minds, where they produced useful
and reliable information. (Not that circus entertainment,
handwaving, and noise were not great disseminators and
motivators of science, and remain so today!)
Until the dynamics of human society and psychology have been
fully described by anthropology, there will not be a
"fundamental atomic theory" for Economics to use to underpin its
scientific pretensions. It still rests completely on
demonstrably untrue assumptions, rules that can be proven not to
apply to human behavior. Most recently, the use of the "normal
curve" as generally applicable to economic "systems," because of
its near-universal employment in statistics, had catastrophic
results. This was easily predicted by anyone who has worked with
the normal curve; the Central Limit Theorem that underpins the
normal curve assumes that the assembled variables are
independent, not related functions of each other; and this is
obviously not so in any human activity.
So much of the
use of the normal curve is nothing more than hand-waving
hocus-pocus.
No serious reputable historian would claim any longer to be a
scientist, and if he did, he would be no true Scotsman, either.
But then, despite what I seem to be doing on these forums,
neither would a professionally trained historian think to
dictate public policy by appealing to the systematic rigor of
his craft.
Economists today should modestly retreat from their claims to
exercise any influence on public policy and direct their efforts
elaborating a true science. I believe that may never happen; and
I personally fear the unintended consequences that will result
from the political use of the kind of knowledge about human
motivations and collective activity that will be required to
bring it about; maybe less, however, than I fear nuclear war or
planetary desolation through aggressive environmental
destruction, which may be the alternative outcomes to that kind
of advance.
Money velocity falls because more and more savings are impounded and
ensconced within the payment's system. This started in 1981 with the
plateau in deposit financial innovation, the widespread introduction of
ATS, NOW, and MMDA accounts. Thus money velocity, formally a monetary
offset, started decelerating dropping N-gDp with it (and producing the 35
year bull market in bonds).
This should be evident with the remuneration of IBDDs beginning in
Oct. 2008. I.e., the 1966 S&L credit crunch is the economic paradigm and
precursor (lack of funds, not their cost). The "complete evaporation of
liquidity" on 8/9/2007 for BNP Paribas, "runs on ABCP money funds",
"shortage of safe, liquid, assets", "the funding crunch forced fire
sales", "efforts to replace funding that had evaporated in the panic",
i.e., non-bank dis-intermediation (an outflow of funds or negative cash
flow).
"Our goal was to increase the supply of short-term funding to the
shadow banking system"
Ben Bernanke, August 10, 2007:
"Our goal is to provide liquidity not to support asset prices per se
in any way. My understanding of the market's problem is that price
discovery has been inhibited by the illiquidity of the subprime-related
assets that are not trading, and nobody knows what they're worth, and so
there's a general freeze-up. The market is not operating in a normal way.
The idea of providing liquidity is essentially to give the market some
ability to do the appropriate repricing it needs to do and to begin to
operate more normally. So it's a question of market functioning, not a
question of bailing anybody out."
I.e., Bankrupt u Bernanke doesn't know a credit from a debit. Bad Ben
was solely responsible for the world-wide GR. My "market zinger" forecast
of Dec. 2012 foretold of the expiration of unlimited transaction deposit
insurance (putting savings back to work), not a "taper tantrum, not
budget "sequestration".
Seems like a sales-pitch to the 1% trying to convince the 1% that sharing
would be good .. I have my doubts about that strategy, the 1% respects power
and care very little (if anything at all) for the common good. Use the power
of the many in an democracy and force through the needed changes.
Continuing the model of a firm that requires software to function. If
the executives of the firm keep taking expensive vacations at the expense
of the firm, starving the software development/maintenance department of
resources .. then even if there were no other systemic problems, the firm
will fail (unless bailed out by a greater entity, as happened in
2008/2009). But in the end, who will be big enough, after we have
extended the risk pool to the entire planet, to bail out the planet, from
foolish management? I would suggest that the Roman Empire failed because
it was unable to overcome either long term systemic trends, nor
irresponsible management.
Inequality is directly correlated to corruption and the U.S. has an
exceeding corrupt political economy, hence the extreme inequality. Germany
and Japan, to take two prime examples, are part of the same global system
and are subject to the same forces, technology, corporate tax arbitrage
strategies, etc but neither of them have any where near the inequality of
the U.S. It's also worth noting they don't have financial grifters like Mitt
Romney and Steven Schwarzman amongst their most esteemed citizens.
So yes, it is all pretty complicated but at the end of the day the U.S.
is one of the most corrupt countries on Earth, certainly the most corrupt of
the Western democracies so our problems are no surprise. All this talk about
globalization, tax policy, education and technology are all distractions.
And that doesn't even begin to touch on the subject of our monetary system
which is at the root of the corruption.
Right on! – And the corruption is permitted, even encouraged, by the
"greed is good" philosophical basis of mainstream economics, and the
concentration of both media ownership and campaign finance and lobbying
in the hands of the wealthy.
Yes, this does deserve some kind of award for expressing a simple idea in
a pointlessly complicated way. When I was studying economics in the
paleolithic era, we were taught about the "propensity to consume" – in other
words the idea that the poorer you were the more of any extra income you
would spend as opposed to save. So if you give everyone on the minimum wage
20% more, then they will probably put it straight back into the economy. If
you give billionaires 20% more they probably won't. The more widely wealth
is spread, the more of it will be spent. This isn't a scientific law, but
it's an observation borne out by common sense.
Even Henry Ford, not exactly known for his altruism or philanthropy,
knew it made sense to give his workers a significant rise so that they
could afford the cars they were building for him.
I can't read this whole post this morning - but - my one note tune:
6% labor union density in non-gov work is like 20/10 blood pressure
:
it starves every other healthy process - even while starving the employee
herself.
Easy way back: if the 1935 Congress had intended (they didn't) to leave
any criminal enforcement of NLRA prohibited union busting to individual
states - Congress would not have had to change one word of the NLRA. States
in fact were left to make any form of collective bargaining (NLRA connected
or not) muscling an economic felony. There is no problem of federal
preemption when the area has been left blank.
Nor may the fed force local labor down an impassable road to union
organizing - because rules of road unenforceable and unenforced - when a
First Amendment protected right is at stake. To state that clearly: the
First Amendment is violated when government insists on a mode of action that
dismembers freedom of economic association before it starts.
I think he's saying more unions are needed, but the Federal
Government left it up to the states to stop the union busting,
which they have declined to do. The Feds can't enforce union
membership or collective bargaining as that would violate the first
amendment right to free association.
[cut-and-paste]
America should feel perfectly free to rebuild labor union density one
state at a time - making union busting a felony. Republicans will have
no place to hide.
Suppose the 1935 Congress passed the NLRA(a) intending to leave any
criminal sanctions for obstructing union organizing to the states.
Might have been because NLRB(b) conducted union elections take place
local by local (not nationwide) and Congress could have opined states
would deal more efficiently with home conditions - or whatever. What
extra words might Congress have needed to add to today's actual bill?
Actually, today's identical NLRA wording would have sufficed
perfectly.
Suppose, again, that under the RLA (Railroad Labor Act - covers
railroads and airlines, FedEx) - wherein elections are conducted
nationally - that Congress desired to forbid states criminalizing the
firing of organizers - how could Congress have worded such a
preemption (assuming it was constitutionally valid)? Shouldn't matter
to us. Congress did not!
"Renewable energy" is obviously the foundation of Regenerative Economics,
simply because energy itself is the foundation of all economics (as well as
of all life and of the "active" part of the universe). Yet all the focus on
renewable energy in recent years has done little or nothing to stop
escalating economic inequality.
I think a big thing missing from RARE is a theory and program for power.
What we need are institutional values and structures that will keep greed
under control without much effort. This means not just getting the
incentives right, but also the "political revolution" that will be needed to
implement them.
So I think not just about limits-to-growth but about the need for partial
universal ownership of all the major sources of wealth, combined with
limited stakeholder ownership (fossil fuels, large corporations, etc).
We believe Regenerative Economics can provide a unifying framework
capable of galvanizing a wide array of reform groups by clarifying the
picture of what makes societies healthy. But, this framework will only
serve if it is backed by accurate theory and effective measures and
practice. This soundness is part of what Capital Institute and RARE are
trying to develop.
Accuracy of analytical method aside, who will implement it? Who can? Not
those 8 dudes with 1/2 the world's wealth.
That depends on what kind of inequality you're talking about. Men
being paid $10/hr and women $8/hr to perform the same task is an
example of "binary" inequality. Either everyone is paid the same wage
(before the first performance review anyway) or they are not.
Income inequality is a bit different. If a CEO takes home 20 x more
per year than the lowest paid worker in the company income equality is
low (way lower than in any modern capitalist economy) if the CEO makes
300 x as much as the lowest paid worker, it is high. Income equality –
everyone being paid the same wage regardless of what they're doing to
earn it – is not the goal. Rather, it is reducing the gap between the
lowest and highest paid members of society.
Only jet settesr get the advantages of civilization at its heights. My
own partial solution has been an airport nation that advances flying
literacy and availability.
There is an amorphous factor arising out of the defined structure and
standard rights afforded travelers & businesses based on a separate airport
nation. (I admit this amorphous factor which causes me some presentation
problems.)
No human system will function without a common committed belief in it.
Airport movement of people & parcels is simpler to make comprehensive.
For example I have difficulty in attempting to expand passenger service in
NC because the corporation Norfolk Southern was given power to inhibit it
while getting the advantages of state responsibilities created with a buyout
of a rail company state company where it was controlled by shareholders.
A trick was done on us with the collusion of legislators.
We can simply say the RR as analogous is a matured industry to the point of
immaturity compared to an international airport accommodating both
freighters & passenger airliners.
These things will not directly make an economic theory, but are about
economic activity as enabled from basic port theory & the sociology of
ports.
For instance I advise women in nations prone to put them at a disadvantage
to put business offices on international airports which tend to be more
culturally neutral.
Appreciated the author's thought-provoking observations about the effects
of extreme concentration of wealth, with its enormous feedback loops and low
circulation of money that materially reduce the overall debt servicing
capacity of the private sector. But I also felt that she understated the
roles that private sector debt growth, central bank monetary policy, asset
price speculation and manipulation, and financial fraud have historically
played in causing economic collapse.
Playing Devil's Advocate I suppose you could argue that there is
something Darwinian about the way things are nowadays.
Apex predators are indeed flourishing and in a curious way they are
searching further afield and adapting to new 'food sources' as those closer
to home become less appealing, less nourishing and less worth the effort of
expending the energy trying to exploit, particularly when other tastier
morsels are so plentiful and readily available elsewhere.
Maybe we should just all get with the programme, know our places in the
grand scheme of things and resign ourselves to our evolutionary fate?
haha, unfortunately it's the apex predator species that is in
danger of sudden extinction as its prey declines. Of course the Darwinian
analogy doesn't hold up well because Darwinian selection works on all
individuals of a species without distinction. A much better analogy is a
rigged game.
Our problem is that the rich really suck. They are greedy and I would not
be surprised if many were psychologically diagnosed with anti social
personality disorder. They are without integrity and would fight tooth and
nail for their pilfered money.
But the status quo is like the Congo under Mobut Sese Seko. It is a
society build on kleotocracy. Like any such society, it is inherently
unstable with money going to a few.
The late 1960s had problems. The costs of the Vietnamese War, the excess
deficit spending, and the dependence on Middle Eastern oil all lead to
problems in the 1970s.
"As Paul Samuelson stressed, that assumption [propensity to equilibrium]
is necessary for economics to be science, as in mathed up, and the dominance
that economists have achieved is due to their scientific appearances and the
fact that their mathematical exposition enables them to dismiss lay
critics."
Why? Non-equilibrium is accessible to maths.
In branching systems such the one imagined for monetary flow in this
article, growth in the number of nodes at the terminals (and thus necrosis
of excess of nodes) is controlled/limited by the number of terminals of the
branching, let's call these capillaries, that can be accommodated inside the
volume of the whole versus the number of nodes than can be accommodated
inside the whole. Since the total number of capillaries grow at a lower rate
than the number of nodes as the volume of the whole increases, growth is
limited and excess growth in times of higher volume of the whole suffers
necrosis when the volume of the whole shrinks.
International science collaboration growing at astonishing rate: Cross-border studies more
than doubled in 15 years
OHIO STATE UNIVERSITY
BOSTON - Even those who follow science may be surprised by how quickly international collaboration
in scientific studies is growing, according to new research.
The number of multiple-author scientific papers with collaborators from more than one country
more than doubled from 1990 to 2015, from 10 to 25 percent, one study found. And 58 more countries
participated in international research in 2015 than did so in 1990.
"Those are astonishing numbers," said Caroline Wagner, associate professor in the John Glenn
College of Public Affairs at The Ohio State University, who helped conduct these studies.
"In the 20th century, we had national systems for conducting research. In this century, we
increasingly have a global system."
Wagner presented her research Feb. 17 in Boston at the annual meeting of the American Association
for the Advancement of Science.
Even though Wagner has studied international collaboration in science for years, the way it
has grown so quickly and widely has surprised even her.
One unexpected finding was that international collaboration has grown in all fields she has
studied. One would expect more cooperation in fields like physics, where expensive equipment (think
supercolliders) encourages support from many countries. But in mathematics?
"You would think that researchers in math wouldn't have a need to collaborate internationally
- but I found they do work together, and at an increasing rate," Wagner said.
"The methods of doing research don't determine patterns of collaboration. No matter how scientists
do their work, they are collaborating more across borders."
In a study published online last month in the journal Scientometrics, Wagner and two co-authors
(who are both from The Netherlands) examined the growth in international collaboration in six
fields: astrophysics, mathematical logic, polymer science, seismology, soil science and virology.
Their findings showed that all six specialties added between 18 and 60 new nations to the list
of collaborating partners between 1990 and 2013. In two of those fields, the number of participating
nations doubled or more.
The researchers expected astrophysics would grow the most in collaboration, given the need
to use expensive equipment. But it was soil science that grew the most, with a 550 percent increase
in the links between research groups in different countries in that time period.
"We certainly didn't expect to see soil science have the fastest growth," she said.
"But we saw strong increases in all areas. It appears that all the fields of science that we
studied are converging toward similar levels of international activity."
The study found that virology had the highest rate of collaboration, with the most countries
involved. "They aren't working together because they need to share expensive equipment. They're
collaborating because issues like HIV/AIDS, Ebola and Zika are all international problems and
they need to share information across borders to make progress."
Wagner has started a new line of research that attempts to determine how much nations benefit
from their scientific work with other countries. For this work, she is looking at all the scientific
articles that a nation's scientists published with international collaborators in 2013. She is
looking at each article's "impact factor" - a score that measures how much other scientists mentioned
that study in their own work.
"How much recognition a study gets from other scientists is a way to measure its importance,"
Wagner said.
She compared each nation's combined impact factor for its international collaborations to how
much money the same country spent on scientific research. This is a way to determine how much
benefit in terms of impact each nation gets for the money it spends.
The United States has the highest overall spending and shows proportional returns. However,
smaller, scientifically advanced nations are far outperforming the United States in the relationship
between spending and impact. Switzerland, the Netherlands and Finland outperform other countries
in high-quality science compared to their investment. China is significantly underperforming its
investment.
Wagner said this isn't the only way to measure how a country is benefiting from international
science collaboration. But it can be one way to determine how efficiently a country is using its
science dollars.
In any case, Wagner said her findings show that international science collaboration is becoming
the way research gets done in nearly all scientific fields.
"Science is a global enterprise now," Wagner said.
Certain center-left Hillary fanboys like yuan, EMichael etc will point out that exit polls
show how the poor voted for Hillary (as if that somehow proves that she's great for the poor.
PGL would always point to how the poor blacks of the south were voting for Hillary in the primary.)
Probably has something to do with the large populations of poor and working poor in metro areas.
And Republicans aren't great for the poor.
But exit polls said Hillary did much better with the educated. The more educated voted for
her, the less educated voted for Trump.
Also Hillary won the "high-output" counties, not the poor counties:
"Last week, as my colleague Sifan Liu and I were gnawing on some questions asked by Jim Tankersley
of The Washington Post, we happened upon a revealing aspect of the election outcome. While looking
at number of influences on the presidential vote outcome, we found that in a year of massive divides,
one particular economic split stands out.
Our observation: The less-than-500 counties that Hillary Clinton carried nationwide encompassed
a massive 64 percent of America's economic activity as measured by total output in 2015. By contrast,
the more-than-2,600 counties that Donald Trump won generated just 36 percent of the country's
output-just a little more than one-third of the nation's economic activity."
The high-output and educated will continue with globalization thanks in part to the Internet
and globalization while the religious and less-educated turn inwards and try to turn back the
clock.
We need fair trade and for globalization to mean shared prosperity and progress not corporate
rule for the one percent.
There needs to be an International of the Sanders supporters, and the supporters of Corbyn
and Benoit Hamon.
Those wallowing in the center-left need to decide whether they support barbarism or socialism.
Which is the lesser evil?
"... First of all, the unemployment rate in the USA actually increased from 4.7% to 4.8%, despite the job growth. ..."
"... Simply put, due to the way the Bureau of Labour Statistics is gathering its data, almost 700,000 people have been 'removed' from the civilian population. The total size of the civilian population is rebalanced on a yearly basis, in January. ..."
"... The smaller size of the civilian population caused the labor force participation rate to increase by 0.2%, and this by itself caused the unemployment rate to increase as well, despite the job creation number. ..."
"... But perhaps even more important is the extremely disappointing update on the average hourly earnings ('AHE') . The AHE increase fell to just 0.1% in January on a month/month comparison, but the real catch is in the details. ..."
Ever since the gold report was published, the gold price moved up. This caught several investors
by surprise, as some of them even continued to dump gold, scared by what appeared to be a good jobs
report.
'Appeared to be', because?
Yes, 227,000 new jobs
were created , and we can't deny that's a positive evolution. However, the increased job number
is also the only positive thing in the jobs report, and there are two other issues that haven't really
been highlighted.
Two issues that could, and probably will, have an impact on the interest rate decisions later
this year.
First of all, the unemployment rate in the USA actually increased from 4.7% to 4.8%, despite
the job growth.
How is that possible?
Simply put, due to the way
the Bureau of Labour Statistics
is gathering its data, almost 700,000 people have been 'removed' from the civilian population.
The total size of the civilian population is rebalanced on a yearly basis, in January.
Source: Bureau of Labor Statistics
The smaller size of the civilian population caused the
labor force participation rate
to increase by 0.2%, and this by itself caused the unemployment rate to increase as well, despite
the job creation number.
And as the unemployment rate is one of the key factors the Federal Reserve is looking at to determine
whether or not a rate hike is appropriate, this small increase could have an impact on the decision
making process. And keep in mind this is the second consecutive increase in the unemployment rate
as the December unemployment rate also came in higher than the unemployment rate in November (and
this did not include any population rebalancing exercise).
But perhaps even more important is the extremely disappointing update on the
average hourly earnings
('AHE') . The AHE increase fell to just 0.1% in January on a month/month comparison, but the
real catch is in the details.
Exactly because the 0.1% increase is focusing on a monthly update, the revision of the wage increase
in December is actually telling you something more serious is going on. The December wages have been
revised down by 0.2%, so if that would NOT have happened, the average hourly wage would have DECREASED
in January.
Another good article by Rodrik but a weakness of his analysis is that welfare is assumed to be
based upon real income and not relative income with ones "group".
Most analyses of welfare find that relative income is quite important. Obviously if one assumes
that one's reference group is the world, then the problem goes away; but empirically this is not
the case.
Assuming that welfare is strongly affected by relative income with a group which is smaller
than the world, then global equality is no longer welfare maximizing.
"... By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet ..."
"... The following is an excerpt from the new book ..."
"... by Henry Heller (Pluto Press, December 2016): ..."
"... Inside Higher Education ..."
"... The University, State and Market: The Political Economy of Globalization in the Americas ..."
"... New Left Review ..."
"... The Field of Cultural Production: Essays on Art and Literature ..."
"... Letters from the Deutsch-Französische Jahrbücher ..."
"... Anti-Communism in Twentieth-Century America ..."
"... Marxism is still regarded with suspicion in the United States. ..."
"... As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. ..."
How Universities Are Increasingly Choosing Capitalism Over Education
Posted on
February 7, 2017
by
Yves Smith
Yves here. Some further observations. First, the author neglects to mention
the role of MBAs in the reorientation of higher education institutions. When
I went to school, the administrative layer of universities was lean and not
all that well paid. Those roles were typically inhabited by alumni who
enjoyed the prestige and being able to hang around the campus. But t
he
growth of MBAs
has meant they've all had to find jobs, and colonizing
not-for-profits like universities has helped keep them off the street.
Second, this post focuses on non-elite universities, but the same general
pattern is in play, although the specific outcomes are different.
Universities with large endowments are increasingly hedge funds with an
educational unit attached.
By Henry Heller, a professor of history at the University of
Manitoba, Canada and the author of The Capitalist University. Cross posted
from
Alternet
The fact that today there are over 4,000 colleges and universities in the
United States represents an unparalleled educational, scientific, and
cultural endowment. These institutions occupy a central place in American
economic and cultural life. Certification from one of them is critical to
the career hopes of most young people in the United States. The research
produced in these establishments is likewise crucial to the economic and
political future of the American state. Institutions of higher learning are
of course of varying quality, with only 600 offering master's degrees and
only 260 classified as research institutions. Of these only 87 account for
the majority of the 56,000 doctoral degrees granted annually. Moreover, the
number of really top-notch institutions based on the quality of their
faculty and the size of their endowments is no more than 20 or 30. But
still, the existence of thousands of universities and colleges offering
humanistic, scientific, and vocational education, to say nothing of
religious training, represents a considerable achievement. Moreover, the
breakthroughs in research that have taken place during the last two
generations in the humanities and social sciences, not to speak of the
natural sciences, have been spectacular.
But the future of these institutions is today imperiled. Except for a
relatively few well-endowed universities, most are in serious financial
difficulty. A notable reason for this has been the decline in public
financial support for higher education since the 1980s, a decline due to a
crisis in federal and state finances but also to the triumph of right-wing
politics based on continuing austerity toward public institutions. The
response of most colleges and universities has been to dramatically increase
tuition fees, forcing students to take on heavy debt and putting into
question access to higher education for young people from low- and
middle-income families. This situation casts a shadow on the implicit
post-war contract between families and the state which promised upward
mobility for their children based on higher education. This impasse is but
part of the general predicament of the majority of the American population,
which has seen its income fall and its employment opportunities shrink since
the Reagan era. These problems have intensified since the financial collapse
of 2008 and the onset of depression or the start of a generalized capitalist
crisis.
Mounting student debt and fading job prospects are reflected in
stagnating enrollments in higher education, intensifying the financial
difficulties of universities and indeed exacerbating the overall economic
malaise.[1] The growing cost of universities has led recently to the
emergence of Massive Online Open Courses whose upfront costs to students are
nil, which further puts into doubt the future of traditional colleges and
universities. These so-called MOOCs, delivered via the internet, hold out
the possibility, or embody the threat, of doing away with much of the
expensive labor and fixed capital costs embodied in existing university
campuses. Clearly the future of higher education hangs in the balance with
important implications for both American politics and economic life.
The deteriorating situation of the universities has its own internal
logic as well. In response to the decline in funding, but also to the
prevalence of neoliberal ideology, universities-or rather the presidents,
administrators, and boards of trustees who control them-are increasingly
moving away from their ostensible mission of serving the public good to that
of becoming as far as possible like private enterprises. In doing so, most
of the teachers in these universities are being reduced to the status of
wage labor, and indeed precarious wage labor. The wages of the non-tenured
faculty who now constitute the majority of teachers in higher education are
low, they have no job security and receive few benefits. Although salaried
and historically enjoying a certain autonomy, tenured faculty are losing the
vestiges of their independence as well. Similarly, the influence of students
in university affairs-a result of concessions made by administrators during
the upheavals of the 1960s and 1970s-has effectively been neutered. These
changes reflect a decisive shift of power toward university managers whose
numbers and remuneration have expanded prodigiously. The objective of these
bureaucrats is to transform universities as much as possible to approximate
private and profit-making corporations, regarded as models of efficient
organization based on the discipline of the market. Indeed, scores of
universities, Phoenix University for example, have been created explicitly
as for-profit businesses and currently enroll millions of students.
Modern universities have always had a close relationship with private
business, but whereas in the past faculty labor served capital by producing
educated managers, highly skilled workers, and new knowledge as a largely
free good, strenuous efforts are now underway to transform academic
employment into directly productive, i.e., profitable, labor. The knowledge
engendered by academic work is accordingly being privatized as a commodity
through patenting, licensing, and copyrighting to the immediate benefit of
universities and the private businesses to which universities are
increasingly linked. Meanwhile, through the imposition of administrative
standards laid down in accord with neoliberal principles, faculty are being
subjected to unprecedented scrutiny through continuous quantified evaluation
of teaching and research in which the ability to generate outside funding
has become the ultimate measure of scholarly worth. At the same time,
universities have become part of global ranking systems like the Shanghai
Index or the Times Higher Education World University Rankings in which their
standing in the hierarchy has become all important to their prestige and
funding.
Several intertwined questions emerge from this state of affairs. In the
first place, given the rising expense and debt that attendance at university
imposes and declining employment prospects especially for young people, will
there continue to be a mass market for higher education? Is the model of the
university or college traditionally centered on the humanities and the
sciences with a commitment to the pursuit of truth compatible with the
movement toward converting the universities into quasi- or fully private
business corporations? Finally, what are the implications of changes in the
neoliberal direction for the future production of objective knowledge, not
to speak of critical understanding?
Universities during the Cold War produced an impressive amount of new
positive knowledge, not only in the sciences, engineering, and agriculture
but also in the social sciences and humanities. In the case of the
humanities and social sciences such knowledge, however real, was largely
instrumental or tainted by ideological rationalizations. It was not
sufficiently critical in the sense of getting to the root of the matter,
especially on questions of social class or on the motives of American
foreign policy. Too much of it was used to control and manipulate ordinary
people within and without the United States in behalf of the American state
and the maintenance of the capitalist order. There were scholars who
continued to search for critical understanding even at the height of the
Cold War, but they largely labored in obscurity. This state of affairs was
disrupted in the 1960s with the sudden burgeoning of Marxist scholarship
made possible by the upsurge of campus radicalism attendant on the anti-war,
civil rights, and black liberation struggles. But the decline of radicalism
in the 1970s saw the onset of postmodernism, neoliberalism, and the cultural
turn. Postmodernism represented an unwarranted and untenable skepticism,
while neoliberal economics was a crude and overstated scientism. The
cultural turn deserves more respect, but whatever intellectual interest
there may be in it there is little doubt that the net effect of all three
was to delink the humanities and social sciences from the revolutionary
politics that marked the 1960s. The ongoing presence in many universities of
radicals who took refuge in academe under Nixon and Reagan ensured the
survival of Marxist ideas if only in an academic guise. Be that as it may,
the crisis in American society and the concomitant crisis of the
universities has become extremely grave over the last decade. It is a
central contention of this work that, as a result of the crisis,
universities will likely prove to be a key location for ideological and
class struggle, signaled already by the growing interest in unionization of
faculty both tenured and non-tenured, the revival of Marxist scholarship,
the Occupy Movement, the growing importance of the Boycott, Divestment, and
Sanctions movement, and heightening conflicts over academic freedom and the
corporatization of university governance.
The approach of this work is to examine the recent history of American
universities from the perspective of Marxism, a method which can be used to
study these institutions critically as part of the capitalist economic and
political system. Despite ongoing apologetics that view universities as
sites for the pursuit of disinterested truth, we contend that a critical
perspective involving an understanding of universities as institutions based
on the contradictions of class inequality, the ultimate unity of the
disciplines rooted in the master narrative of historical materialism, and a
consciousness of history makes more sense as a method of analysis. All the
more so, this mode of investigation is justified by the increasing and
explicit promotion of academic capitalism by university managers trying to
turn universities into for-profit corporations. In response to these
policies scholars have in fact begun to move toward the reintegration of
political economy with the study of higher education. This represents a turn
away from the previous dominance in this field of postmodernism and cultural
studies and, indeed, represents a break from the hegemonic outlook of
neoliberalism.[2] On the other hand, most of this new scholarship is
orientated toward studying the effects of neoliberalism on the contemporary
university, whereas the present work takes a longer view. Marxist political
economy demands a historical perspective in which the present condition of
universities emerged from the crystallization of certain previous trends. It
therefore looks at the evolution of the university from the beginning of the
twentieth century, sketching its evolution from a preserve of the
upper-middle class in which research played almost no role into a site of
mass education and burgeoning research, and, by the 1960s, a vital element
in the political economy of the United States.
In contrast to their original commitment to independence with respect to
the state up to World War II, most if by no means all universities and
colleges defined their post-war goals in terms of the pursuit of the public
good and were partially absorbed into the state apparatus by becoming
financially dependent on government. But from start to finish
twentieth-century higher education also had an intimate and ongoing
relationship with private business. In the neoliberal period universities
are taking this a step further, aspiring to turn themselves into quasi- or
actual business corporations. But this represents the conclusion of a
long-evolving process. The encroachment of private business into the
university is in fact but part of the penetration of the state by private
enterprise and the partial privatization of the state. On the surface this
invasion of the public sphere by the market may appear beneficial to private
business. We regard it, on the contrary, as a symptom of economic weakness
and a weakening of civil society.
The American system of higher education, with its prestigious private
institutions, great public universities, private colleges and junior
colleges, was a major achievement of a triumphant American republic. It
provided the U.S. state with the intellectual, scientific, and technical
means to strengthen significantly its post-1945 power. The current
neoliberal phase reflects an America struggling economically and politically
to adapt to the growing challenges to its global dominance and to the crisis
of capitalism itself. The shift of universities toward the private corporate
model is part of this struggle. Capitalism in its strongest periods not only
separated the state from the private sector, it kept the private sector at
arm's length from the state. The role of the state in ensuring a level
playing field and providing support for the market was clearly understood.
The current attempt by universities to mimic the private sector is a form of
economic and ideological desperation on the part of short-sighted and
opportunistic university administrators as well as politicians and
businessmen. In our view, this aping of the private sector is misguided,
full of contradictions, and ultimately vain if not disastrous. Indeed, it is
a symptom of crisis and decline.
The current overwhelming influence of private business on universities
grew out of pre-existing tendencies. There is already an existing corporate
nature of university governance both private and public, as well as an
influence of business on universities in the first part of the twentieth
century. In reaction there developed the concept of academic freedom as well
as the establishment of the system of tenure and the development of a rather
timid faculty trade unionism. This underscores the importance of private
foundations in controlling the development of the curriculum and research in
both the sciences and humanities. In their teaching, universities were
mainly purveyors of the dominant capitalist ideology. Humanities and social
science professors imparted mainly liberal ideology and taught laissez-faire
economics which justified the political and economic status quo. The
development of specialized departments reinforced the fragmentation of
knowledge and discouraged the emergence of a systemic overview and critique
of American culture and society. There were, as noted earlier, a few Marxist
scholars, some of considerable distinction, who became prominent
particularly in the wake of the Depression, the development of the influence
of the Communist Party, and the brief period of Soviet-American cooperation
during World War II. But the teaching of Marxism was frowned upon and
attacked even prior to the Cold War.
The post-1945 university was a creation of the Cold War. Its expansion,
which sprang directly out of war, was based on the idea of education as a
vehicle of social mobility, which was seen as an alternative to the equality
and democracy promoted by the populism of the New Deal. Its elitist and
technocratic style of governance was patterned after that of the large
private corporation and the American federal state during the 1950s. Its
enormously successful research programs were mainly underwritten by
appropriations from the military and the CIA. The CIA itself was largely
created by recruiting patriotic faculty from the universities. Much of the
research in the social sciences was directed at fighting Soviet and
revolutionary influence and advancing American imperialism abroad. Marxist
professors and teaching programs were purged from the campuses.
Dating from medieval times, the curriculum of the universities was based
on a common set of subjects including language, philosophy, and natural
science premised on the idea of a unitary truth. Although the subject matter
changed over the centuries higher education continued to impart the
hegemonic ideology of the times. Of course the notion of unitary truth was
fraying at the seams by the beginning of the twentieth century with the
development of departmental specialization and the increasingly contested
nature of truth, especially in the social sciences in the face of growing
class struggle in America. However, the notion of the idea of the unity of
knowledge as purveyed by the university was still ideologically important as
a rationale for the existence of universities. Moreover, as we shall
demonstrate, it was remarkable how similarly, despite differences in subject
matter and method, the main disciplines in the humanities and social
sciences responded to the challenge of Marxism during the Cold War. They all
developed paradigms which opposed or offered alternatives to Marxism while
rationalizing continued loyalty to liberalism and capitalism. As if on cue,
sociology, psychology, literature, political science, and anthropology all
took sides by explicitly rejecting Marxism and putting forward viewpoints
opposed to it. History itself stressed American exceptionalism, justified
U.S. expansionism, minimized class conflict, and warned against revolution.
Indeed, this work will focus on these disciplines because they defended the
capitalist status quo at a deeper cultural and intellectual level than the
ubiquitous mass media. As Louis Althusser pointed out, the teaching received
by students from professors at universities was the strategic focal point
for the ideological defense of the dominant class system. That was as true
of the United States as it was of France, where institutions of higher
learning trained those who would later train or manage labor. Criticizing
the recent history of these disciplines is thus an indispensable step to
developing an alternative knowledge and indeed culture that will help to
undermine liberal capitalist hegemony.[3]
The approach of this work is to critically analyze these core academic
subjects from a perspective informed by Pierre Bourdieu and Karl Marx.
Bourdieu points out that the deep involvement of the social sciences (and
the humanities) with powerful social interests makes it difficult to free
their study from ideological presuppositions and thereby achieve a truly
socially and psychologically reflexive understanding.[4] But such reflexive
knowledge was precisely what Marx had in mind more than a century earlier.
Leaving a Germany still under the thrall of feudalism and absolutism for
Paris in 1843, the young Marx wrote to his friend Arnold Ruge that
reason has always existed, but not always in a reasonable form but,
if constructing the future and settling everything for all times are not
our affair, it is all the more clear what we have to accomplish at
present: I am referring to ruthless criticism of all that exists,
ruthless both in the sense of not being afraid of the results it arrives
at and in the sense of being just as little afraid of conflict with the
powers that be.[5]
His task as he saw it was to criticize the existing body of knowledge so
as to make it as reasonable as possible, i.e., to undermine its illusory and
ideological character and substitute knowledge which was both true and
helped advance communism. Such a project entailed deconstructing the
existing body of knowledge through rational criticism, exposing its
ideological foundations and advancing an alternative based on a sense of
contradiction, social totality, and a historical and materialist
understanding. It is our ambition in surveying and studying the humanities
and social sciences in the period after 1945 to pursue our investigation in
the same spirit. Indeed, it is our view that a self-reflexive approach to
contemporary knowledge, while woefully lacking, is an indispensable
complement to the development of a serious ideological critique of the
crisis-ridden capitalist society of today.
Marxism is still regarded with suspicion in the United States. As a
matter of fact, anti-Marxism in American universities was not merely a
defensive response to McCarthyism as some allege. Anti-communism was bred in
the bone of many Americans and was one of the strongest forces that affected
U.S. society in the twentieth century, including the faculty members of its
universities. An
idée fixe
rather than an articulated ideology, it
was compounded out of deeply embedded albeit parochial notions of
Americanism, American exceptionalism and anti-radicalism.[6] The latter was
rooted in the bitter resistance of the still large American middle or
capitalist class to the industrial unrest which marked the late nineteenth
and early twentieth centuries and which had a strong bed of support among
the immigrant working class. Nativism then was an important tool in the
hands of this class in fighting a militant if ethnically divided working
class. Moreover, the anti-intellectual prejudices of American society in
general and the provincialism of its universities were ideal terrain for
fending off subversive ideas from abroad like Marxism. Later, this
anti-communism and hostility to Marxism became the rationale for the
extension of American imperialism overseas particularly after 1945. The
social origins of the professoriate among the lower middle class,
furthermore, and its role as indentured if indirect servants of capital,
strengthened its position as inimical to Marxism. Just as careers could be
lost for favoring Marxism, smart and adroit academics could make careers by
advancing some new intellectual angle in the fight against Marxism. And this
was not merely a passing feature of the height of the Cold War: from the
1980s onward, postmodernism, identity politics, and the cultural turn were
invoked to disarm the revolutionary Marxist politics that had developed in
the 1960s. Whatever possible role identity politics and culture might have
in deepening an understanding of class their immediate effect was to
undermine a sense of class and strengthen a sense of liberal social
inclusiveness while stressing the cultural obstacles to the development of
revolutionary class consciousness.
This overall picture of conformity and repression was, however, offset by
the remarkable upsurge of student radicalism that marked the 1960s,
challenging the intellectual and social orthodoxies of the Cold War. In
reaction to racism and political and social repression at home and the
Vietnam War abroad, students rebelled against the oppressive character of
university governance and by extension the power structure of American
society. Overwhelmingly the ideology through which this revolt was refracted
was the foreign and until then largely un-American doctrine of Marxism.
Imported into the universities largely by students, Marxism then inspired a
new generation of radical and groundbreaking scholarship. Meanwhile it is
important to note that the student revolt itself was largely initiated by
the southern civil rights movement, an important bastion of which were the
historically black colleges of the South. It was from the struggle of
racially oppressed black students in the American South as well as the
growing understanding of the anti-colonial revolutionaries of Vietnam that
the protest movement in American colleges and universities was born. Equally
important was the Free Speech Movement at Berkeley. Indeed, it is the
contention of this work that the issues raised at Berkeley over democracy in
the universities and the free expression of ideas not only shaped the
student movement of that time but are still with us, and indeed are central
to the future of universities and intellectual life today.
At the heart of the Berkeley protest lay a rejection of the idea of a
university as a hierarchical corporation producing exchange values including
the production of trained workers and ideas convertible into commodities.
Instead the students asserted the vision of a democratic university which
produced knowledge as a use value serving the common good. It is our view
that this issue raised at Berkeley in the 1960s anticipated the class
conflict that is increasingly coming to the fore over so-called knowledge
capitalism. Both within the increasingly corporate neoliberal university and
in business at large, the role of knowledge and knowledge workers is
becoming a key point of class struggle. This is especially true on
university campuses where the proletarianization of both teaching and
research staff is in process and where the imposition of neoliberal work
rules is increasingly experienced as tyrannical. The skilled work of these
knowledge producers, the necessarily interconnected nature of their work,
and the fundamentally contradictory notion of trying to privatize and
commodify knowledge, have the potential to develop into a fundamental
challenge to capitalism.
Notes:
1. Paul Fain, "'Nearing the Bottom': Inside Higher Education,"
Inside
Higher Education
, May 15, 2014.
2. Raymond A. Morrow, "Critical Theory and Higher Education: Political
Economy and the Cul-de-Sac of the Postmodernist Turn," in
The
University, State and Market: The Political Economy of Globalization in the
Americas
, ed. Robert A. Rhoads and Carlos Alberto Torres, Stanford:
Stanford University Press, 2006, pp. xvii‒xxxiii.
3. Perry Anderson, "Components of the National Culture,"
New Left
Review
, No. 50, July‒August, 1968, pp. 3–4.
4. Pierre Bourdieu,
The Field of Cultural Production: Essays on Art
and Literature
, New York: Columbia University Press, 1993, pp. 86–7.
Capitalism requires that total strangers be on the hook for student
loans? And if this is Capitalism then why didn't this trend emerge 100+
years ago? Why now?
Because a) the market for a college degree is vastly bigger today than
it was 100+ years ago b) tuitions were affordable so there was no way for
high-interest lenders ("total strangers") to game the system as they do
today.
Plus I wonder if the legal system or tax code would have let them get
away with anything like what they get away with today.
I agree with everything dude says, but the way he says it is so deathly
dull and needlessly technical . . .
it's a shame that someone so openly critical of the university system and
culture nonetheless unquestioningly obeys the tradition of: "serious writing
has to turn off 99% of the people that might be otherwise interested in the
subject."
Yes, his writing caused this reader to do a MEDGO ("my eyes doth gloss
over")
It was technical in its assertions, but has few metrics to quantify
the trends such as inflation adjusted administrative cost or inflation
adjusted government college funding now vs then.
There is a mention that the USA government has touted the "upward
mobility" or excess value, AKA "consumer surplus", of a college degree to
students and their families for years.
The US government further encouraged the student loan industry with
guarantees and bankruptcy relief de-facto prohibited.
The current system may illustrate that colleges raised their prices to
capture more of this alleged consumer surplus, a surplus that may no
longer be there..
If one looks at the USA's current political/economic/infrastructure
condition, and asserts that the leaders and government officials of the
USA were trained, overwhelmingly, over the last 40 years, in the USA's
system of higher education, perhaps this is an indication USA higher
education has not served the general public well for a long time.
The author mentions this important point "These so-called MOOCs,
delivered via the internet, hold out the possibility, or embody the
threat, of doing away with much of the expensive labor and fixed capital
costs embodied in existing university campuses. Clearly the future of
higher education hangs in the balance with important implications for
both American politics and economic life."
Maybe the MOOCs are the low cost future as the 4 year degree loses
economic value and the USA moves to a life-long continuous education
model?
And that rate doesn't even mention what scores they achieved.
MOOCs are hopeless especially since college is now less about
getting an education and more about a statement about a young
person's lifestyle or identity.
Now sure about the `now' bit. I maybe a bit cynical but I've
always thought, even when I was at one, that
colleges/universities major function was as a middle-class
finishing school for those unable to afford the real deal in
Switzerland.
I do not agree and it is deathly dull and needlessly technical. In
fact it remains me off the marxistic education I enjoyed growing up in
East Germany.
Maybe it is time to rethink after school education. Physical Labor should
loose its stain of being for loosers and stupid people. A whole lot of
professions could be better taught through apprentiships and technical
college mix.( many younge people would maybe enjoy being able to start
qualified work after only 3 additional years of education).
And do we really need 12 years of standard school education? There are so
many kids that do not function well in school.
Universities should be for the really eager and talented who want to
spend a big part of
their youth learning.
I guess we need a lot of new ideas to get away from the old paradigma (
anti- marxist or marxist)
I don't know how you read other works from academics if you think that
this
was dull.
Do you or anyone thinking this was "dull" have any examples of
academic essays or books that contain useful knowledge but also consider
them "shiny?"
Personally, I thought this was a very good essay as it explains some
things I've been thinking about American higher education and quite a few
things about my personal university education at a tier-1 research
school.
Basically universities have become a cog in the machine of neoliberalism.
Rather than anything resembling an institution for the public good, it
has taken on the worst aspects of corporate America (and Canada). You can
see this in the way they push now for endowment money, the highly paid
senior management contrasted with poorly paid adjuncts, and how research is
controlled these days. Blue skies research is cut, while most research is
geared towards short-term corporate profit, from which they will no doubt
milk society with.
I tremble when I think about what all of this means:
1. Students won't be getting a good education when they are taught by
adjuncts being paid poverty wages.
2. Corporations will profit in the short run.
3. The wealthy and corporations due to endowment money have a huge sway.
4. Blue skies research will fall and over time, US leadership in hard
sciences.
5. The productivity of future workers will be suppressed and with it, their
earning potential.
6. Related to that, inequality will increase dramatically as universities
worsen the situation.
7. There will be many "left behind" students and graduates with high debt,
along with bleak job prospects.
8. State governments, starving for tax money will make further cuts,
worsening these trends.
9. Anything hostile to the corporate state (as the article notes) will be
suppressed.
10. With it, academic freedom and ultimately democracy will be much reduced.
What it means is decline in US technological power, productivity gains,
and with it, declining living standards.
All of these trends already are happening. They will worsen.
I'd agree that a more readable version of this should be made for the
general public.
But your description suggests an inevitable bleak dystopic future – a
self-fulfilling prophesy. The future is not written – we can help
determine its course. It starts with grass roots movement building in
your neighborhood and community. And I can't think of a more rewarding
task then creating a better future for our children.
But perhaps my farmer's work ethic, my inclination to side with the
underdog and stand up to the bully capitalists, are notions that most
Americans no longer possess. Perhaps Cornel West is correct when he
states: "The oppressive effect of the prevailing market moralities leads
to a form of sleepwalking from womb to tomb, with the majority of
citizens content to focus on private careers and be distracted with
stimulating amusements. They have given up any real hope of shaping the
collective destiny of the nation. Sour cynicism, political apathy, and
cultural escapism become the pervasive options."
However, it is my observation that Trump's election has woken this
sleepwalking giant, and that his bizarre behavior continues to energize
people to resist. So why not rebel and help bring down the neoliberal
fascists. Is there any cause more worthy? And for those who won't try
because they don't think they can win, consider the words of Chris
Hedges: "I do not fight fascists because I will win. I fight fascists
because they are fascists."
I'm going to complain about your headline. A lot of stuff on this blog is
obviously relevant only to the USA, and when it's obvious it doesn't need to
be mentioned in the headline. But it's not at all obvious that this topic is
only about the USA (or North America, since the author is in Canada?), so
maybe you could edit the headline to reflect that it is in fact only about
the USA?
My observation of Australian universities is that they have similar
problems, although maybe to a lesser extent. But I doubt the same things
happen in all countries. I'd be interested to know more about mainland
European universities, and ex-Soviet-bloc universities, and Chinese
universities, and Third World universities.
As for "Universities with large endowments are increasingly hedge funds
with an educational unit attached", I think the rich universities in the UK
(i.e. the richer residential Oxbridge colleges, if you count them as
universities – Oxford and Cambridge Universities themselves are not
particularly rich – plus maybe Imperial College?) have very little invested
in hedge funds and a lot in property. Can anyone confirm or deny that?
In the past two decades, the UK's top universities, often called the
Russell Group after the Russell Hotel in Russell Square where they met to
form a sort of lobby group, have made money and started hiring rock star
academics. I don't know how much these academics teach, but they often
pontificate in the media.
Big business, oligarchs and former alumni (often oligarchs) donate
money, allowing them to build up their coffers. Imperial is developing an
area of west London.
Oxbridge colleges own a lot of property. Much of the land between
Cambridge and London is owned by Cambridge colleges. This goes back to
when they were religious institutions and despite Henry VIII's
dissolution of the monasteries.
London Business School has expanded from its Regent's Park base to
Marylebone as the number of students, especially from Asia, grow. I have
spoken to students from there and Oxford's Said Business School and know
people who have guest lectured there. They were not impressed. Plutonium
Kun has written about that below.
Oxford and Cambridge are British state universities as I understand
it. The Russell Group consists primarily of state institutions that
have assumed / been given / been restored to an elite role in the
British system of higher education, which is overwhelmingly public.
Oxford and Cambridge are at the peak of a relatively flat hierarchy of
elite public higher education. Higher ed's role in the constitution of
British elites is characterized by 3 features: association with an
institutional reputation and thereby access to a network, a financial
hurdle, and a meritocratic process of selection. Of these the
financial hurdle is the least problematic – tuition is still peanuts
compared to that at American elite institutions.
Things have gotten better – you no longer have to be a male member
of the church of England to get in – and the system is more democratic
than the French system of elite public higher ed, i.e. the ruling
elite in the UK can be penetrated by working people, e.g. Corbyn.
My son is half Japanese and half American and holds a passport with both
countries, he is still in elementary school, but my wife and I are
encouraging him to go to school in Japan or to Germany (ancestral home) and
seek his fortunes outside of the US as the crapification of the US roller
coasters out of control.
Japanese universities are still affordable compared to the US and it's
administrative layer, modestly paid, isn't run by MBAs, corporate hacks and
neoliberal apologists and others who would better serve the public by
decorating a lamp post somewhere with piano wire tightly wrapped around
their necks!
My niece attended Kyoto University, one of the best schools in Japan and
it cost her and her parents about 7500.00 a year. She commuted from Nara
City and Finished her degree in just under three years and had a job waiting
for her in the middle of her third year.
Now, I agree that Japanese universities have their fare share of problems
and insanity, but the thought of dealing with US universities nauseates my
wife and me.
The only school in the US that I would want my son to attend would be
Caltech, if he could ever successfully get accepted. They still do great
science there, much of it blue sky research. LIGO is still running!
https://eands.caltech.edu/random-walk-3/
An increasing number of British students are going to the Netherlands
and, to a lesser extent, Germany for courses taught in English and for
under EUR2000 per annum. Leiden and Maastricht are particularly favoured.
Apparently, some Spanish universities are cottoning on to that market.
Half a dozen years ago, a clown masquerading as a BBC breakfast news
reporter went to have a look and condescend. Her concluding remark was,
"The question is are continental universities as good as British ones."
The university system is not set up for education. it's a reward to
the conformists who studied 12 hours a day all through jr
high/highschool to pass the university entrance exams (which
notoriously don't test for any useful knowledge). The idea being that
if you waste your whole childhood studying for a phoney test, you
won't dare question the system once you're in the workforce, as it
would mean admitting your whole childhood was wasted!
Since college is viewed as a reward, rather than a challenge,
there's very little learning going on. it's about developing
relationships (and drinking problems) with future members of this
elite class.
So most Japanese corporations wind up having to teach the grads
everything on the job anyway.
A Japanese degree doesn't mean 'i know things' it means 'i have
already by age 20 sacrificed so much that i don't dare ever rock the
boat', which is exactly how the corporations and govt bureaucracies
want it.
You might say "oh but science! Japanese are good at that!"
But my wife, a nurse, says that it's considered rude to flunk an
incompetent student, providing she/he's respectful of the professor.
There are doctors who routinely botch surgeries, but firing them would
be rude. These doctors would have flunked out of regular (i.e.
non-Japanese) universities.
Having on more than one occasion suffered through management
restructuring organised by MBA's which did nothing other than reduce
productivity in favour of meaningless metrics and increase the power of
managers who had no idea how to actually do the job, I'm increasingly coming
to the conclusion that the MBA was a clever invention by an anarchist
determined to create a virus to undermine capitalism from within. At least,
thats the only possible theory that makes sense to me.
I agree . Putting it more bluntly the MBA is a clever con to get
would-be students to sign up in the belief it'll teach them something
that can't be taught – how to make money. I've said this on this blog
before – the ability to make money is a knack ; it doesn't matter what
the field is it's all akin to someone selling cheap goods on a market
stall .
Many UK universities are targeting foreign, especially Asian, students
for the purpose of profit, not education. Some universities refer to
students as clients.
Some provincial universities are opening campuses in London as foreign
students only want to study in London.
There are many Chinese would be students in London this week. Some
universities have open days at the moment. When the youngsters and their
parents are not attending such days, they go shopping at Bicester Village,
just north of Oxford. It's odd to see commuters arriving from
Buckinghamshire at Marylebone for work and Chinese and Arab tourists going
shopping in the opposite direction, and the reverse in the evening.
The targeting of rich Asian students, often not up to academic standard,
has led to a secondary school in mid-Buckinghamshire, where selective
education prevails at secondary / high school, to take Chinese students for
the summer term and house them with well to do (only) local parents. The
experiment went well for the "grammar" school, i.e. it made money. As for
the families who housed the kids, not so much. There were complaints that
the children could speak little or no English, which is not what they
expected, so the host families could barely interact with the visitors. The
school wants to repeat the programme and expand it to a full year. That is
the thin end of a wedge as the school will scale back the numbers of local
children admitted and probably expand the programme to the entire phase of
secondary / high school. It's like running a boarding school by stealth. The
school is now an "academy", so no longer under government control and
similar to charter schools, and can do what it wants.
Yves Smith,
I like your introduction to the article. "Universities with large endowments
are increasingly hedge funds with an educational unit attached" A recent and
very simple but eye opener interview on the subject-Richard
Wolff-http://www.rdwolff.com/rttv_boom_bust_for_profit_schools_are_making_money_but_failing_the_grade
As Henry Heller mentions Bourdieu, I can not find among his bibliography
much on the specific increasing dominance of the "free market" over learning
institutions. The Field of Cultural Production focuses mainly on the
opposition market/art,cultural field and the rules of art. Some of his other
works elaborate very well on the transformed reproduction of social agents
with different economic and cultural capital weights. His major works on
higher learning are The State Nobility and Academic Discourse, which are
about the homologies between the hierarchy of higher learning centers and
the market position occupiers which the latter produce. All of it within the
French context. The great late Bourdieu certainly denounced the increasing
free market ideology presence and dominance on "everything human"(i.e Free
Exchange, Against the Tyranny of the Market and elsewhere); yet not much in
that regard-to my knowledge-on the centers with the granted power to issue
higher learning degrees. I guess my point is that Heller's reference to
Bourdieu strikes me as a bit odd here.
Nevertheless, I like Heller's article. Just as incidental evidence: my
town's community college President is a CPA and MBA title holder, the
Economics 101 class taught does not deviate the slightest from economic
orthodoxy doctrine and I must add that, despite-or because of- a 75%
tutoring fee increase in the last eight years, the center has consistently
generated a surplus aided by the low wages from the vastly non-tenured
teachers.
The students from China, Singapore and the Middle East often live in the
upscale areas of London, often at home rather than rent. Parents are often
in tow. They also drive big and expensive cars.
It's amazing to see what is driven and by whom around University,
Imperial and King's colleges and the London School of Economics in central
London. This was remarked upon by US readers a couple of years ago. Parking
is not cheap, either.
A friend and former colleague was planning to rent at Canary Wharf where
he was a contractor. He put his name down and was getting ready to move in.
The landlord got in touch to say sorry, a family from Singapore was coming
and paying more. Apparently, Singaporeans reserve well in advance, even
before the students know their exam results.
A golf course was put up for sale near home. The local authority tipped
off some upscale estate agents / realtors from London. A Chinese buyer has
acquired the thirty odd acre property. Without planning (construction)
permission, the property is worth £1.5m. With planning permission, it's
worth £1m per acre. A gated community / rural retreat for the Chinese
student community is planned. Oxford, London, Shakespeare Country, Clooney
Country and Heathrow are an hour or less away.
My favorite line:
Marxism is still regarded with suspicion in the United States.
I love a good Marxist and I know that a totalizing perspective such as
Marxism requires a certain amount of generalization, but I found more to
criticize in this post than to recommend it. Apparently entire disciplines
have agency (
As if on cue, sociology, psychology, literature, political
science, and anthropology all took sides by explicitly rejecting Marxism and
putting forward viewpoints opposed to it. History itself stressed American
exceptionalism, justified U.S. expansionism, minimized class conflict, and
warned against revolution.
).
It is clearly true that the modern university is overly focused on
money-making – both the university enterprise itself and the selling of
higher ed to students – but, from my long experience with one big Tier One
and lesser knowledge of several others, it is wrong to say that the modern
university looks to operate as a business. Indeed, the top heaviness of
bureaucratic administration in the modern university is not very
business-like.
IMO what declining public funding has done is allow/force the modern
university to aim it's giant vacuum sucker in any and every direction. By
the way, if Wisconsin is any example, there are enough Chinese students
interested in American university degrees to keep it in business for quite a
long time.
But my biggest complaint is with the history. After first laying out an
ideal (but not very) historical vision of the utopian university, in
contrast with today's money grubber, he later admits that the mid-century
university was not all that open to leftism. Then the miracle of the 1960s,
which seems to spring from social protest alone. The real story of the 1960s
was the huge expansion of higher ed in the U.S., which led to considerable
faculty hiring, which allowed a lot of leftists to get hired in the 1960s
and early 1970s (often at second or third-tier schools) when they would not
have in the 1950s. This was always going to be a one-time event.
The author also seems to suggest that universities owe it to Marxists to
hire them if their analysis is good. This is a weird argument for a Marxist
to make, seemingly entirely oblivious to the overall political economy he
otherwise emphasizes. It ends up sounding more than a bit self-serving. I'm
not sure lecturing in History on the public dime is Marx's idea of praxis.
The U.S. Tax Code Actually Doesn't "Soak the Rich"
: In 2012,
Republican presidential candidate Mitt Romney famously commented that
47 percent of Americans were "dependent on government" because they
didn't pay any federal income taxes. He went on to explain that his
job was "not to worry about those people."
Journalists and other public figures often claim that only the rich
pay taxes, supporting this with the argument that the rich pay the
vast majority of federal income taxes. However, federal income taxes
are just one part of the broader tax code. When we consider other
types of federal taxes as well as state and local taxes, it becomes
clear that the overall tax code isn't extremely progressive – in other
words, it doesn't "soak the rich," and it certainly doesn't let the
poor off the hook. ...
"Journalists and other public figures often claim that only
the rich pay taxes, supporting this with the argument that
the rich pay the vast majority of federal income taxes.
However, federal income taxes are just one part of the
broader tax code. When we consider other types of federal
taxes as well as state and local taxes, it becomes clear that
the overall tax code isn't extremely progressive – in other
words, it doesn't "soak the rich," and it certainly doesn't
let the poor off the hook."
Great detail. Mankiw is
particularly bad in terms of citing only Federal taxes as if
state and local taxation did not exist. He used to have a
comment section where a few of us would remind him of the
above. I hear that is why he turned off his comment section.
And corporations pay no taxes. Well, PGL is only considering
federal corporate income taxes when making such a ridiculous
statement. Guess what, corporations pay other taxes too!
A point that should be well known by now, but worth repeating
because many remain unaware. Federal income taxes are but a
progressive subset of all taxes, the rest of which, in
aggregate, is actually quite regressive.
That FICA is regressive is pretty meaningless, given you can
do much more honest analysis by looking at the ROI. OASDI is
simply coerced retirement savings along with forced purchase
of various insurance.
But as we saw with ObamaCare,
progtards will take every opportunity to include in
legislation completely unrelated clauses that act as income
redistribution - see the 3% income tax. Then again, to some
morons (PGL, DrDonk and EMichael included) 100% of you income
is owned by the government and there is a certain percentage
that they leave you have. Looking at it from a "tax rate"
perspective is wrong-headed and backwards.
That is a great example ... of the borderline incoherent and
histrionic way conservatives often talk about policy issues
when they are trying to act intellectual.
I commented on Dean Baker's blog and on this CEPR article
too.
The gust is to get people to discuss public finance in
net worth terms and not just by income taxation type or just
by the transactional flows in a 12 month period.
The headline they chose fir this article would have been
more informative.
Just think, looking at the top 1percent, what is their
contribution to public finance compared to their net worth.
Compare this to the medium, or just about any other strata
and I think many might be better educated.
"... By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet ..."
"... Thin Reed? Authoritarian rule for the oligarchs ..."
"... Most manufacturing jobs are lost via automation, not outsourcing. ..."
Posted on
February 6, 2017
by
Yves Smith
Yves here. As reader John Z pointed out, the policy program described in this
post is very much in synch with the recommendations Lambert has been making.
One small point of divergence is that Leopold reinforces the idea that taxes
fund Federal spending. Taxes serve to create incentives, and since income
inequality is highly correlated with many bad social outcomes, including more
violence and shorter lifespans even for the rich, progressive taxation is key
to having a society function well. However, he does get right (as very few do)
that the purpose of a transaction tax is to discourage the activity being
taxed, rather than raise money (aside from the MMT issue, the tax would shrink
the level of transactions in question, making it not very productive in
apparent revenue terms).
By Les Leopold, the director of the
Labor Institute, who is currently working with unions and community
organizations to build the educational infrastructure for a new anti-Wall
Street movement. His new book Runaway Inequality: An Activist's Guide to
Economic Justice serves as a text for this campaign. All proceeds go to
support these educational efforts. Originally published at
Alternet
During the Bernie Sanders campaign I heard a high-level official
give a powerful speech blasting the Trans-Pacific Partnership Act for the harm
it would bring to workers, environmentalists and to all who cared about
protecting democracy.
Donald Trump now has signed an executive order pulling out of the
TPP negotiations.
Is this a victory or a defeat for the tens of thousands of
progressives who campaigned to kill the TPP?
On the same day Trump killed the TPP, he met with corporate
executives saying he would cut taxes and regulations to spur business
development. But
he
also warned
that "a company that wants to fire all of the people in the
United States and build some factories someplace else and think the product is
going to flow across the border, that is not going to happen." He said he
would use "a substantial border tax" to stop those practices.
Is this a victory or a defeat for workers and unions who for
three decades have been begging politicians to stop the outsourcing of decent
middle-class jobs?
Breaking the Spell of Neoliberalism
Our answers may be clouded by four decades of the neoliberal
catechism-tax cuts on the wealthy, Wall Street deregulation, privatization of
public services and "free" trade. Politicians, pundits and overpaid economists
long ago concluded that such policies will encourage a "better business
climate," which in turn will lead to all boats rising. Instead those very same
policies led to a massive financial crash, runaway inequality and a revolt
against neoliberalism which fueled both the Sanders and Trump insurgencies.
(See
enough
facts
to make you nauseous.)
This ideology is so pervasive that today no one is shocked or surprised to
see Democratic governors on TV ads trying to lure business to their states by
promising decades of tax holidays. No one gags when politicians lavish
enormous tax gifts on corporations-even hedge funds-in order to keep jobs
from
leaving
their states
.
Similarly, we have grown accustomed to the neoliberal notion that we should
go deeply into debt in order to gain access to higher education. Free higher
education, which was the norm in New York and California until the 1970s, was
"unrealistic" until Sanders rekindled the idea.
More troubling still, elites propagated the idea that public goods should
not be free and available to all via progressive taxation. Rather public goods
were denigrated and then offered up for privatization. Even civil rights icon
Representative John Lewis
used
the neoliberal framework
to attack Bernie Sanders' call for free higher
education and universal health care: "I think it's the wrong message to send
to any group. There's not anything free in America. We all have to pay for
something. Education is not free. Health care is not free. Food is not free.
Water is not free. I think it's very misleading to say to the American people,
we're going to give you something free."
Obama/Clinton Didn't, Trump did
Ironically, while Lewis is defending neoliberalism, Trump
actually is attacking two of its foundational elements-free trade and
unlimited capital mobility. Not only is Trump violating neoliberal theory, he
also is clashing with the most basic way Wall Street cannibalizes us. Without
the free movement of capital, assisted by trade deals, financial elites and
their corporate partners would not be able to slash labor costs, destroy
unions and siphon off wealth into their own pockets.
In particular, we should be extremely worried about how Trump is
approaching the loss of manufacturing jobs. The neoliberal fog should not
cause us to miss the obvious: presidents Obama and Clinton did absolutely
nothing to stop the hemorrhaging of middle-class manufacturing jobs to
low-wage countries. (U.S. manufacturing fell from 20.1 percent of all jobs in
1980 to only 8.8 percent by 2013.) Not only did Obama and Clinton fail to stop
even one factory from moving away, but they truly believed that capital
mobility and free trade were good for America and the world. In other words
they had sipped plenty of the neoliberal Kool-Aid.
Meanwhile, Trump is all in. He is saying that jobs in the U.S. are more
important than the long-run benefits of capital mobility and TPP/NAFTA
agreements. If he keeps bashing corporations for moving jobs abroad and if he
manages to ignite even a mini U.S. manufacturing jobs boom, Trump could be
with us for eight long years.
But What About the Poor in Other Countries?
To many progressives, saving American jobs sounds jingoistic and
"protectionism" is a bad word. Isn't global trade helping the poor become less
so around the world? Isn't it selfish only to protect American jobs? Isn't it
more moral to share scarce manufacturing jobs with the poor in Mexico and
Asia? After all, even if a plant closes in the Rust Belt, service sector jobs
can be found at wages that still are far higher than what the poor can hope
for in low-wage countries.
You can be sure corporations will be playing this tune if Trump tightens
the screws on capital mobility.
These arguments however have little to do with how the world actually
functions.
First, the big winners in the outsourcing game are the
corporations and their top Wall Street investors. (In fact Wall Street is
driving the process by endless pressure for
stock
buybacks
.) It's hard to make the case that the poor in Mexico have been
the beneficiaries of NAFTA.
Second, it is morally suspect to argue that someone else
should give up his or her standard of living so that the product made here
can be produced abroad by the same company and imported back into the U.S.
No worker can afford to donate his or her job to developing nations.
Third, outsourcing to low wage areas always involves
increasing health, safety and environmental hazards. In almost every case
production moves from more stringent standards to weaker standards. Plus,
the increased distances the products must travel mean there will be more
carbon emissions than if production remained here.
No, it's not possible to make a credible progressive case for outsourcing
your neighbor's job
What Do We Do?
The progressive instinct, and rightfully so, is to trash Trump.
If he's for it, we must be against it. When it comes to immigration, civil
rights, abortion, freedom of the press and many, many other issues, that's a
sound strategy.
But trashing Trump for saving jobs in the U.S. is suicidal.
In opposing Trump, we must not slip into defending neoliberalism. It's not
okay for corporations to pack up and leave. We should have some control over
our economic lives and not leave all the crucial decisions to Wall Street and
their corporate puppets. Trade deals are bad deals unless they enforce the
highest health, safety, environmental and labor standards. And those measures
must be enforceable by all the parties. The race to the bottom is real and
must stop.
In the U.S. We Should Be Mobilizing the Following Areas:
1. Organize the outsourced
: We should identify
and organize all those at risk from off-shoring. We need to make sure Trump
and Congress hear from these actual and potential victims. Trump needs to be
reminded each and every day that there are millions of jobs he must protect.
At the same time we should be rounding up support for the Sanders
bill
to stop off-shoring
.
2. Resist:
Trump has made it clear to corporate
America that in exchange for job creation in the U.S. he will cut their taxes
and regulations. We should demand that all tax "reforms" include a new
financial speculation tax (
Robin
Hood Tax
) on Wall Street to slow down their insatiable greed. Also, we
need to fight tooth and nail against any weakening of workplace health, safety
and environmental regulations. We have to destroy the Faustian bargain where
jobs are protected but the workers and the communities are poisoned.
3. Connect:
More than 3 million people protested
against Trump. But it is doubtful that dislocated workers and those facing
outsourcing were involved in these marches. That's because the progressive
movement has gotten too comfortable with issue silos that often exclude these
kinds of working-class issues. That has to change in a hurry. We need to reach
out to all workers in danger of off-shoring-blue and white collar alike.
4. Expand:
Many key issues-from having the
largest prison population in the world to having one the lowest life-spans-are
connected through
runaway
inequality
. Outsourcing is deeply connected to the driving force behind
runaway inequality-a rapacious Wall Street and its constant pressure for
higher returns. We need to broaden the outsourcing issue to include stock
buybacks and the other techniques used by Wall Street to strip-mine our jobs
and our communities. It's time for a broad-based common agenda that includes a
Robin Hood Tax on Wall Street, free higher education, Medicare for All, an end
to outsourcing, fair trade and a guaranteed job at a living wage for all those
willing and able.
5. Educate:
In order to build a sustained
progressive movement we will need to develop a systematic educational campaign
to counter neoliberal ideology. We need reading groups, study groups, formal
classes, conferences, articles and more to undermine this pernicious ideology.
Some of us are fortunate to be part of new train-the-trainer programs all over
the country. We need to expand them so that we can field thousands of
educators to carry this message.
Yes, all of this is very difficult, especially when it seems like
a madman is running the country. It is far easier to resist than to tear apart
neoliberalism. But we have to try. We need to recapture the job outsourcing
issue and rekindle the flames that ignited Occupy Wall Street and the Sanders
campaign.
Les Leopold explained some of his beliefs on the Smirking Chimp. I made a comment
to that article that I think should be repeated here ==>
At the moment, it's hopeless because we do not have a platform.
Most of the supposed liberals out there cannot defend welfare of any kind, cannot
defend Social Security and cannot defend most of what they supposedly stand for in
any kind of intelligent way.
There are circumstances where "welfare" is a moral necessity. There are also
circumstances where you tell the claimants to get a job. Sometimes you help them to
get that job.
It's necessary to be able to tell the difference and to be able to explain the
difference.
Too many supposed liberals do not understand how the labor movement became corrupt
enough that "right to work" looked good to people who were paying dues and getting
little back.
If you do not understand your own "liberal" beliefs, some uneducated red-state
buffoon will make you look like the bad guy
You not only need to understand your own beliefs, but you need to be able to
debate them with other wanna-be liberals until you have a platform that means
something.
Yep, everything Trump will do to bait Liberal "resistance," they will
eagerly fall for. It leaves a LOT of wiggle room for a movement to get between
DC's Kleptocrats and Trump's supposed constituency (victims? marks?) about to
lose their jobs, homes, equity, retirements & kids to imperialistic wars. If
there's a Left in this country, it simply HAS to be more than white kids on TV,
in black face masks we need to dodge Trump's trolling and fight unremittingly
FOR living wages, job safety, healthcare, upwards mobility & AGAINST a
predatory FIRE sector, ALEC kleptocracy & their media's 24/7 reality
infomercial. For way too long, the whole good cop/ bad cop scam has been Yuppie
liberals vs Oligarch's running dogs, we've tried to live off any chunks that'd
trickle down through the maelstrom above our heads, to which we were not
invited
Quite. No reason Sanders' platform can't be used. There's also a 5-point
platform right in plain sight at the end of Leopold's article.
Some people seem to have this urge to outsource the platform to somebody else -
the Democrat Party, or maybe others. No. No need to go elsewhere. There's two
platforms right here. Use them.
The problem is that economic systems are complex, emergent phenomena. They
influenced by culture, chance, ideas, tribal instincts, technology (including
financial technology), geography, tradition, the environment, human nature,
migration, religion, and on and on.
This notion that something as complex as human society can be analyzed under an
intellectual construct, whether neo-liberalism, socialism, or Rastafarianism
defies common sense. Centuries of intense theorizing by some very smart people
have led to an understanding of parts of social systems. But, for example,
economists disagree profoundly on basic aspects of macroeconomics.
Neo-liberalism is not even a well defined concept. I don't know of any
politician in the US who declare themselves "neo-liberal." Read the Wikipedia
article to see just how poorly this concept is defined.
Among some self-imagined progressives it's become a perjorative term to apply
to leaders who they disagree with. IMO, politicians do not govern according to
abstract concepts. The honest ones are simply trying to govern, in the context of
the society they live in. At times, historically unique situations arise, and
political leaders are stumped for solutions. At such a time, some kind of think
tank might propose their pet theory to be considered as a factor in making
decisions (the "neo-cons" had their chance in the build up to the Iraq war).
I want Trumps ability to wreak havoc on the economy and civil infrastructure
minimized, and him gone as President as soon as possible. This is not going to be
easy. If, at the same time, think you can throw in the reform of global economic
structures, and succeed, you're delusional.
FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton are
influenced by neo-liberal ideas, it is at the level of ideas. People can change
their mind, or have it changed, on things like this. Quickly. In contrast to
something like pro-Zionist policies, to which a polician might have a deeper
attachment, very resistant to change.
The first two paragraphs are making a broad sort of argument, which if taken
with its full force seems to mean that any attempt to use theoretical
generalizations to understand the world is oversimplifying and therefore
questionable.
The third and fourth paragraphs take issue more specifically with the term
"neoliberalism."
However, the fifth paragraph seems to imply that anti-neoliberalism involves
"reform of global economic structures," and therefore maybe isn't as poorly
defined as the previous paragraphs would have led one to assume.
Meanwhile, the sixth paragraph undercuts the fifth. The fifth implies that
opposing Trump is so important that we should temporarily abandon any attempt
to move the discourse on the overall economic direction of the country or the
world. The reason given is that moving said discourse is supposed to be a
herculean, nearly impossible task. The sixth paragraph, instead, suggests that
Schumer and HRC can have their mind changed "quickly" on these sorts of issues,
and so maybe the overall project isn't so infeasible after all.
"FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton
are influenced by neo-liberal ideas, it is at the level of ideas."
I'm skeptical about this. Chuck Schumer and Hillary Clinton are influenced
by neo-liberal ideas at the level of massive donations to their campaign
committees or family foundation.
If you just get Trump gone, another Trump or worse will be produced in a
decade or so (never mind Pence in the meantime, that we could endure, I'm
focusing longer term). An awful system, that makes everyone poor (mass
impoverishment), stupid, and exhausted, produces awful results in terms of
governance (money in politics does not help of course).
I always took neo-liberalism to mean world domination by banks FIRE sector
and neoconservatism by the military and their suppliers and also oil which
greases the military wheels. Farms fall into the latter I guess for the defense
of the "landed gentry". Watched the farm reports lately and they are quite
upset by the non-passage of the TPP which would have given them higher price
supports. All of it is ruled by multi-nationals' money and clout so there is
overlap.
Don't equate the giant corporate agri-biz sector – Monsanto, ADM, IBP, et
al – with small family farms. Factory farms might be for TPP. The small
family farm, the independent farmer, not so much.
adding: Wall St speculates in grain and farm/food commodities. Wall St
isn't happy with the demise of TTP. This from a few years back, but still
relevant.
" Futures markets traditionally included two kinds of players. On one
side were the farmers, the millers, and the warehousemen, market players
who have a real, physical stake in wheat .
"On the other side is the speculator. The speculator neither produces
nor consumes corn or soy or wheat, and wouldn't have a place to put the
20 tons of cereal he might buy at any given moment if ever it were
delivered. Speculators make money through traditional market behavior,
the arbitrage of buying low and selling high. And the physical
stakeholders in grain futures have as a general rule welcomed traditional
speculators to their market, for their endless stream of buy and sell
orders gives the market its liquidity and provides bona fide hedgers a
way to manage risk by allowing them to sell and buy just as they pleased.
"But Goldman's index perverted the symmetry of this system. The
structure of the GSCI paid no heed to the centuries-old buy-sell/sell-buy
patterns. This newfangled derivative product was "long only," which meant
the product was constructed to buy commodities, and only buy. At the
bottom of this "long-only" strategy lay an intent to transform an
investment in commodities (previously the purview of specialists) into
something that looked a great deal like an investment in a stock - the
kind of asset class wherein anyone could park their money and let it
accrue for decades (along the lines of General Electric or Apple). Once
the commodity market had been made to look more like the stock market,
bankers could expect new influxes of ready cash. But the long-only
strategy possessed a flaw, at least for those of us who eat. The GSCI did
not include a mechanism to sell or "short" a commodity. "
More neoliberalism in action. It doesn't benefit either the small
farmer or the person buying groceries.
I agree many people here get caught up in labels. I think there is value in
iconoclasm, but ultimately we have to take practical actions if we want to
avoid trouble. Or, at least, avoid the worst trouble.
Many who comment do not seem to take seriously the danger of right wing
fanaticism. I am not sure what would convince them.
You might be right. I certainly don't take right wing fanaticism
seriously. Moreover I don't think it should be taken seriously, and unless
things seriously changed recently, I live in a state that, statistically,
has a lot of right wing fanatics.
They're not organized, they don't have a message that truly appeals, they
don't have messengers with mass appeal, there's nothing there anyone can
build on. Moreover, anti-immigrant sentiment comes and goes. In the 1840's
we were having riots and people were beating Irishmen in the street because
the economy sucked. But when things don't suck so bad economically, that
evaporates like the morning fog.
Until right wing fanaticism can look like anything other than some angry
guy with too many tattoos shouting angry slogans, or some weird dude who
wants to actually create White America that srsly nobody listens to, y'know,
until there's some unifying figurehead who can take it further and make it
sensible-sounding and mainstream to the folks at home who work a 9-to-5,
it's not even worth worrying about. I'm more worried about left wing
extremists who show up in huge mobs and cause property damage, personally.
By that I mean, they want neoliberal econoimcs with a socially left wing
platform. No wonder they hate the left and supported Clinton so much. They want
the status quo. Many are safely in the upper middle class, as the comments on the
Women's March in Washington DC have revealed. They will never have to deal with
the consequences of neoliberalism.
The Sanders base by contrast wants left wing economics and socially.
The neoliberals don't even want left wing social identity progress. They
just use it as a tool to capture voters. Team Blue types did jack to advance
social issues until they were forced too or were simply bypassed. Obama's
"personal endorsement" of gay marriage was covered by his support of state
rights.
Is anyone all that safely in the middle class these days? Even if they have
a nice middle class job, so much that they don't have to worry about age
discrimination as they get older? I don't think so. So much that even if they
have a nice plum insurance plan at work, they never have to worry about
healthcare for themselves or their loved ones? I'm not so sure
But sure it's not as immediate a threat, doesn't have the immediacy of say
facing immediate eviction for the lack of a rent payment or something.
What appeals to me most is the recognition here (item 3.) of the same concern for
visa holders being locked out of entering the country needing to be shown to the
laboring class already in the country.
For those laborers, seeing a few hundred (or goodness gracious, a few thousand)
people protesting another production line being shipped off is better "messaging"
than anything our ruling class will ever manage to conceive.
Seriously, I can think of no better image than social justice warriors standing up
for workers desperate enough to vote Trump (or resigned enough to not vote at all).
There are potential friendships – or allyships if you prefer – to be created that
could do wonders for much beyond economic concerns.
This has been my position from the early days of the Tea Party movement when I
couldn't understand why the Democratic Party immediately sent organizers to help
them with both organization and more importantly consciousness-raising.
My problem is that I'm in a Red state. Democrats don't win elections here. I need
a political organization that can give me the best possible republican. This would
look like America first economics to protect American jobs (there is a huge appetite
for this among the Republican voters I talk to.) It would mean accepting conservative
social positions. The democratic party might be able to this but it would require one
hell of a make over.
It would, but it might be doable. A lot of the divide in American politics is
around "the culture wars." I think people can adopt new ideas, and ways of looking
at things, if they get that "tribal sanction."
This is just arm chair theorizing, but one of the big hang ups is that cultural
difference is interwoven with historical precedents that operated at a more
substantive, fundamental level in the society. For example, the theories of white
supremacy were used to justify the appalling institution of slavery in the US. At
that time, this enabled the dominant culture to benefit at the expense of the
exploited.
But when cultural conditions change, such that economic systems like slavery
are no longer operative, the ideas of white supremacy can live on as simply
cultural identity.
For all the problems of our society, we have made progress, and the overt,
legal racism that existed just 50 years ago has been minimized. So perhaps people
interested in social justice can relax the hyper-vigilant, hyper-accusatory
attitudes of political correctness, to make common cause with populations they
have common interests with.
When social justice activists use the label of "racist" as a badge of shame on
someone who transgresses whatever social line, it tends to cause hurt feelings.
And accusations of reverse racism. Sigh. It could be different.
The Kulture Wars were specifically designed to put economic and Class issues
on the back burner, Divide and Rule. What is the point of Lady Gaga waving her
pussy in our faces at the super bowl, but to drive the socially conservative
working class into the Republican party. Frankly the issue of who sleeps with
who, who marries who and who has a baby, is done , covered by the assertion of
privacy protection by the constitution. In any case, economic justice should
take precedence. Time to move on from socially divisive issues.
Love your line about Lady Gaga. It is as if the powers that be understand
completely the "backfire effect" and deploy it consciously to their
advantage.
I completely disagree. While party organizations in red states may have little
impact on those elected from their state, a hostile takeover of a state party can
have real impact in terms of control of the national organization.
Democratic Parties in red states especially are interested in keeping their
invitations to Inaugural balls and holding Jefferson-Jackson (one would think
these would have been renamed by now given how totes woke Team Blue types are,
sarc) dinners. Who knows what could happen if they cared about results?
I disagree. "Good Democrats" can win. People respect people who fight for their
values or seem to fight for those values more than say a Hillary. The messaging of
Hillary as a defender for women and children wasn't an accident.
The problem for the "deplorables" in regards to Team Blue is the neo liberals
treat their concerns with contempt and have a recent history of betrayal.
It might take a while, but Virginia's fifth congressional district is the
largest district by area east of the Mississippi. It's bigger than New Jersey and
a relatively good Democrat (probably not the most pro choice person) won in 2008
against a Republican who won by huge numbers every years. That win didn't start in
early 2008. It started in 2001 with a couple of sacrificial lambs to build
operations to register voters, making sure the blue precpincts were registered and
to go into the precincts that should be blue believed they can win.
I believe people will make good choices when presented with options, but
putting up a non entity with cash who bemoans partisanship especially those "tax
and spend liberals" is why Democrats fail. How did Alan Grayson get into Congress
despite running in a district that went for Bush/Cheney twice while an adjacent
district that went for Gore and Kerry keeps sending Republicans to Congress? The
answer is people respect when they aren't being pondered too, and that is all
Clinton Inc knows how to do.
Entirely home grown for all intents and purposes. Lynchburg produced a
fair amount of volunteers and money despite not being in the actual
district.
Dean's 50th the strategy didn't come from no where. The Internet existed
before Facebook, and people have long memories of Democrats that did
organization before 1994 (gee, I wonder who was in charge of Team Blue) and
the destruction of the then permanent Democratic majority. People discussed
this all over. Admittedly, I didn't entirely buy it until Kaine thumped a
well liked Republican in 2005 running up the vote tally in areas where
people had been organizing.
There is a reason why Clinton Inc is despised by otherwise seemingly,
sensible Democratic types. The Clintons under perform because they run
childish goldilocks campaigns. In 1992, Bill mustered 43% of the vote
against 41 and a guy who basically wanted to bring back prohibition.
Thanks for bringIng up Dr. Dean's 50 state strategy. What the heck
happened to that? I'm convinced that the strategy was a good part of
Obama's victory in 2008. In Kansas, the Dems took a seat from the
Republicans that year, and won Indiana and North Carolina. Lost Missouri
by only 4000 votes. We could compete in these states and others (Arizona,
Texas, Georgia) if the state Democratic parties would arouse themselves
and do a bit of listening to people in their state.
Not sure study groups are the answer. Couldn't hurt, I suppose.
The article makes it sound like there was nothing but a clash of ideas for 40
years.
Out of the 70's there was a lot of racism and resentment at the stagflation that
got channeled into Reagan. The right wing think tanks started an Amen chorus,
abortion wars reached a fever pitch, and Dems started scrambling to try to win
elections that they used to win on a FDR platform.
Then came the bubble of the 90s, and Wall Street Dems looked like geniuses.
A lot of people were drinking the Koolaid. Not just sold out Dem pols.
New day now. Lessons have been learned. Unfortunately, many people have learned
the wrong lessons, nodding to the siren call of fanatical nationalism and Trump.
I am not sure what plan the proprietors of this blog favor, but I hope it includes
the Dem party because that thin reed is the only thing between us and authoritarian
rule for the billionaires.
The Dems are the very embodiment of neoliberalism, representatives of oligarchs
and soft sellers of authoritarian rule. Far far on the wrong side of the thin
reed.
As the post mentioned – Largest imprisoned, in the world. Lowest life
expectancy, for highest expenditures.Allowing millions to be foreclosed upon while
further enriching the banksters who rigged the system. That's authoritarian in an
extreme and only a few oligarchs benefit. Neoliberalism/Liberalism is
authoritarian. Dems are the first to shoot down those who challenge them with so
much as polite rhetoric. Feckless as Sanders was he clarified that for anyone who
dare look-see, admit it to themselves.
If Dems were the only party in existence we would be where we are today, if not
far worse. Just the way they structure and operate their party is more than enough
to prove these points.
Love the post title but I would wear a t-shirt which say either of these
things:
Who said prefer? The thing with siding with the Democrats in opposing
Trump is that in four or eight years we're left with nothing but siding with
somebody else in opposing the Democrats. How about getting something done,
finally? Crazy dream: make the Democrats side with us in opposing Trump.
Naked Capitalism is both a reading and study group hey here's a thought, why
don't the dems try to include usians, we're not democrats we're americans, after
all, and we don't need them if they're going to continue to play the game as they
have been playing it, supporting authoritarianism and heaping favors on
billionaires. I don't see lessons having been learned, none of the hillary
marchers I know can have a cogent , fact based conversation, it's just omg trump,
marching is good, globalization o care what will the poor illegal immgrants do,
cheap labor is essential, self driving trucks blah blah blah bail out wall st
while fraudulent MERS documents are fabricated to steal peoples homes, remember
linda green, remember non dischargeable student loans? Have you noticed all those
tents under the bridges? The dems ruled for the 10% but it's a big country and a
numbers game. You need to get out more. If the dems wanted to win bernie was the
ticket. Instead they chose wall st and war then lost like they deserved to lose.
In a representative democracy they are supposed to represent us, we're not
supposed to represent the dems. They'll be included when they deserve to be, no
one owes them allegiance.
"And at this point in time (where we are now) that means organizing
through the Dems, through the Repubs, or some third party."
Sometimes I figure it may as well be the Repubs (but not of course with
their current platform, yea I know people think the Dems is an easier party
to take over, but due to LOTE voting I'm not so sure.
Maybe you can tell me which is better? Cory Booker voted to prevent
importation of Canadian drugs to lower the outrageous rx costs. Ted Cruz
voted to import drugs so that we are not held hostage to US companies
raising drug costs with impunity. Unless the dems are benefiting citizens
why should we support them. Bernie's bill would have passed except for 14
dem senators voted to keep drug costs high . Who should we vote for in the
next election?
I hope I am not posting too late. Please delete this if you think I am.
Booker is a phony. Cruz is a creep. Not much to cheer for in either
case.
I am not suggesting that you owe allegiance to any candidate or party.
I am suggesting that party politics is an avenue for organizing, and
Dem party and traditional coalition is the better avenue for action. Not
to do the same things, but to work for peace justice and tolerance.
Where to target work for change.
The Repubs are not what some people here imagine. And they will do
great harm.
"That thin reed is the only thing between us and authoritarian rule for the
billionaires."
No, that "thin reed" would have continued to obfuscate the existence of
authoritarian rule
for
the billionaires through cynical, insincere
manipulation of
idpol
wedge issues.
The regime change we are witnessing, here in the U.S., is the cutting out of a
layer of cynical, professional grifters between the kleptocrats and the people. In
other words authoritarian rule
for
the billionaires is morphing into
direct, in-your-face kleptocracy
by and for
the billionaires.
There was an important discussion earlier, here at NC, that I think is relevant to
our current situation, sparked by Kalecki's observation that:
"One of the important functions of fascism, as typified by the Nazi system, was
to remove capitalist objections to full employment."
It is understandable that American workers would find a genuine commitment to full
employment, after so many decades of neoliberal job outsourcing, exhilarating.
Yet, smashing unions and "othering" large segments of the population didn't end
well for the Germans in the mid-20th century, and there's no reason to believe it
would work out any better over here.
Maybe that was a significant aspect of the rise of Nazi rule, but it seems to
me a bit reductionist to see the Nazis through such a narrow lense.
Similarly, I think we should resist the temptation of seeing Trump exclusively
through the lenses of our anger at Bluedogs for getting us into this mess. I am
angry. And those soulless climbers are still running the show in Congress. I am
angry about that too.
But these are dangerous times. We need to organize. We need to win elections.
And we do not have ANY easy path that I can see.
In my view, we need to channel our energy into primary challenges in the Dem
party.
The US Democratic Party has more than a little in common with the British
Labour Party sadly.
I wouldn't pin your hopes on their resolve to stand up for the average
working voter in the face of big money interests.
Both parties have steadily rendered themselves irrelevant to their erstwhile
core voters through a toxic combination of venality, hubris, contempt,
obsessive virtue signalling/ political correctness, vacuous ideologies, a
reliance on endless empty rhetoric, populism, 'foreign misadventure' and much
more besides.
Their currency, in the eyes of swathes of once loyal voters, has been so
devalued under the leaderships of flag of convenience crypto-neoliberal
politicians like Blair, Brown, the Clintons and Obama that this is going to be
a Herculean task to row back from in order to recentre and reconnect with
betrayed, bruised voters.
Trump might be a crass out and out shameless, populist, self-serving
sociopathic assh#le, but unlike those mentioned above, in the eyes of many of
those disenfranchised who backed him, some most likely out of desperation, at
least he's currently less of a lying hypocrite and, more importantly, he hasn't
let them down badly yet.
"Both parties have steadily rendered themselves irrelevant to their
erstwhile core voters through a toxic combination of venality, hubris,
contempt, obsessive virtue signalling/ political correctness, vacuous
ideologies, a reliance on endless empty rhetoric, populism, 'foreign
misadventure' and much more besides."
This is not quite right "Trade deals are bad deals unless they enforce the highest
health, safety, environmental and labor standards."
Labor in the underdeveloped countries consider some of this to be the developed
countries' trick of preventing the people in the underdeveloped countries from
getting jobs. There is some truth to this idea. When we negotiate trade deals, we
must remember that in a fair negotiation neither side gets everything it wants, but
each side must get enough of what it wants to agree to the terms of the negotiation.
The trouble with past trade pacts is that only the corporations on both sides of
the deal were represented. In the future, labor and environment on both sides must be
represented in the negotiations.
not quite right, the stateless multinationals play both sides off each other.
Globalzation deals like TPP with ISDS clauses are designed to limit sovereignty.
We have free trade, you can go anywhere in the world and buy whatever you want to,
your "fair negotiation" is a canard and misdirection.
One may also refer to USA communities who will accept higher levels of
pollution caused by an EPA targeted local industry/plant that provides local jobs
where they are in short supply..
This is very similar to a foreign country accepting higher pollution in trade
for jobs for their citizens.
When someone is desperate to support their family, compromises are made, and
the USA has plenty of examples.
That's kind of representative of the basic problem: before the white working
class morphed into The Middle Class during Reagan's Miracle, they'd long since
abandoned hell with the lid off, for suburbia (the nation's economy was based
upon this; unions, political parties, finance all fed off of upward mobility,
basically away from the poor, polluted, neglected, heavily policed industrial
areas (bottom feeders like Trump's dad or DNC's slumlord super-delegates hardly
invented this). EZ Credit, Bail Bonds, Party Stores, doc-in-a-box, PayCheck
Loans sucked-up what the politicians' business associates left behind. As Trump
moves on from trolling liberal elites to fomenting race war, mass
incarceration, etc, as LBJ, Nixon, Reagan & Clinton did with urban renewal, the
war on drugs, welfare reform some of us will scrambling to figure out just how
we're not just another part of the problem?
A contemporary version of that Sinclair quote could be stated as such :
"When Neo-fascism comes to America, it will be wrapped in a Lady Gaga
p#ssy-gown and carrying a case of birth-control pills . while screaming
'White, Deplorable, F#cker' !!"
Offshore tax sheltered wealth in the trillions must be reigned in, but nobody in a
position of leadership is allowed to touch it, only to make token noises about it
like Sen. Warren does.
It appears that Leopold misses another issue that hits American workers, that
being the "insourcing" of foreign workers, either legally (H1-B's) or illegally to
the USA.
American workers are certainly aware that some jobs can be outsourced via
computer/phone networks to other countries, but are also aware that neo-libs have
been more than willing to also let jobs that require a physical presence in the USA
be wage arbitraged down via increasing the domestic labor supply via immigration.
I don't believe the old assertion that "an immigrant displacing an American worker
frees the American to find a better job" gathers much support from American
workers/voters, if it ever did.
Trump tapped into this, and the Democrats will ignore this issue at their peril..
Neither political party wants to enforce employer sanctions, via mandatory
E-Verify, as that would be frowned on by both party's paymasters.
"Trump actually is attacking two of its foundational elements-free trade and
unlimited capital mobility. Not only is Trump violating neoliberal theory, he also is
clashing with the most basic way Wall Street cannibalizes us. Without the free
movement of capital, assisted by trade deals, financial elites and their corporate
partners would not be able to slash labor costs, destroy unions and siphon off wealth
into their own pockets."
Given the ease with which Trump reverses himself, I wouldn't take these utterances
seriously.
At the same time we should be rounding up support for the Sanders bill to stop
off-shoring.
I couldn't find "Outsourcing Prevention Act" at Congress.gov. It is possible that
the bill hasn't been introduced yet? Or maybe it has another name? I found these
possibilities:
Good article but needs an addendum: don't side with
Democrats
in opposing
Trump. There's a case to be made that Trump himself is really an independent even
though he has by necessity stuffed his administration with some GOP trogs. Therefore
when Trump does something our side likes he should be praised even though it might
diminish the chances of the dearly sought Trumpexit. The US public at large
increasingly see themselves as independents rather than supporters of the duopoly and
the left–including and perhaps especially Sanders–should stop fooling themselves that
they will ever reform the Dems. In fact the thing that might do the most to reform
the Dems would be some vibrant third party competition that forces them to protect
their left flank.
But we have enough time to hope the Democratic Party who is completely
subservient to corporate interests will suddenly decide to forget about all the
money they are making and side with the workers, poor, and the environment?
Voting in all new people would take many years, not to mention the party
structure that cannot be changed by voting. The majority of registered
democrats support neo-liberal candidates. How do you propose this quick change
of the democratic party to support traditional leftist policy will take place?
Note to self: I will not be bamboozled into self-destructive political adventurism
by mindlessly opposing the perfectly legitimate President Trump when ever he happens
to do something so swell that helps pay the rent, buys food and keeps a roof over my
head. I will stop going to ALL of those protest marches that demands that rowhouse
Philadelphia give up their jobs in reparations for neo-colonial and hegemonic
neo-liberal bad stuff by sending them to Mexico and the Dominican Republic or even
Viet Nam or China. I understand that people in America are people too, and need their
jobs and do not have trust funds to live off of when they donate their employment
with no hope for a replacement job to prevent a downward spiral into poverty.
I get it, by not focusing on real pocket book issues and major social programs,
like the ones we used to get in the afterglow of post WWII economic expansion, we
just left the barn door open for all of the wronged white guys in coal mines, all
57,000 of them nationally, to come out in the full force of democracy in action under
our definition of democracy, the electoral college. By not recognizing that the iron
law of democracy, where the consent of the majority of people is the deciding
principle in American politics, and marching after a political loss instead of going
out in front of the coal mines and factories and laying down in front of the trucks
hauling jobs away, I am a dope. I promise to fete The President Trump in editorial
pages, blog sites, graffitti on walls and other public property when he creates jobs
as a result, direct or indirect, of his policies. After all, it is axiomatic that if
Trump repeatedly fails to do anything of value for our nation, most of us will
suffer. If he puts forth an infrastructure financial package with the Japanese and
their global investment bank, I will hail as a partnership in progress.
After all, if we can fix up the country's faltering highways and bridges and air
ports and sea ports, we will modernized America, give people good paying jobs. And
that is a good thing. I am all for it. President Trump is supposed to be all for it.
So, when the jobs start pouring in with all of the concrete and rebar, I will not
protest. I will publicly applaud him. I will however be organizing behind the scenes
to crush him like a bug in the next election. I foresee a bidding war in jobs offered
to the forgotten and not so forgotten and I expect to come out on top as the highest
bidder.
Les Leopold is a smart guy and always has interesting things to say. But in this
case, I think he glosses over the biggest issue: people will not organize into unions
if they believe that doing so, or trying to do so, risks making their personal
employment situation worse, not better.
Anti-union activity by employers is now so routine and expected, and protections
for workers trying to organize, either from unions or government, are so weak that
the vast majority of working people have come to view trying to organize as insane.
(Yes, card check will help in a few situations but is not a game changer.) The
purported low unemployment rate does nothing to empower working people because
(except for the occasional exception that proves the rule) it is still overwhelming
the case that one's current job is better than any likely other job one would have to
get if one lost it. And irritating your boss is still the likeliest way to get fired,
or get your department outsourced, or get your entire workplace shut down.
And the fact that some public sector workers still have workplaces that make them
less likely to get fired or replaced for trying to exercise workplace "rights" just
points out how poor things are for most private sector workers, resulting in even
less sympathy for those workers.
What Trump gets is that, in this environment, most working people will support the
(anti-tax, anti-regulation) platform their boss supports, rather than the
(higher-tax, stronger-regulation) one their boss hates, if the (strong union)
platform that is good for them that their boss really, really hates is off the table.
Platforms and study groups are well and good but we need much more. As said above,
we need a new labor movement, in particular one that can organize in the private
export-sensitive sector. There is no such thing as a(n even moderately) successful
labor movement without strong unions in the private export-sensitive sector. But
there is no way to organize workers in this sector without being able to demonstrate
why being in a union is likely to materially improve their well-being. But one can't
get such a thing without strong government support to ensure trying to organize
doesn't in fact risk resulting in losing your job. Chicken-And-Egg problem.
Employers have so much power over workers now: right-to -work laws, tax
incentives, H1B and undocumented workers, Chamber of Commerce and lobbyists.
Probably the only way to have any clout would be to have a National Strike and
boycotts which would be tough to organize. I know that employers in an area will
collude with other companies to set and limit wages and benefits. I had a friend
that I worked with in a factory back in the 70s who was promoted to the office in
a secretarial position who told me about meetings our company had with other ones
in the community where they discussed and made agreements on labor issues. This
was back in the 70s. They were always threatening us about unions and I never had
heard anyone talk about joining one or any kind of union activity.
As regards the standard of living in third-world countries, it should by now be
apparent that the model of 'development' that uses low wages to attract foreign
businesses simply can not – and does not – increase general prosperity. How can it?
The model is that low wages ('affordable labor costs') are the engine, therefore the
wages need to stay low to keep the multinationals in place.
Look at the effects of NAFTA: the United States lost a lot of jobs, Mexico gained
jobs, but Mexican wages remain low. The NAFTA model is pulling the United States down
and not pulling Mexico up. That is now well established. Nobody need feel any guilt
about opposing trade agreements like NAFTA.
Ah, but what about China? Well China is a little different from Mexico – they are
more mercantilist. In the long run the established method of creating prosperity is
to have a stable or slowly growing population, and slowly but steadily build up
endogenous industries and a strong internal market. "Race to the bottom" trade
agreements yield exactly what the term suggests.
Where do I sign up? I'm ready to go. However, I think one aspect of this
transformational mission is missing: MONEY.
The RW has metric tons of billionaires who use their money to propagate their
ideologies and build "think tanks" and other institutions to provide the veneer of
respectability. I believe it's one of the primary reasons that they've been so
successful in pushing their extreme ideas on everybody. They have an ALEC branch in
every statehouse writing laws, which I'm sure they don't do for free. They can
gerrymander, buy off, and otherwise distort the entire process for little more than
walking around money for them.
I know Sanders nearly won with small donors, so perhaps that could be replicated
in this scenario, but long term, I think having some serious money to back up these
initiatives is going to make the job actually doable. And there are a few actual
billionaires who might be amenable to using their wealth for the greater good. Nick
Hanauer comes to mind.
The Antigonish Movement blended adult education, co-operatives, microfinance
and rural community development to help small, resource-based communities around
Canada's Maritimes improve their economic and social circumstances. A group of
priests and educators, including Father Jimmy Tompkins, Father Moses Coady, Rev.
Hugh MacPherson and A.B. MacDonald led this movement from a base at the Extension
Department at St. Francis Xavier University (St. F.X.) in Antigonish, Nova Scotia.
The credit union systems of Nova Scotia, New Brunswick and PEI owe their
origins to the Antigonish Movement, which also had an important influence on other
provincial systems across Canada. The Coady International Institute at St. F.X.
has been instrumental in developing credit unions and in asset-based community
development initiatives in developing countries ever since.
It is noteworthy that the movement began with Adult Education: if people do not
understand what has brought them debt and poverty, it will be difficult to counteract
them.
I'm sure that in the US during the Depression, there were many such movements
which helped people understand and defeat the Depression.
Looking back at what succeeded in the past can help towards a better future. Of
course, it will have to be adapted for the present problems, but starting with
education is a really positive move.
How about online adult education drawing on the talents of charismatic teachers
and more local face-to-face seminars to provide the core activists we need.
Good article which made some good points.
"The progressive instinct, and rightfully so, is to trash Trump. If he's for it, we
must be against it."
One instance of this is the huge play the immigration fight is getting. I don't agree
with how Trump enacted his immigration "reform" but I agree that immigration needs to
be curtailed. Significantly curtailed. H1B visas pretty much need to be done away
with, and if you are in this country illegally, you need to leave. And any further
immigration needs to be reduced. This outcry against immigration reform by the
liberals, what many in this country see as a huge problem, is not winning over any
hearts and minds in flyover country. It's like when Bill Clinton first got elected
and he wasted a lot of time and political capital on the gays i the military issue.
Only this time the Dems are not even in office. Still a waste of political capital.
In my mind this whole immigration reform paranoia is just another form of identity
politics by the Democrats. What progressives need to focus on is campaign finance
reform, jobs, health care reform, education, and increasing taxes on the wealthy and
corporations. Those issues resonate with everyone, Republicans and Democrats alike.
It is why Trump won. Don't fix these problems and immigration will be the least of
our worries as a nation. If things get worse in our economy, immigrants and refugees
are going to be in a much worse place than they are right now. People who are going
hungry and who are sick with no hope on the horizon have to blame someone. And
Americans are not known for the high level of intelligence and knowledge of how the
world really works. Anyone who looks "different" will be blamed and there will be
blood in the streets. I think we are almost to that point now.
"This outcry against immigration reform by the liberals, what many in this
country see as a huge problem, is not winning over any hearts and minds in flyover
country. It's like when Bill Clinton first got elected and he wasted a lot of time
and political capital on the gays i the military issue. Only this time the Dems
are not even in office. Still a waste of political capital. In my mind this whole
immigration reform paranoia is just another form of identity politics by the
Democrats."
The Dims maybe, but that's not why actual people protest, it's mostly because
they know illegals are those who serve their food when they order breakfast, are
on the train on the way to work, etc.. I know fly-over just doesn't get it,
because they don't live among and with illegals as part of their daily life, but
it's hard to see them driven out if one does.
All the points made in answer to that need to be memorized, because if you're to
the left of Andrew Carnegie or Ayn Rand that's what they'll throw at you. 'Americans
consume 99% of all fossil fuels and create 98% of all the trash and blah blah!' We're
a little sick of it.
"Americans consume 99% of all fossil fuels and create 98% of all the trash and
blah blah!' We're a little sick of it."
It's all true of course.
But yea they rely on left/liberals basic goodness (ok not all liberals have any
real goodness (or why don't they oppose the wars more?), most leftists are pretty
darn moral though) and they'll use it to enrich themselves, because they are not
good at all, but know how to get good people to be subserviant to their own
selfish ends.
Most manufacturing jobs are lost via automation, not outsourcing. What do we plan
to do about that?
The cheaper the capital (e.g., low interest rates), the easier it is to substitute
capital for labor. Whenever the Fed bails out a bubble via monetization, labor takes
another hit.
Solar's more cost-effective and adding more jobs now than the fossil fuel industry
– yet official policy now seems hell-bent on ginning up another oil reserve lending
bubble.
Wade is correct. I've posted a chart of the BLS statistics on long term
manufacturing employment in absolute and relative terms on this site.
Manufacturing employment's relative share of total employment has fallen in a
straight and steady diagonal line from upper right to lower left from its peak
in the 1950's to the present. Began long before off-shoring was a thing, and
off-shoring doesn't even clearly show as an independent variable. Otherwise
we'd see a significant bend in the curve. Instead, significant deviations are
conjunctural, connected to recessions.
The BLS charts can be easily researched by anybody on this site. I don't
want to hear conspiracy theories about how BLS has politically rigged the stats
for 60 years as lazy substitute for critical approaches to BLS statistical
methods. If you want to refute the evidence, that's what is required.
It fails to assess the real weight of off-shoring vs automation because
Smith doesn't base his analysis on the effects of automation, and then move to
assess the effects of off-shoring. Therefore Smith can never present a clear
quantification of the effects of off-shoring on employment in a metropolitan
country like the US.
At root Smith's limitations are found in his Andre G. Frank "development of
underdevelopment" bias. This cannot conceive of under- or uneven- development
in an "already developed" country like the US. But that is precisely, palpably,
what has happened. And it is inevitable under capitalist automation once it
reaches a tipping point. As I believe it has, where only some 25% of the total
available labor force is required to produce everything we (very wastefully)
consume now, today.
As an aside, note that off-shoring is not to include products never produced
in the US in the first place, like most of Apples' iProducts. You can't
"off-shore" jobs you never worked at, now can you! This represents a different
process, the export of *new* capital investment, in this case in a contract
relation with Chinese SEZ capitalists, not the transfer of *existing*
productive investment overseas. But Smith includes iProducts in his
"off-shoring" mix.
The Smith example shows this is a matter of the basic facts about
capitalism, not about left or right politics. That is exactly why people
gravitate towards off-shoring as a prime-mover in job loss, precisely because
something politically can be done about that. Yet if you somehow forced all US
corporations to 100% invest production in the US, you will only greatly
accelerate the trend of job loss due to automation, as it will be the only
lever they have left. Unless you want to halt all human progress in the
productivity that has already freed up 75% of our labor time to do something
other than maintain the current standard of living.
The real political problem we need to confront is that, despite these real
productivity gains, capitalism requires that the whole mob of proles be
continuously prodded onto the wage labor market, whether their labor is
necessary or not. That's the fundamental program of the Congressional snakepit
and its Statehouse auxiliaries. The wage labor social relation is the source of
the social power of capitalists, and without it they and their system go Poof.
A good reform proposal would be: a guaranteed *medium* income for all (or
alternatively, a guaranteed "job" for all at the same income or greater); a
system for equitably circulating the total potential labor pool in and out of
the pool of necessary labor. It will require a revolution to achieve such a
reform.
@Brad
"As an aside, note that off-shoring is not to include products never
produced in the US in the first place, like most of Apples' iProducts. You
can't "off-shore" jobs you never worked at, now can you! This represents a
different process, the export of *new* capital investment, in this case in a
contract relation with Chinese SEZ capitalists, not the transfer of
*existing* productive investment overseas. But Smith includes iProducts in
his "off-shoring" mix."
Doesn't seem like a different process to those needing work to survive.
This is why "economists" are being ridiculed and derided among large swathes
of the populace. Distinctions without differences which only serve to fit
data into precious formulae, based on preconceived ideals. If I develop a
new product in the US, and seek only China manufacture (to save myself the
labor cost, and evade the external costs of environment, etc.) the result is
the same. "New capital investment " is just a matter of timing. Lucky me, I
didn't have to go thru the expense of tearing down an existing facility, or
relationship, here first.
This seems to me one of the more incisive of the comments. So many are
coming at it from the framework of what solutions best get us back to a
situation that was better, like one we experienced between the 1950s to the
turn of the century. This was a unique period of advantage for the US
economically and industry-wise that is unlikely to be repeated, imo, and for
awhile seemed to have more easy opportunities for all.
The progressive platform recognizes how the pillars providing for more
equality of opportunity have been battered, and I agree with some of its
proposals. But just reversing the tax burden shifts and trying to reinstate
more affordable healthcare or education still leaves us with the situation
where the need for and nature of work may still be changing radically. I
have trouble seeing how a conservative half of the country with extremely
powerful propaganda outlets, interest groups, and fountains of money will
allow some if any of the ideas proposed in this article (hence Brad's claim
that it would require a revolution sways me a good deal).
I also do not think that Bernie, basically not subjected to any big
negative hits in the primary, would have won the general after the right's
smear machine was done with him. Even then, the republican congress would
have stopped cold any of his more significant proposals.
Progressives need to get realistic. This agenda will be slow in coming,
unless things get so horrible that a true revolution does occur. What that
would entail I do not know, but powerful forces are aligned against it. All
who spend time theorizing (including me) on keyboards will have to start and
sustain the very hard work of getting into the trenches, spreading and
fighting for ideas, and most of all, actually winning primaries and
elections and helping to get people out to vote. The right wing started
doing this methodically over 45 years ago, with patience and persistence.
Trump/RW domination needs to be stopped asap, by whatever plausible if
less than ideal tools we have. Protests are getting attention, and I hope
more participation and results will come next. Purity tests of progressive
ideals is a cancer that will only doom the cause. It will be hard and maybe
slow, but we're going to need more than just the faithful to get this turned
around. Bernie was a start, but too many are throwing up their hands just
because he lost the primary.
I plan to keep working to change the democratic party for the better, at
a pace that is realistic. Getting a more progressive tax structure again to
fund any of these ideas is critical first. I also can't see a guaranteed
income without a required work contribution to address the evolving economy,
given this country's attitude towards earning one's keep. A sort of advanced
CCC to work on massively fixing and improving our crumbling infrastructure
and public spaces, fighting forest fires, etc. using these tax funds is one
idea. Subsidizing quick as possible job training as new jobs evolve with the
radical changes in the economy is another. More support for local small
business and entrepreneurs (perhaps funding employees who they need for
awhile in startup phase as part of minimum guaranteed income in exchange for
work) until they prove to be an ongoing concern is another thought. Even if
these ideas are flawed, we need to rethink the paradigm of work with which
we grew up.
I don't agree. Obama could not only have done a Roosevelt 100 days, he
literally could have re-implemented many of his policies. This was a
window of opportunity that he ignored and bizarrely, the public at large
airbrushes out of its memory.
I don't at all buy that the US can't afford this. Did you forget we
spend ginormous amounts on our military, and that could instead be be
redirected to domestic uses? Japan, a less rich country generally
considered to be in decline, is vastly more egalitarian than America and
scores way above us and every other country in the world on social
indicators. Some of that, sadly, may prove out that ethnically mixed
societies don't "do" egalitarianism because some groups don't want to cut
less advantaged groups in.
The issue is that the elites (a word used only on sites like Alex
Jones before the crisis) are all in for increasing inequality. That means
not investing in education for the masses and much heavier policing,
since unequal societies are more violent, among other things.
I also do not think that Bernie, basically not subjected to any big
negative hits in the primary, would have won the general after the
right's smear machine was done with him.
Progressives need to get realistic.
Purity tests of progressive ideals is a cancer that will only doom
the cause. It will be hard and maybe slow, but we're going to need
more than just the faithful to get this turned around.
I have pulled these out of your comments, because they are generally
used by tribal Democrats to rationalize the party's incompetent,
destructive behavior. I am not saying that's why you're doing it. But I'd
like to address them.
I heartily concur with Yves' reply to you, to start.
Second, you mention in other places than the ones I quoted this idea
of doing what's "realistic" and being "realistic." What do you mean by
that? The neoliberal Democrats had a quarter of a century to demonstrate
that their way worked for the citizens of the United States and the
Democratic Party. They failed on both counts. More of strategy and policy
that has a proven record of failure would be unwise - do you agree?
If you do agree, and you want to reform the Democratic Party, as you
state above, then your choice is easy: focus your energies on getting rid
of all the entrenched neoliberals and corporate-aligned Democrats, both
party functionaries and elected officials. No positive change can occur
until that task is completed.
If you do NOT agree that the neoliberal New Democrats must be purged
from the party, what is your vision of realistic change, what makes it
realistic, and what makes it change?
Also, you are simply incorrect about Bernie and the general election.
All data we have demonstrates strongly that he would have won. There's no
smear machine in America better than the Clinton machine plus the major
corporate media aligned with it. He was smeared constantly with vile
falsehoods - one of which you clearly fell for, which is that he
wasn't
smeared. He would have held the Democratic states
unquestionably, and held the Rust Belt, and thus won the election. Tell
me what states you imagine he would have lost to Trump?
The realistic approach is get rid of the New Democrats utterly and
completely. They have failed catastrophically. That will be a hard task,
but that doesn't' make it unrealistic. To leave them in place and think
the party will win back governing power or do anything good for the
average citizen would be unrealistic.
Can anyone any longer deceive oneself about the primary meaning and purpose of the
Democratic Party? The DP, as it has been redefined and transformed since the
Nixon-McGovern election of 1972, is a political vehicle that primarily seeks to
represent the interests of mainly urban upper-middle suburban well-educated and
well-off professionals, managers, educators, and technologists, along with those
other racial/ethnic/social groups that happen to be privileged by elite opinion at
any given time.
If the quixotic Sanders run taught us anything, it is that there is no interest,
no room within the DP for critical economic and social argument. Not just radical
class-based neo-Marxist criticism but even the kind of economic issue-framing that
became a hallmark of the DP in the FDR regime and persisted with sometimes more,
other times less strength until the 70's.
The so-called "resistance" to Trump has only reaffirmed this conclusion. Insofar
as it is being led by DP and DP-leaning media and other talking-head
pseudo-intelligentsia, it has focused almost entirely on the same social lifestyle
and individual empowerment sexual/gender issues that have characterized it over the
past 40 years. This inability to think outside of what too often reduces in final
analysis to solipsistic "me-isms", for example by framing important political
questions like immigration, imperial reach, and deregulation in ways that transcend
the usual racial-ethnic-gender identity differences, prevents the DP and its
sycophants from suggesting deeper grounds for solidarity-in-opposition. Most readers
of NC understand what these deeper grounds are!
As I wrote another time a few years ago, DP players and pundits, often urban in
residence and outlook, and often themselves financially well off, ensconced in
high-priced city dwellings, shopping at Whole Foods, frequenting high-end fashion
boutiques, attending the best schools on mommy and daddy's dime, often appear more
transparently hostile and condescending to what they judge to be the unsophisticated
prejudices and religious backwardness of lower, working, and middle class Americans
than do the Trumps of the Republican Party. The latter, equally or even more
well-heeled than their ersatz opponents, have learned beginning in the Nixon-Colson
"silent majority" days, how to project a kind of "rural, small town folksiness",
filling their rallies with country music stars and NASCAR heroes, and who know enough
to drag out a "social-cultural conservative" every now and then to show that they
"hear and care" for the "forgotten American" even if they consistently ignore these
very people in the political arena.
To be sure, the Republicans don't give a rat's ass about these things. Applying
the categories of the silent-majority Americans, they are as "amoral" as the Democrat
special-interest spokespeople. However, when it is a case of neither party addressing
the causes that underlie the real deep-rooted rottenness that has become 21st Century
America, the blue collar "ordinary" American will often fall back on the party of
lip-service that at least to him or her seems to be listening to the anxieties and
resentments felt by them. The irony of course is that neoliberal policies
consistently applied will destroy (have destroyed) whatever was real and true about
the America they think has been left behind.
Great post. As an example of what you are talking about, I see very little
concern from Democrats and liberals about the current Republican efforts to pass a
national right to work law, even though this will hurt unions which are supposed
to be one of the core elements of the Democratic coalition. Is this surprising? Of
course not, given Obama's failure to fight for card check and to give support to
the embattled unions in Wisconsin during their fight with Scott Walker. What
happened to those comfortable shoes? Did Obama lose them? Unions give the
Democrats money and troops during election years and are then kicked to the curb
when the Democrats are in power or at most given scraps.
The upper-middle class professionals and managers who dominate the Democratic
Party want to continue the identity politics emphasis with regard to opposition to
Trump because they are making out well under neoliberalism and are opposed to
anything that would tilt the economy in a direction that is more favorable to
ordinary workers because they would lose their relative status. Upper-middle class
types don't want to go back to the days of the mid-20th century when doctors and
lawyers might have to share a neighborhood with factory workers.
To many progressives, saving American jobs sounds jingoistic and
"protectionism" is a bad word. Isn't global trade helping the poor become less so
around the world? Isn't it selfish only to protect American jobs? Isn't it more
moral to share scarce manufacturing jobs with the poor in Mexico and Asia? After
all, even if a plant closes in the Rust Belt, service sector jobs can be found at
wages that still are far higher than what the poor can hope for in low-wage
countries.
May I just say that as a deplorable member of the poor white working class who is
a bone-deep progressive that these are classist views of people who sit in their
comfortable middle-class bubbles and pretend there are n't people in
this
country who are suffering from the very things they are so nobly seeking to protect
workers in the third world from suffering?
If you want to know why otherwise sensible, intelligent people voted for Trump,
that paragraph right there is a major example. The content is bad enough, but that an
author who has written an excellent overview of the situation would automatically
attribute that kind of thinking to "progressives" shows just how insidious the
academic mindset is, and why the working class, regardless of race, gender, religion,
or sexual preference, automatically shuts out both categories when they stroll in to
"educate."
Any attempt to equalize wages in "poorer" countries, would also have to
address cost-of-living differences, as well.
You are not allowed, in "developed" nations, to live a subsistence lifestyle,
any longer.
With higher living standards, comes an obligation to provide citizens with a
level of income which can sustain that standard.
Thank you. Better-put than I could have done. Might I add to this that I wasn't
voting for the president of Uruguay or Mexico or whatever, who could reasonably be
expected to look out for those people. I was voting for the next president of the
United States, who I should be able to reasonably believe will look out for me, as
an American, first and foremost.
The recent primaries and Presidential election made clear to me how little the
concerns of ordinary people mean to the two national parties. However Trump was and
remains something of a wildcard - at least promising actions reflecting the concerns
of the hoi polli. He has indeed delivered in short order on several of his promises.
I have trouble characterizing the opposition and protests against Trump. Are they
inspired by the Democratic Party's knee-jerk opposition to anything Trump or
Neoliberal opponents to Trump's dismantling of the grand corporate take-over embodied
in the TPP or upper-middle "liberals" fuming about one or another of their pet issues
of the moment like immigration or climate change - issues which Trump seems
determined to throttle. My daughter was tempted to join the women's march because she
will sorely miss planned parenthood clinics when their funds are cutoff - they were
for her the only place she could find real healthCARE at any price.
At this point I tend to agree with Bernie Sanders assessment of Trump (ref.
today's links -
https://www.washingtonpost.com/news/powerpost/wp/2017/02/05/after-trump-moves-to-undo-financial-regulations-sanders-calls-him-a-fraud/
).
I am glad the US seems more cozy with Russia - worried about the US and China and
Iran - glad the TPP has been - at least temporarily - dismantled - in short I view
Trump as a very mixed blessing whose actions and intents remain opaque. I believe
Trump will benefit the obscenely wealthy classes but I'm not sure yet which portions
of the obscenely wealthy. I believe there is a power struggle ongoing between
different behemoth factions of the uber-rich but the waters they fight in are darkly
murky.
"upper-middle "liberals" fuming about one or another of their pet issues of the
moment like immigration or climate change "
Yeah, climate change an 'issue of the moment'.
Here is the bedrock of modern political stupdity. A total unconcern for the future
of all of us. I don't care where you think you are on the left/right BS, anyone with
your view is just another instance of the great problem.
I cannot read all the comments & know my own will be but a wisp in the wind. I am
grateful to naked capitalism, Yves & Lambert for publishing the best thinking on the
subjects.
"Workers of the World Unite" is about all I can see as the real option to pursue. How
to really do that means using all the means of the winners.
It's seems simply impossible on one hand to be nationalistic, and fair to labor
internationally at the same time.
I keep looking at WWI.
Workers of the World Unite? How? Fair Trade, Internationally the world is a struggle
between the Rich who have inherited wealth & get compound interest, pass on deeds
that survive as if a neofeudalism is just ordained.
Ah hell, I say if you cannot even imagine a utopia you ought not call yourself a
human being.
Purchasing Power Parity & World Government?
Without private property things get weird & corruption grows from elites getting
access to all.
In my Transcendia Insurodollar I overcome the flaw of Communist theory.
I have a part of it going. I have a gov. in govs. concept workable as permanently
small.
Time to expand. Doubtful, really really doubtful.
I do recognize Les is on the right track and has the correct goals. The puzzle is how
to really work at the Two Nation Solution of Workers & Power, corporate Power is
immense.
They throw out regulations we know are necessary.
Force & mind control propaganda are levers at their fingertips.
Force? 8 have so much wealth the majority divided by language & borders a challenge
is seen as doomed.
I shall imagine.
I found myself agreeing with most of the points in the post. We must be clear that
Donald Trump is anti-Globalist but to get GOP support and appointees he assimilated
their tribal beliefs. If he is stupid or crazy we must say so and explain why. If he
is right and does something that benefits American citizens such as ratcheting down
the Cold War 2.0 with Russia, we must applaud. I am fairly certain that to spite him
and keep the bribes flowing, Democrats will not support the re-branding of "Medicare
for All" to "TrumpCare".
It may be my history or old age; but, I am afraid that the global elite have
decided the USA is ripe for a final harvest and have gr
"... Start focusing on the predators at the top of the pyramid scheme and then watch how those same culprits and their networks "come to the rescue" in order to capitalize on the "pain and suffering" they help to create. I see a pattern, don't you? ..."
"... Don't forget student debt. Not only are many recent graduates underemployed or unemployed, they're in the hole tens of thousands. Further incentive not to make any sort of financial commitment. Student debt should be cancelled to promote earlier family formation. ..."
"... It's almost a negative feedback loop. ..."
"... Very true. Capitalism only works as long as enough people (or states) are able to take up ever-larger debt, to close the gap (called "profit") between expensive goods and comparatively cheap labour. ..."
"... Good to point out Gat Gourmet. Almost all outsourced jobs in the beginning of places where I have worked were once part of the company. ..."
"... Still, it's hard not to notice there could be nothing more convenient to the corporate and governmental powers-that-be than a nonprofit that takes it upon itself to placate, insure, and temper the precarious middle-class. ..."
"... So which ivy-league management school / guru is most culpable in unleashing the whole lean-mean-outsourcing-machine monster because it's slowly destroying my ability to remain in IT. ..."
"... "how the big company love of outsourcing means that traditional employment has declined and is expected to fall further." – ..."
"... Story of my life! I'm still trying to get paid for freelance work that I did in December. This payment delay is wreaking havoc with MY cash flow. ..."
"... Another area of friction and waste with IT consulting and other contracting, is that an employee of a company simply and efficiently plugs into their existence administrative system (HR, timekeeping, payroll, etc). ..."
"... I work in engineering at a gigantic multinational vehicle manufacturer and the role of "consultants" has been expanding with time. Rather than consultants being people with specific technical expertise who work on one subsystem component with clear interfaces to other things, it now encapsulates project managers and subsystem / function responsible people who need to have large networks inside the company to be effective. ..."
"... Considering the huge amount of time it takes to get a new hire up and running to learn the acronyms and processes and the roles of different departments, it's a bit absurd to hire people for such roles under the assumption that they can be quickly swapped out with a consultant from Company B next week. ..."
"... It's pretty clear that management sees permanent employees on the payroll as a liability and seeks to avoid it as much as possible. ..."
"... Because they, unlike us, understand class. I can state for a fact that the Big Three auto companies are well aware of how much cheaper health care costs are for them in Canada and how much better off they would be here, cost-wise, with a national health care system where McDonald's and Wal-mart have to pay the same per hour or per employee cost as they do. But it turns out cost isn't everything. Corporate (capitalist) solidarity rules. ..."
"... Michelle Malkin ..."
"... “The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destructionâ€. ..."
The Wall Street Journal has an important new story,
The End of Employees
, on how the big company love of outsourcing means that traditional employment
has declined and is expected to fall further.
Some key sections of the article:
Never before have American companies tried so hard to employ so few people. The outsourcing wave
that moved apparel-making jobs to China and call-center operations to India is now just as likely
to happen inside companies across the U.S. and in almost every industry.
The men and women who unload shipping containers at Wal-Mart Stores Inc. warehouses are provided
by trucking company Schneider National Inc.’s logistics operation, which in turn subcontracts with
temporary-staffing agencies. Pfizer Inc. used contractors to perform the majority of its clinical
drug trials last year .
The shift is radically altering what it means to be a company and a worker. More flexibility for
companies to shrink the size of their employee base, pay and benefits means less job security for
workers. Rising from the mailroom to a corner office is harder now that outsourced jobs are no longer
part of the workforce from which star performers are promoted
For workers, the changes often lead to lower pay and make it surprisingly hard to answer the simple
question “Where do you work?†Some economists say the parallel workforce created by the rise
of contracting is helping to fuel income inequality between people who do the same jobs.
No one knows how many Americans work as contractors, because they don’t fit neatly into the
job categories tracked by government agencies. Rough estimates by economists range from 3% to 14%
of the nation’s workforce, or as many as 20 million people.
As you can see, the story projects this as an unstoppable trend. The article is mainly full of success
stories, which naturally is what companies would want to talk about. The alleged benefits are two-fold:
that specialist contractors can do a better job of managing non-core activities because they are specialists
and have higher skills and that using outside help keeps companies lean and allows them to be more "agile".
The idea that companies who use contractors are more flexible is largely a myth
.
The difficulty of entering into outsourcing relationships gives you an idea of how complex they are.
While some services, like cleaning, are likely to be fairly simple to hand off, the larger ones are
not. For instance, for IT outsourcing, a major corporation will need to hire a specialist consultant
to help define the requirements for the request for proposal and write the document that will be the
basis for bidding and negotiation. That takes about six months. The process of getting initial responses,
vetting the possible providers in depth, getting to a short list of 2-3 finalists, negotiating finer
points with them to see who has the best all-in offer, and then negotiating the final agreement typically
takes a year. Oh, and the lawyers often fight with the consultant as to what counts in the deal.
On the one hand, the old saw of "a contract is only as good at the person who signed it" still holds
true. But if a vendor doesn't perform up to the standards required, or the company's requirements change
in some way not contemplated in the agreement, it is vasty more difficult to address than if you were
handling it internally. And given how complicated contracting is, it's not as if you can fire them.
So as we've stressed again and again, these arrangements increase risks and rigidity. And companies
can mis-identify what is core or not recognize that there are key lower-level skills they've mis-identified.
For instance, Pratt & Whitney decided to contract out coordination of deliveries to UPS. Here is the
critical part:
For years, suppliers delivered parts directly to Pratt’s two factories, where materials handlers
unpacked the parts and distributed them to production teams. Earl Exum, vice president of global
materials and logistics, says Pratt had “a couple hundred†logistics specialists. Some handlers
were 20- or 30-year veterans who could “look at a part and know exactly what it is,†he adds .
Most of the UPS employees had no experience in the field, and assembly kits arrived at factories
with damaged or missing parts. Pratt and UPS bosses struggled to get the companies’ computers in
sync, including warehouse-management software outsourced by UPS to another firm, according to Pratt..
The result was $500 million in lost sales in a quarter. Pratt & Whitney tried putting a positive
spin on the tale, that all the bugs were worked out by the next quarter. But how long will it take Pratt
& Whitney to recover all the deal costs plus the lost profits?
There's even more risk when the company using contractor doesn't have much leverage over them. As
a Wall Street Journal reader, Scott Riney, said in comments:
Well managed companies make decisions based on sound data and analysis. Badly managed companies
follow the trends because they're the trends. A caveat regarding outsourcing is that, as always,
you get what you pay for. Also, the vendor relationship needs to be competently managed. There was
the time a certain, now bankrupt technology company outsourced production of PBX components to a
manufacturer who produced components with duplicate MAC addresses. The contract manufacturer's expertise
obviously didn't extend to knowing jack about hardware addressing, and the management of the vendor
relationship was incompetent. And what do you do, in a situation like that, if your firm isn't big
enough that your phone calls get the vendor's undivided attention? Or if you're on different continents,
and nothing can get done quickly?
We've discussed other outsourcing bombs in past posts, such as when British Airways lost "tens of
millions of dollars" when its contractor, Gate Gourmet, fired employees. Baggage handlers and ground
crew struck in sympathy, shutting down Heathrow for 24 hours. Like many outsourced operations, Gate
Gourmet had once been part of British Airways.
And passengers blamed the airline
, not the wprkers.
Now admittedly, there are low-risk, low complexity activities that are being outsourced more, such
as medical transcription, where 25% of all medical transcriptionists now work for agencies, up by 1/3
since 2009. The article attributes the change to more hospitals and large practices sending the work
outside. But even at its 2009 level, the use of agencies was well established. And you can see that
it is the sort of service that smaller doctor's offices would already be hiring on a temp basis, whether
through an agency or not, because they would not have enough activity to support having a full-time
employee. The story also describes how SAP has all its receptionists as contractors, apparently because
someone looked at receptionist pay and concluded some managers were paying too much. So low level clerical
jobs are more and more subject to this fad. But managing your own receptionists is hardly going to make
a company less flexible.
Contracting, like other gig economy jobs, increase insecurity and lower growth.
I hate to belabor the obvious, but people who don't have a steady paycheck are less likely to make major
financial commitments, like getting married and setting up a new household, having kids, or even buying
consumer durables. However, one industry likely makes out handsomely: Big Pharma, which no doubt winds
up selling more brain-chemistry-altering products for the resulting situationally-induced anxiety and/or
depression. The short-sightedness of this development on a societal level is breath-taking, yet overwhelmingly
pundits celebrate it and political leaders stay mum.
With this sort of rot in our collective foundation, the rise of Trump and other "populist" candidates
should not come as a surprise.
I would add this. It was deplorable for Trump to have fired Acting AG Sally Yates after she ordered
Justice Department lawyers to stop defending Mr. Trump’s executive order banning new arrivals to the
U.S. from seven Muslim-majority countries.
But Sally Yates was a hero for another reason. Yates was cracking down on systemic abuses by holding
top healthcare executives personally accountable for false Medicare and Medicaid claims and illegal
physician relationships.
I remember hoping: Well, maybe Obama will actually get some decent folks into the Judiciary bring
kids home from Iraq, maybe try for Medicare over 55 (to the advantage of the insurance & Pharma sectors?)
But the one thing I'd actually expected him to accomplish was enact
https://www.congress.gov/bill/110th-congress/senate-bill/2044
which would get the Kleptocrats a
few more years out of the moldering corpse of American Labor (and not hurt multinationals, who'd off-shored,
outsourced or speciously re-classified their largely undocumented, 3rd party, contingency/ gig employees
decades previously).
Wage-theft Democrats was a new concept to some of us more easily deluded working
class Yankees, reeling from Bush. I think a strong fantasy life's essential nowadays.
I imagine that this is among the pesky downsides of living in our YOOJ autocratic neo-Confederate
theocratic kleptocracy; wage theft has always been right at the top of both parties' platforms?
If they can't hide it, who will they blame it on?
"people who don’t have a steady paycheck are less likely to make major financial commitments,
like getting married and setting up a new household, having kids"
"more brain-chemistry-altering products for the resulting situationally-induced anxiety and/or depression."
Decline in family formation and a populace seeking to anesthetize itself are indications of a civilization
in decline. Our problem is much bigger than employment.
You can employ deplorables, you can enslave deplorables, you can kill deplorables. The only way
that a "return maximizing" system won't choose killing, is if the unit cost of killing is higher
than enslavement or employment. I can hope that the bureaucratic effect of increasing costs will
work faster on the cost of killing or enslavement. Reducing the cost of employment (regulations)
wouldn't hurt.
We'd guessed this was why Dickens, Niccolò Machiavelli, Frederick Douglass, E. A. Blair &
Marx were being burnt by the DeVos Christians. Why teach management for FREE, when the drooling
Know Nothings will PAY to send their dead-eyed vipers to seminars or A Beka online curricula?
Eliminate environmental protections and the entire industry that investigates, researches,
enforces, litigates, and mitigates environmental impacts are likewise eliminated. These are generally
highly skilled professions, and has wide ranging impacts from workers all the way to the global
ecosystem. Then there are economic ripple effects on top of that.
If we are going to eliminate an entire career tree, health insurance is a better choice.
Not sure what this has to do with the article, but yes people will LOSE jobs to Trump, skilled
and socially beneficial jobs like at the EPA.
For heaven knows what, jobs building useless walls to nowhere I guess, which somehow in
Trumps warped mind is a more productive line of work (it won't even work to curtail immigration).
Thank you for your astute, pertinent & seldom mentioned comment (which to those of us in
QA, is something we've believed central to the issue, not a tangent or unexpected side benefit
of our sharecropper corporatocracy).
We'd noticed contract buy-outs & forced early-retirement
in the steel industry, in the 90's, our clients' engineers (scruffy & cantankerous, who'd stand
by us if we were right & replace us if we got out of hand) were all replaced by clueless, gullible
desk jockeys, devoid of empirically honed judgement eventually, we'd have 2-3 gnarled old
timers, amidst crews of neophytes (first they tried very well trained & knowledgeable foreign
nationals, then pensioners, let go from the vendors) finally, they tried to 1099 the desperate
ones, on the run from skip-chasers, deputies & repo-men.
They'd try sending us half way across
the country, mention nothing, then see what we'd do (once we figured out we'd earned no overtime?)
We'd be in Indian or Russian owned mills where 80% of the employees were totally undocumented
foreign nationals, many of the balance wildly underpaid temps.
And the good-old-boy management
resembled characters outa Harriet Beecher Stowe. Lots of our counterparts were straight back
from Afghanistan & Iraq, verifying that most of their gig- economy contingency employment had
all been the same, regardless of industry sector: off-shored aircraft, as well as bridge, structural,
water, nuclear, inspectors what regulation?
Leveraging guilt to rationalize the Invitation of the least educated into your nation from the
most barbaric failed states and cultures in the world is another sign of civic decay.
Yup, many of the Taxi and Uber drivers around here arrived and took out private loans to
get "educated" and now are deep in debt and are too ashamed to go home.
Start focusing on the predators at the top of the pyramid scheme and then watch how those
same culprits and their networks "come to the rescue" in order to capitalize on the "pain
and suffering" they help to create. I see a pattern, don't you?
Barbarians are at the gates but you may be looking in the wrong place. Beware all types
of people are "vulnerable" and they will more easily identify with other human beings living
under a variety of diminished circumstances. Victim shaming won't be a viable option in the
not so distant future.
Dave, I hope you are not including Syria in your "failed states and cultures" description.
Syrians are
very well educated
and will add much to any nation's economy.
It is not a sign of "civic decay"
in the Syrian culture, but a sign of civic decay in a nation that will not accept people from
a war zone. An invitation should not be dependent on one's education but on one's need and desire
to survive a war zone..
Iraqis were also comparatively educated, right up through university, under its autocratic
leader. Libyans were, by and large, well educated, or at least getting so, under its autocratic
leader. The most poorly educated, probably, are those countries which have been under US or
European hegemony for generations: a lot of Central and south America, a lot of Africa, etc.
Not to mention the US itself, which has been colonizing its own hinterland for many decades.
The same applies to countries like Canada, Australia, etc. particularly in terms of their indigenous
populations.
Don't forget student debt. Not only are many recent graduates underemployed or unemployed, they're
in the hole tens of thousands. Further incentive not to make any sort of financial commitment. Student
debt should be cancelled to promote earlier family formation.
This trend matches up with the trends of dropping life expectancy, especially among the lower half
of income earners, and with slowing economies globally.
It's almost a negative feedback loop.
Politcal implications: the rise of far right politics; if you are a monarchist, or want to create
an aristocracy, these trends are probably in your interest.
Sure, it is partly psychological but it also has direct connection (by DESIGN) to the fact that
such people don't have healthcare, even with Obamacare insurance. The idiots that sing the praises
of Obamacare and how millions now have insurance seem to think that means those people have HEALTHCARE
to go with it.
Insurance is theft. Insurance is not even remotely "healthcare". Much of those newly insured have
their insurance, thanks to a government subsidy, but STILL lack healthcare because their premiums
and deductibles are too high to allow them to see doctors. Thus, they're dying or going to die sooner
due to untreated maladies, but at least they paid insurance company CEOs their bonuses with their
subsidized insurance payments!
Mutual insurance however is (was) socialist by nature. The true mutuals were crushed out of
existence by share for share conversions to private companies that ripped off policy holders and
gave a big payday to the C suites and the lawyers. Thanks to inept state insurance commissioners
and assemblies for that one.
while having health insurance doesnt mean you have health care, not having it does mean not
having health care at all, short of having a life or death condition, as hospitals (for now an
way) are only required to stabilize you. they arent required to cure you.
but then the high deductible insurance is one of those scams that some politicians gave us
because they could suggest that the patient (customer) could just shop around for better deals.
course that depends on us patients knowing what medical treatment is best for us, and which is
the cheapest of those., the former pretty much requires patients to be as knowledgeable as doctors.
the latter means we have to know what the treatments cost. could luck with that
I would force policy-makers in every advanced western nation to read and reflect on the last paragraph,
because it describes a mindset and a series of practices that are now found everywhere in western economies.
As David Harvey reminds us in his book on the Contradictions of Capitalism, Marx identified long ago
that there was a contradiction between holding down employees wages, and still expecting them to have
the purchasing power to buy the goods their cheap labour was making.
This problem has become more acute
with time, simply because we buy a lot more "stuff" than they did in the 19th century, and we take a
lot longer to pay for it, often on credit. Houses, cars, household goods, even computers, are now significant
expenditure decisions, repaid at least over months, if not years and even decades. The social corollary
of mass home ownership, after all, is some assurance that you will be employed over the life of the
mortgage. Otherwise, not only won't you buy the house, you won't improve or extend it, or even maintain
it, so a whole series of other purchases won't get made, and the construction and maintenance industries
will have less work. Instead, you'll save money, so removing purchasing power from the economy.
I assume there are people in large private sector companies clever enough to under stand this, but as
always they are focused on how much money they can extract from the system in the next few years. After
that, if the system crashes, well, who cares, They're all right.
Very true. Capitalism only works as long as enough people (or states) are able to take up ever-larger
debt, to close the gap (called "profit") between expensive goods and comparatively cheap labour.
Watching developments in recent years, this very source of profit and thus base of the economic system
is, even on a global level, quite limited
Sure. Marx Capital 1 on the crisis of production. Marx capital 2 on the crisis of realization but
this constitutes just one undesirable aspect-this one indeed very macro- among the many others which
the expansion of the "contracting-subcontracting chain" has brought and will bring about.
The Wall
Street Journal article is-as it is to expect- late, blind to the core problems of workers and incapable
to see and understand the true practical raison ( & reasons) d'être of outsourcing. I guess Yves
Smith purpose was just to broadly replicate WSJ article
Good to point out Gat Gourmet. Almost all outsourced jobs in the beginning of places where I have
worked were once part of the company. The entire art department save two management employees were played
off and rehired by a new company doing the same work with less benefits.
Then that company was later disolved. I have seen this many times in the corporate design field now. Usually ends with disaster
and he hire of folks some back to full time but most to freelance. So I guess in a way it works out
for the company in the end and not for the worker. Amazing the amount of money a company is willing
to lose this way then use the same to pay workers better.
An excellent critique, for those who were wondering. The take away paragraph, summing up
the actual work done and purpose of, the Freelancers Union:
Still, it's hard not to notice there could be nothing more convenient to the corporate
and governmental powers-that-be than a nonprofit that takes it upon itself to placate, insure,
and temper the precarious middle-class.
So which ivy-league management school / guru is most culpable in unleashing the whole lean-mean-outsourcing-machine
monster because it's slowly destroying my ability to remain in IT.
I don't know the answer to your question, but you would have to go back over twenty years to find
it. What I find remarkable is that even though everybody affected in the early stages could see what
a dumb, destructive idea it was, the MBA types never caught on, even though most of them were not
so far up the hierarchy they could not ultimately be affected.
Contractors need Guilds or Trade Associations that are well organized and legally able to set minimum
standards for billing and performance. This is an area where Trade Unions have failed with respect to
some professions, and apparently (from what I've heard) the RICO statutes need to be amended to allow
for this. It's time to rig the other side to make companies think twice before replacing employees with
temp workers or contractors, to keep jobs within the US, and to provide a cushion and a "floor" to those
that take the risk of entrepreneurship, preventing a race to the bottom.
Yes! Geographically bound temp unions or hiring halls for all temp workers allied with low-wage
worker associations. This is NOT something that established unions want, so who will agitate for
it?
Something like the I.W.W is what I'd like to see. Yea I know the response is: they are still
around? Well not what they were long ago of course, but with the prison strike, yes around and
rising.
"how the big company love of outsourcing means that traditional employment
has declined and is expected to fall further." –
This line pissed me off this morning more than most other mornings. I literally just said goodbye
to a long-time colleague (Big Pharma) who is being outsourced as of today. The kicker(s):
The job is not high tech
Employee(s) trained their replacement who are H-1B from India
The company is moving the division to India
Of note, my state (MA) is responsible for over one-quarter of all H-1B's every year. Thankfully a
few in the industry are helping get the word out, like Nanex's Eric Hunsader yesterday. The outsourcing,
off-shoring, and H-1B abuse has to stop, but not sure The People have the will to hold political office
holders accountable enough to truly change this paradigm.
Agreed, but I've been saying the exact same thing since 1980, so I've been lobbying and being
a volunteer activist against this for many years, and yet I still run into women (not too many men
anymore) in their 60s and 70s who believe offshoring of American jobs, and insourcing foreign visa
replacement workers is fantastic (truly, we are a dumbed down society today, where they routinely
protest on behalf of the financial hegemons).
Best book on this (and I am no conservative and have never voted r-con) is Michelle Malkin's book
(with John Miano),
Sold Out!
This has been going on for a long time, and by design: with every "jobless recovery" one-fifth
of the workforce is laid off, and one-half of that one-fifth will never find another job, while one-half
of the remainder, will only find lower-paying jobs.
And each and every time, more jobs are restructured as temporary or contractor type jobs. We've
had a lot of "jobless recoveries" to date.
A recent study from Lawrence Katz and Alan Krueger found that 94% of the new jobs created over
the past some years were all part-time, while a study from Rutgers University a year or so ago found
that one-third of the new jobs created couldn't be verified as actually existing!
Nothing particularly new here, as it has been going on for quite some time (another great book
is Ron Hira's book,
Outsourcing America
).
In every category of labor – blue and white collar – the press is on to increase the supply and reduce
the demand for labor.
The book ends: The Clintons in 92′ put thru the WTO / NAFTA – shut down 10's of millions of jobs
and factories – blue & white collar. Obama did the same, with anticipating Hillary would be elected,
put forth the TTP to enable unlimited H1-b for tech workers from off shore. The Neo Liberal Democrats
were at the forefront of of this 25 year Plan for labor devaluation (with Republican help).
The Immigration Policy by government both illegal and legal were at the epicenter of increasing the
supply in all categories with various programs while Obama also increased the regulations to wipe out
more factories and deliberately reduce demand.
The solution is eliminate immigration in all forms until the 95 Million are employed and wages rise
by the equivalent of what was lost in the past 15 years plus Tariffs to enable a marginal cost compared
to imports to allow domestic factories to expand demand.
Increase the demand and lower the supply of labor will mean potentially a switch will occur from
1099 to W-2 as companies have to secure labor reliability in a short labor market which is squeezed.
The Millennials sooner or later will figure it out. Identity Politics which enables a greater supply
of labor and diversion of attention to intangible values at the expense of tangible values has to be
substituted for Labor Only Politics.
These young people have been duped based on the recent focus of the demonstrations. They don't understand
they were screwed deliberately and with great malice by "Going with Her".
I've been keeping count over the years, and as close as I can find, over 170,000 production facilities
were shipped out of the country. (Or, as David Harvey phrased it: "Identity politics instead of class
analysis.")
One aspect of outsourcing that the article does not hit upon is the impact on company cash flows,
which has some importance to large outsourcing initiatives. A company must pay its employees within
6 (it might be 7) days of the end of the pay cycle, which is typically two week. By contrast, when outsourcing,
at the end of the month the contractor will provide an invoice, the company will then pay according
to its payment cycle. This could be 30, 45, 60, 90, or even 120 days. The contractor still must pay
its bills, in essence it's providing a low cost loan to firm (which often has a lower cost of capital).
This approach, including the extension of payments has been largely driven by financial/business consultants.
It can actually get worse – they might not pay you at all, hoping that you'll file a lawsuit,
which will be interpreted according to the contract, rather than legislation which covers employment
issues. The litigation costs might exceed any payments you'd receive.
My guess is that this wouldn't happen to an individual working under a 1099 (as word might
get around), and very large firms often have leverage (not providing continuing services), but
medium-size firms often get held up for months and years (especially once the contract has
ended).
Another thing the article glosses over is that most outsourcing is simply wage cutting. I have
never once seen confirmation of the notion that "specialist" firms provide better services at comparable
labor costs than firms can do in-house. The double-bubble is that firms (and public sector employers)
often spend more on outsourcing than they would doing the work in house despite the wage savings,
which all accrue to the outsourcer of course.
When the airlines went on their deliberate BK spree in the 90's, they outsourced flying to
regional carriers. Regional a/c (45-90 seaters) have higher CASM's than the a/c the airlines actually
owned. In brief, it is cheaper to transport 100 passengers on a 100 seat a/c than to transport
100 passengers on two 50 seat a/c. That's been a fact since the Wright brothers broke the ground.
FWIW, SouthWest never went the regional route, never went BK and pays their unionized employees
quite well.
The BK spree was all about breaking labor, not operational efficiencies that would actually
save money.
but now it seems the majors are not to happy with the regionals , cause customers cant tell
the difference between them, the next problem is that for some reason the regionals cant find
pilots. seems that pilots dont want to work for less than 30,000 a year.
Another area of friction and waste with IT consulting and other contracting, is that an employee
of a company simply and efficiently plugs into their existence administrative system (HR, timekeeping,
payroll, etc).
With a consultant, there has to be reconciliation between the vendor's records and the
company's records, which means work hours burned matching everything up. And that assumes they do match
up neatly; If the vendor says "our consultant worked 50 hours this week, pay them as such" and whoever
oversees the consultant at the company claims they only approved for 40 hours, now you've got a mess
on your hands, could potentially go to the lawyers.
The idea that companies who use contractors are more flexible is largely a myth.
The difficulty of entering into outsourcing relationships gives you an idea of how
complex they are. While some services, like cleaning, are likely to be fairly simple
to hand off, the larger ones are not.
I work in engineering at a gigantic multinational vehicle manufacturer and the role of "consultants"
has been expanding with time. Rather than consultants being people with specific technical expertise
who work on one subsystem component with clear interfaces to other things, it now encapsulates project
managers and subsystem / function responsible people who need to have large networks inside the company
to be effective.
Considering the huge amount of time it takes to get a new hire up and running to learn
the acronyms and processes and the roles of different departments, it's a bit absurd to hire people
for such roles under the assumption that they can be quickly swapped out with a consultant from Company
B next week.
It's pretty clear that management sees permanent employees on the payroll as a liability and seeks
to avoid it as much as possible.
"
It's pretty clear that management sees permanent employees on the payroll as a liability. "
No doubt correct. But why is that? Over time, mandates on employers - particularly large employers
- just keep escalating. Health care; pensions; overtime; layoff notifications: regulators just keep
raising the ante. Employers respond by trying to reduce their profile and present a smaller target
to their predators. Staying under 50 employees wins a lot of exemptions from federal regulations.
Taken to an extreme, some developing countries (Argentina being one example) have European-style
labor regulations guaranteeing job security and mandating generous compensation when employees are
laid off. With hardscrabble small businesses being in no position to shoulder such risks, the result
is that about 40 percent of employment is
trabajo en negro
, with no benefits or protections
whatsoever - a perfect example of unintended consequences.
Editorial comments such as "these [contracting] arrangements increase risks and rigidity" ignore
that government employment regulations
also
increase risks and rigidity. There's a balance
of power. Overreaching, such as Obama's surprise order to vastly increase the number of employees
subject to overtime pay, leads to employer pushback in the form of more contracting and outsourcing.
Getting whacked out of the blue with a big new liability is unfair.
Concur about costs, and health care is the big one. Every other industrialized nation we compete
against has national health care. Given that, why doesn't business support Medicare for all and
get health costs off their books? Plus it would be a damsite easier to start up a business if
one had health care.
Because they, unlike us, understand class. I can state for a fact that the Big Three
auto companies are well aware of how much cheaper health care costs are for them in Canada
and how much better off they would be here, cost-wise, with a national health care system
where McDonald's and Wal-mart have to pay the same per hour or per employee cost as they
do. But it turns out cost isn't everything. Corporate (capitalist) solidarity rules.
Yes, yes, damn yes!! It's about your class, not your race, not your education, not
your gender. As Lambert might say, identity politics (your race, your education, your
gender) is used to keep your eye
off
the prize: economic opportunity
and security.
It is also easier to have part-time workers because they are still covered by health insurance
in some sort of national health insurance system. In the US, the part-time workers will have
high turnover as they look for full-time jobs to get access to health insurance.
Workers are also more likely to start their own businesses to provide services since the
health insurance is just a fee they pay instead of an astronomical non-group insurance bill.
COBRA insurance premiums are ginormous if you need to continue coverage after you leave a company.
Economists have been decrying the lack of employee mobility and small business formation
over the past decade or so. Health insurance is probably a primary reason for this. Obamacare
hasn't been around long enough and with enough certainty to change that dynamic yet.
It's probably part of it, though I suspect the bad labor market is part of it as well.
It's one thing to quit a job to start a business when you think "if it doesn't work out,
I can always go back to my old career and easily be hired", another when quitting a good
job means one might not land another ever.
haven't seen any more info on Hollande's "Flex – Security" plans to give corporations a way
to lay off workers to improve the corporation's revenue. French Labor was having none of it and
then Hollande went negative in the polls and was done for. Our contracting out former corporation
departments sounds like bad quality control at best. If the state – whatever state you can name
– is going to prop up all corporations everywhere because they can no longer successfully compete
then something is fundamentally wrong with the system that demands such murderous and mindless
competition.
well there also that wage theft rules, that employers don't like. course if you look at work
mans comp, you will find that it no longer works to protect employees any more. and maybe that
is also why employers are get rid of employees. plus there is all of that needing to manage them.
but you still end up having to manage vendors too, and while i suppose you could hire another
vendor to manage the vendors (not really sure this will work out well), it still leaves the biggest
problem
since consumers are about 70% of the entire economy (always wonder if this is true. because
almost all corporate 'investment' is done because of customer demand), seems like this business
fad, will end up with fewer customers (which seems to be the way its working too, as evidenced
by the falling sales figures from companies, even Apple), so it like business is like lemmings,
going a cliff, because some one else started
So are you a proponent of Medicare-for-all? It would be a tremendous benefit to corporations
to get out of the healthcare business and also increase employees' willingness to become freelancers
and consultants, since they'd never have to worry about healthcare.
The truth is that citizens expect a certain amount of social welfare and security. This can
be provided by 1) individuals themselves, 2) private players e.g. corporations, or 3) public players
e.g. govt. Each has downsides. If you expect individuals to provide for themselves, it will less
inefficient than having professional managers, and individuals will cut down on other consumption
and save more, thereby hurting an economy such as ours which is highly dependent on consumption.
This leaves companies and government. If companies lobby against public welfare programs like
nationalized health insurance, unemployment insurance, social security, etc., they shouldn't be
surprised if government foists those requirements back on them through back-door regulations.
To be fair to companies, most of the ones engaged in the "real economy" e.g. manufacturing,
actually wouldn't mind medicare for all, or some other program that relieves them of the burden
of providing healthcare to their employees. But they're being drowned out by the financial economy
of Wall St., banking, insurance, etc. who depend on putting more money in the hands of individuals
from whom they can extract much higher fees than they ever could from govt or corporate HR depts.
If companies don't want increased health mandates, for example, their enemy wasn't Obama: it
was the private health insurance companies that didn't want a public plan.
Yeah when I worked for one of the big 3 at an assembly plant, I felt that the use of temporary
contractors could have very negative implications.
Most of the staff though were reasonably well paid, although asked to work long hours. I think
though that overall, highly paid permanent workers pay for themselves many times over.
One aspect of the whole fandango that I don't get is how the IRS allows whole departments within
a company to be outsourced: If people show up at your plant or office every day to work on your tasks,
they are your employee, not a contractor. Is this melting away of the idea of an employee because of
lack of enforcement or some change in IRS rules that I am not aware of?
Basically, if you control a worker's day, and if that worker works regularly for you, the person
is your employee. I don't see how companies get away with this sleight of hand–avoiding, at the most
basic legal level, who is on staff or not. [Unless the result, as many note above, is to increase class
warfare.]
The company doesn't get away with it if someone is willing to whistleblow to the IRS and said
company fails the IRS 20-Factor Test (IC vs. employee). The nice thing there too, is that the tax
burden will be on the company and not the employee. While I don't advocate being a stoolie, if a
company wants to screw me over turn-about is fair play. I do the best I can to avoid those kinds
of companies in the first place.
"
One aspect of the whole fandango that I don’t get is how the IRS allows whole departments
within a company to be outsourced
. . "
If I understand your question correctly it is because a federal regulation was enacted by congress
(I believe one of them was faux-progressive, Jim McDermott, no longer in congress but co-founder
of the India Caucus, to replace American workers with foreign visa workers from India) which
forbids
oversight of the foreign visa program
- and yes, they established a federal regulation killing
oversight of the program by the government!
Someone quoted Norm Matloff (a known bigot) above. You are now quoting anchor child Filipino
bigot
Michelle Malkin
of all people ? It's not helping your case.
The H1-B program is a few hundred thousand
legal
tax paying people a year. There are
21 million Mexican illegals in this country. What do you think has more downward pressure on wages
? .005% H1-B (yeah, you read that right) of the total immigrant/wage pressure ? It's idiotic and
a purely bigoted worldview.
We are supposed to regard "a few hundred thousand" as bupkis when they are concentrated
in one sector?
The H1-B visa program has has a huge impact on wages in the IT sector and has virtually
eliminated entry-level computer science jobs. This is strategically foolhardy, in that the
US is not creating the next generation of people capable of running critical infrastructure.
And the illegal immigrants do pay taxes: sales, gas, and property taxes through their rents.
And many actually do pay FICA. The Treasury recognizes that certain Social Security numbers
are reused many times, and it's almost certainly for illegal immigrants. In fact, the IRS encourages
illegal immigrants to "steal" Social Security numbers:
That article whinges about possible tax credit scamming, but even that estimate is well
below what they pay in FICA, $12 billion. And pretty much none of them will draw benefits.
This is from memory, but I believe they collect over $4 billion from these SSN per year.
And most of these jobs are seasonal and/or too low wage for them to pay much in the way of
income taxes when they are being paid in cash.
H1-B is not in one industry, the .005% is spread across entry level jobs in all industries:
finance, automotive, insurance, arts, film, automation, etc. The total amount of H1-B is
minuscule, vanishingly close to zero in a country of 300+ million and 20+ million illegals.
You don't seem to be complaining about the tens of
millions
that used to concentrated
in one sector..actual manufacturing. Wonder why ? Here's a hint: that sector
used
to make computer peripherals, keyboards, mice, terminals, monitors, LCD's, chips, motherboards,
pretty much everything in the USA.
Employees in china, taiwan, etc pay zero USA taxes and they displaced millions of manufacturing
jobs. And ironically, you are using an entirely outsourced computer (that actually displaced
tens of millions of jobs in the aggregate) to complain about the minuscule .005% H1-B effect.
A few hundred thousand entry level coding jobs (which are ridiculously simple and lo-tech,
google
13 year olds
getting Microsoft certified to see how low down on the value
chain this is). You genuinely think writing a few for-loops (I am simplifying a little but
you get the idea) is hard ?
Certainly, way way less capital intensive and way way less barrier to entry than Hi-Tech
manufacturing. It's all going to be outsourced much faster than manufacturing was, since
there is literally no barrier to entry. And H1-B is a good thing, relatively speaking, compared
to full on outsourcing (just like manufacturing was).
Like I said, the only explanation for these anti H1-B posts is plain old bigotry. No
other explanation comes close.
Might as well finish my train of thought..then I'm outta here.
There are less H1-B visas this year than
refugees
, Refugees (not to mention
the 20 million illegals) also put downward pressure on wages across all industries, but
of course, those are all food servicing/picking/janitorial jobs and who cares about those
people right ? (sarcasm for the impaired)
So, coming back to H1-B's..let's take the logical alternative and ban all H1-B's entirely
and deport the ones on H1-B visas. What happens then ?
1) They can do the job exactly as well remotely (all they need is email/internet/skype).
2) They get paid even less (but more than zero).
3) They pay no taxes.
4) Their output is words..code is the same as prose and math. Good luck banning math/words..if
it can be printed on a t-shirt, it ain't bannable. (See the famous bernstein crypto case
from the early 90's for a illustration of this).
5) And finally..there are zero new jobs added for native USA'ians (which would now cost
more, given the alternative).
It makes the situation far worse than it is today. There is fewer local coffee shop
selling coffee, fewer rental units getting rented, fewer groceries getting bought, cars
being purchased, etc.
For a easily displaceable and low barrier to entry coding gig, there isn't any easy
answer. H1-B's are actually the best
solution
(or at the very least neutral),
not the problem.
The H1-B visa program is operated so as to wreck the bargaining power of native born young
U.S. workers. Young Americans are increasingly likely to be nonwhite AND from the less valued
(not Asian) subgroups of nonwhite. The damage H1-Bs do to our white Baby Boomers is almost
incidental at this point; they are aging out of the workforce. And given the intense age bigotry
of the IT subculture, they are not a factor within it at all at this point.
H1-B visas lock our striving, capable working class young people out of upward mobility.
Kids who are now graduating from say, San Jose State with skills as good as those of South
Asians don't get jobs that they are qualified for, because they are shut out of entry to the
business. They are disdained in Silicon Valley because the majority of entry level conduits
to employment are now locked up (via social contacts, and "who-you-know" relationships) by
men from the subcontinent.
Your race argument is pernicious and I suspect, promoted in the full the knowledge of this
fact. It is a great shame that we are relying on kooks like Malkin to promote obvious truths,
but the shame belongs to our morally derelict 'liberal' chattering class, not those who listen
to her and her ilk for lack of other sources.
An underappreciated aspect of contracting versus cultivating your own employees is that it hollows
out the organization to the point that it may no longer have competence to perform its mission. Having
an apparent success at contracting out menial tasks, the temptation is to keep going and begin to contract
out core functions. This pleases the accountants but leaves the whole organization dependent on critical
talent that has very little institutional loyalty. When an inevitable technical paradigm shift occurs,
who can you count on to give you objective and constructive advice?
Costs of training and cultivating employees are high, and it is tempting to think that these costs
can be eliminated by using contractors. It is strictly an apparent, short-term gain which will in due
time be revealed as a strategic mistake. Do we have to learn every lesson the hard way?
yes, and when I read that Pfizer farms out research, I also wondered if retention of the outsource
company contract is results-related. could new drug results hinge on a company wanting to keep their
Pfizer contract by telling them what they want to hear?
Agreed. Every time a company offshores jobs or goes through another round of layoffs, it loses
its institutional memory. This is particularly acute in the mainframe IT systems that prop up the
TBTFs (yep, they offshored these too). After a while, nobody understands exactly how these systems
work and can only get to the bottom of them by reading code, which is a pretty flawed way to learn
the business. This has been going on for years and nobody cares.
Centralized bargaining - a.k.a., sector wide labor agreements - is the only strategic answer to contracting
out. Done in continental Europe, French Canada, Argentina, Indonesia.
(Take a vacation from reality with Soma - one gram and I don't give a damn.)
The one word I don't see in your excellent writeup is
loyalty
. Companies, like countries
depend to a great extent on social constraints to keep people committed to the group. You cannot monitor
all people all the time and doing so causes them to turn against you. But companies staffed with contractors
and temps and temps supervising contractors have no loyalty to the company. Ergo no one employee has
any reason to go the extra inch or to turn down the chance to sell out for personal gain should the
opportunity arise.
All that imposes real costs that companies conveniently ignore because they are not always realized
in share price.
I was going to add the same thought, but use the label "goodwill." It is something that appears
on balance sheets in enormous amounts depending on what the accountants think it may represent.
There is a "goodwill bank" in the labor pool of any given company, and when the balance hits zero,
the company will fail, "emigrate" its capital, or go public to the greater fools. Companies are engaged
in a savage race to the bottom that is inherent in corporate structure: executives are now playing
with somebody else's money, and somebody else's life. If corporate liability were suddenly returned
to the days of the partnership, what a change we would see. And those days were not so long ago:
Wall Street remembers the 1960s.
PS What a treat to come here and see informative journalism and commentary instead of the monkey
cage.
My daughter was recruited and interviewed by Genentech and then sent to work for an organization
called PPD. PPD did nothing in this relationship, other than take money from Genentech pocketed about
1/2 of that and then pay her the rest. I really couldn't figure out what the heck the point of this
was, other than some long running strategy to ultimately depress salaries of Genentech chemists.
One of my kids works in a unionized metal foundry (they still exist in the US!). When they need
new workers, they bring several in through a temp agency for several months. If they can cut it and
are acceptable, then they get pulled into the union or into the plant management team. This allows
them to try out several people on a rent-to-own basis, but in the long run they become loyal company
employees with very low turnover.
Contract-to-hire is not new. The problem from an employee perspective is trying to evaluate
when a company is actually serious about hiring if the contractee does a good job, and when it's
just empty promises and they have no intent of making full time job offers at all.
BTW – the Genentech scientists probably get a bunch of benefits like bonuses and stock options,
etc. that are not available to the contract workers. They probably have more protections if they
are terminated or laid off whereas the contract workers would be done that day. The really good contract
workers may get offers to work at the company for the long-run.
Outsourcing is done in the public realm, too; my first job after grad school was with a major housing
authority – except it wasn't for them (despite me having a "housingauthority.org" email address). I
worked for a contractor of the housing authority, who paid us shit and treated us like cattle. I lasted
three months.
One area not discussed in this post is municipal outsourcing. What this means in practice is the
loss of organizational memory . assuming that records are not adequately maintained since the "old-timers"
were still around. But with the loss of human memory banks, no new ones (digital?) have taken their
place. Further, when consultants are hired for a specific project, when they have completed that project,
what they have learned as ancillary knowledge is lost cuz the end-product is all that counts, not the
process.
i.e. Rip up the entire street to find where the pipe is because the old public works director
who was replaced with a bright young woman with a degree before he qualified for his pension, got
even and deleted the maps on the software. :-)
Didn't Yves mention this loss of institutional memory in reference to fianancial services, or
was it banks, and their IT?
Further to government outsourcing:
Back a few years my wife and I worked for a school district on the East coast of Canada. The janitorial
service had been outsourced a few years previously, with the former head janitor becoming the main
contractor, who then hired other cleaning staff to work for him. He/she was already being squeezed
to reduce his rates, leading to work not done or his working from 8AM to midnight to save an after-school
employee. So–lower employment overall, all at minimum wage, including the main contractor.
One district had bucked the province-wide trend by keeping its own cleaning staff. Visiting the
schools in that district those few years later, one could see the result, in vastly superior level
of cleanliness, better co-ordination between admin and teaching staff with cleaners, and much better
relations with students as well.
The staff weren't bosses, the cleaners weren't minions, and the students weren't customers. They
were a team.
I don't think there will be a change in this because it's too profitable for the CEOs to strip mine
the companies assets (knowledgeable employees are an asset) for maximum "shareholder value" (always
replace "shareholder value" with "my compensation"). I suppose this will change when all companies are
stripped to the bone and go under. But we now call these "too big to fail" and prop them up with taxpayer
dollars.
We need to change incentives. These might help:
Make corporations really pay taxes so that it makes sense to invest in the company rather than strip
it.
Don't prop up TBTF companies, let them fail so that many small companies can grow.
Stop all the fraud and corruption. Send corrupt CEOs to jail.
Medicare for All would be a boon for businesses, especially the smaller and mid-sized ones.
Herb Kelleher, CEO of Southwest, was once asked where he ranked shareholders vs employees. He replied
employees were first (because if the employees are not happy, then the customers are not happy), customers
(they pay the bills), and shareholders (they buy and sell shares in seconds). If the company is successful,
the shareholders will come. We somehow need to get back to these company values. A successful company
starts with the employees.
This is a pretty ugly development in our history. The 'end of employees' is a very accurate description
of what is going on in our gig economy related to a specific legal contradiction. In the U.S., we've
adopted a vast body of labor laws ( many in response to the Industrial Revolution and Great Depression
) that are primarily designed to protect "employees" from exploitation. Buried deep in our tax law is
a second designation for worker called "independent contractor", defined as a self-employed person providing
services to other businesses that is exempt from most labor laws on the principle that a self-employed
person can't exploit themselves. The key here is labor laws protect 'employees' from 'employer' abuses.
Changing a workers classification from employee to ( self-employed ) contractor, will change an employers
classification to customer, and remove the workers legal protections from exploitation. Labor law protections
include minimum wage and hours, workplace safety and health, wrongful dismissal protections, anti-discrimination
protections, employee benefits security, and worker compensation protections. This contradiction is
allowing many companies to sidestep centuries of laws enacted to stabilize and and protect our society.
Some companies push this power imbalance even further by transferring many of the business costs associated
with their revenue to employee contractors ( see Uber ).
Hopefully when there is enough public outcry, regulators and prosecutors will decide to challenge
these interpretations of existing laws and force businesses back in line regardless of their political
influence.
Incidentally, the slippery logic that removes labor law protections by classifying a worker
as self-employed ( both employer and employee ) might also grant businesses protections from their
workers via consumer protection laws against fraud and unfair practices ( when businesses become
customers of their now self-employed former employees ).
As has been stated several times, sometimes government entities are the worst offenders here. Grover
Norquist & Co. insisted on shrinking the size of government. The obedient elected officials and managers
immediately replaced employees with contractors and could claim that they had indeed reduced the size
of government. Unfortunately the budget probably went up since we now have to provide profit for the
rent extracting contract vendors.
A few years ago I was working for a family of local weekly papers, run on a shoestring (of course)
with pathetic salaries for the tiny staff. At one point, they heard about possibly outsourcing design–layout
of modular pages–to cheap labor in Romania. But when they ran the numbers .our in-house designers were
already cheaper than the Romanians!
Second point: At my current magazine I am one of just two full-time staffers on the edit side. Our
copy-editor/proofreader is paid on an hourly basis, and works off-site. Our designer works on a monthly
retainer, off-site. And so on.
That makes the relationship between us and our workers competitive and antagonistic: They try to
do the least amount of work, and we try to pay the least amount of money. So when the publisher wants
to be "innovative" or try something different, the designer resists. He doesn't want to spend any more
time on us than he normally does. So we don't do anything well, we get by with just good enough.
Point 3 – institutional knowledge: One of our key competitive advantages has been/is being eroded
because there are things we haven't done in two years due to turnover. When I arrived and took up one
such project, hugely important to the company's bottom line, no one could tell me how it was done. Everyone
who had been involved in it was gone. We've now spent several months reinventing this particular wheel.
But the publisher doesn't see that as money. He only sees money as money.
BTW – the financial sector is ripe for this. Automation is taking over many positions and people
in active investing is getting slashed big-time. Ironically, places like Vanguard may actually be some
of the last bastions of actual employees.
The problem with these short term contract jobs are immense. Employees that don't have a steady income
have difficulty getting loans for cars or homes. They certainly have less protection too. Our son worked
for SKY TV as a part time employee through a temp agency for 3 years, working 40 hour weeks. But when
an unstable full time employee assaulted him, in front or several witnesses, he was the one fired on
the spot without explanation. He was a non-person. The temp agency didn't want to get involved for fear
of losing their contract. With no union, no rights and little money, there was little he could do. They
knew he couldn't afford a lawyer and involving the police wouldn't get his job back. This goes on all
the time now. 20 years ago would have been unthinkable. I see a revolution coming, in many countries
Given the long evident fact that our corporate owners and their servants in government will not do
a bloody thing to make life better for us, what can we do? As a first step toward any solution, we need
to recognize that nothing is possible within the narrow boundaries of our political and economic system.
What you describe as a first step seems a lot like a claim of inevitable failure. Rather than
expect failure, I recommend as a first step that we try to block a few of Trump's predatory cabinet
nominations. Andrew Puzder, the nominee to head the Labor Department, and Steven Mnuchin, nominated
to be the Secretary of the Treasury, seem to be very relevant to the scope of this article. Also
Tom Price, nominated to be the Secretary of Health and Human Services. Tell your Senators that you
don't want them to be confirmed. It's easy, although you might need to make a few extra phone calls,
because the Congressional phone lines are often busy these days.
I ask, Why can't banks be fully automated? You wouldn't need CEOs and COOs and CFOs in banks because
IT can do all those jobs automatically. Then we would find out that we only need ONE bank–the central
bank and, voila, the banks no longer can create money by making loans. (I'm sure there is a weak point
in this argument!!!) However, I can see something like this happening in the future if only we separate
investment banking from commercial banking.
Marx saw capitalism as an endless class struggle between the bourgeoisie and the proletariat.
He wasn’t far wrong.
1920s – high inequality, high banker pay, low taxes for the wealthy, robber barons, reckless bankers,
globalisation phase (bourgeoisie in the ascendency)
1970s â€" low inequality, worker and union power, high taxes on the wealthy (proletariat in the ascendency)
(probably more true in the UK than the US)
2000s â€" high inequality, high banker pay, low taxes on the wealthy, robber CEOs, reckless bankers,
globalisation phase (bourgeoisie in the ascendency)
The pendulum swings back and forth and always swings too far in both directions.
If the human race could take a more sensible, big picture view they might see it as a balance between
the supply side (bourgeoisie) and the demand side (proletariat).
The neoliberal era has been one where a total ignorance of debt has held sway.
Redistributive capitalism was removed to be replaced with a capitalism where debt based consumption
has become the norm. without a single mainstream economist realising the problem.
The world is maxing out on debt, this system is set to fail due to a lack of demand. The Bourgoisie
have been in the ascendency and made their usual mistake.
“The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining
to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably
down the path to his own destructionâ€.
Keynes thought income was just as important as profit, income looks after the demand side of the
equation and profit looks after the supply side.
He has the idea of balance.
Just maximising profit â€" The Bourgeoisie looking after their own short term, self interest with
no thought of the longer term.
1) Money at the top is mainly investment capital as those at the top can already meet every need,
want or whim. It is supply side capital.
2) Money at bottom is mainly consumption capital and it will be spent on goods and services. It is
demand side capital.
You need to keep the balance.
Too much capital at the bottom and inflation roars away.
Too much capital at the top and there is no where sensible to invest and the Bourgeoisie indulge
in rampant speculation leading to the inevitable Wall Street Crash, 1929 and 2008.
Today’s negative yield investments?
Too much capital at the top, no one wants it and you have to pay people to take it off your hands.
"You need to keep the balance." The post war era was balance, that was the middle of the pendulum
swing, we have never seen you're next sentence:
"Too much capital at the bottom and inflation roars away." When? Name one instance outside of
extraordinary political situations like weimar germany and zimbabwe where this has occurred?
Inflation is the boogey man that the elite throw around to scare us into submission. They don't
care when its inflation of house prices, they don't care when its inflation of healthcare costs,
education costs, etc. etc. But they damn sure start sweating a lot when its the cost of labor that
goes up. Shocker.
"Gate Gourmet had once been part of British Airways. And passengers blamed the airline."
You can transfer expenses, you can transfer legal and regulatory liability risk, you can transfer
financial risk, but it is virtually impossible to transfer reputational risk. Companies who think they
can do so (or ignore the fact) do so at their own peril.
My d-i-l, a research professional, has survived five down-sizings, assuming an additional work load
each time. The last time she also got a small promotion (well, you'd think they'd give her something
positive after all this). To myself I thought, they're going to wear this woman out till she has nothing
left to give and dump her.
It's worse. The corporation (company is a concept from
my
early working days) just announced
that everyone would have to bid for their projects(jobs). What this means of course is "how much are
you willing to give?" not to mention pitting one employee against another.
I "work" (temp/contract/no benefits) at a large multinational electronics company in cust service
and have seen this first hand. In response to a couple years of dropping profits, they outsourced the
entire department (couple hundred employees) to the Philippines. They cut full time employees, replace
them with temps for half the pay, because people will do it, and we live in desperate times with no
bargaining power.
As someone mentioned, its a negative feedback loop, less demand, less employment, less demand, until
the whole world is greece. We won't make it through another world war, the world is too globalized,
too connected, too advanced technologically. We need a relatively peaceful populist revolution – which
we seem to be seeing the first real signs of – or our species is done for.. and the sad part is I'm
not even exaggerating.
One point you missed is that a company cannot manage, let alone write a contract very well unless
it has sufficient expertise on staff. It is not sufficient to hire a consultant unless that arrangement
is more or less permanent. Too many things can go wrong, as they often do even with competent staff
when projects are complex or innovative.
"... Cross posted from the Institute for New Economic Thinking website ..."
"... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
"... no sh*t, Sherlock ..."
"... Wealth and Democracy ..."
"... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
"... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
"... What socio-econ OU ..."
"... Cross posted from the Institute for New Economic Thinking website ..."
"... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
"... no sh*t, Sherlock ..."
"... Wealth and Democracy ..."
"... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
"... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
"... What socio-econ OUTCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
"... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
"... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
"... TCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
"... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
"... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
Posted on
February 4, 2017
by
Yves Smith
Yves here. Both economists and the press do such a good job of selling the idea
that inequality is the fault of those who come out on the short end of the
stick that academics need to develop empirical evidence to prove what ought to
be intuitively obvious.
The fact that most of the fruits of US economic growth have not been
shared with the lower-middle and working class is accepted across the
political spectrum in America. But that inequality is often treated as a
somehow inevitable consequence of globalization and technological change.
That view is contradicted by the comparison of income growth and
distribution statistics between the US and three others rich countries,
France, Norway and the UK - according to new research by Max Roser and
Stefan Thewissen of the Institute for New Economic Thinking at Oxford.
Writing in Vox on the database they've constructed, Roser and Thewissen
note:
"We compare the evolution of the income an individual needs to be right
at the 10th percentile of the income distribution to the evolution of the
income of an individual at the 90th percentile. We call these two groups the
'poor' and the 'rich.' We can then look at how much incomes grew for the
poor and the rich in absolute terms as well as relative to each other - and
thereby assess the extent to which growth was widely shared. We measure
income after taxes and transfers, and adjust for differences in prices over
time and across countries using inflation and purchasing power information.
Our database can be accessed online, with more information on our exact
measure and data for other countries."
The US performs poorly by comparison to these countries, for reasons that
may have more to do with structure, institutions and policy. Roser and
Thewissen conclude:
"The differences we have identified across countries and time imply that
increased globalization and technological change cannot be blamed as sole
causes for rising inequality. Those forces work across borders and should
affect all countries. The fact that other developed countries have been able
to share the benefits of these market forces suggests that policy choices on
the national level play a central role for boosting living standards.
Policies can make a difference not just in growth levels, but also in who
gets the benefits of that growth."
The intuitively obvious, should be taken as axiomatic. Like two points
determine a single line. When you start out from an unequal position (not like
at the start of a foot race) it is unclear who to blame, for the one person
who crosses the finish line first vs the losers. And much of life is "first
across the finish line". Also since in this case, the winner of the last race,
gets an advantage on the next starting line the unequal advantage tends to
accumulate. Life is unfair. The point is to maintain the status quo, statically
and dynamically. Those who have advantages today, continue to have them, as
white collar US workers and even blue collar US workers used to. The previous
winners continue to win these unequal contests, but the number of happy workers
gets fewer and fewer. This is why Trump voters the benefits of inequality are
now being shared less equally ;-) The purpose of government is to benefit the
status quo. Therefore policy doesn't offer substantive way out. Change will
occur but only when the current status quo maintenance system fails.
Conclusion: like the game of Musical Chairs there is no change until the
music stops, and someone different can't find a chair to sit in. But it is less
fun in real life.
Unfortunately many in the current generation are content to play the
little pig, in Charlotte's Web. They forget where McDonald's McRib comes
from. Again, children's culture is illustrative and simplified.
I wouldn't underestimate "many in the current generation" –
especially among those who don't have the "divided baggage" of the
generations that preceded them. Due to purposely recirculated
historical circumstances aligned with modern "evolution," it may not
be as easy for power to continue to "manipulate and control."
In this fear-mongering film, conservatives like Gingrich put a
spin on the power of the "elite" destroying the middle class in a
revisionist approach (although they are quick to point out that
both parties are captured by global corporations). The future:
austerity, deregulation and 20 years of chaos (with probable war)
ahead of us.
The film revolves around the Strauss-Howe generational theory.
https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
Steve Bannon, Chief Strategist and Senior Counselor to
President Trump is a prominent proponent of the theory. As a
documentary filmmaker Bannon discussed the details of Strauss-Howe
generational theory in Generation Zero. According to historian
David Kaiser, who was consulted for the film, Generation Zero
"focused on the key aspect of their theory, the idea that every 80
years American history has been marked by a crisis, or 'fourth
turning', that destroyed an old order and created a new one".
Kaiser said Bannon "is very familiar with Strauss and Howe's theory
of crisis, and has been thinking about how to use it to achieve
particular goals for quite a while." A February 2017 article from
Business Insider titled: Steve Bannon's obsession with a dark
theory of history should be worrisome commented "Bannon seems to be
trying to bring about the 'Fourth Turning'."
When I was first exposed to Strauss and Howe I began thinking
how their ideas explained the histories of other countries as
well, and during our interview, I mentioned that crises in
countries like France in the 1790s and Russia after 1917 had led
to reigns of terror. Bannon included those remarks in the final
cut of Generation Zero.
A second, more alarming, interaction did not show up in the
film. Bannon had clearly thought a long time both about the
domestic potential and the foreign policy implications of
Strauss and Howe. More than once during our interview, he
pointed out that each of the three preceding crises had involved
a great war, and those conflicts had increased in scope from the
American Revolution through the Civil War to the Second World
War. He expected a new and even bigger war as part of the
current crisis, and he did not seem at all fazed by the
prospect.
I did not agree, and said so. But, knowing that the history of
international conflict was my own specialty, he repeatedly
pressed me to say we could expect a conflict at least as big as
the Second World War in the near or medium term. I refused.
Apocalyptic rhetoric and apocalyptic thinking flourish during
crisis periods. This represents perhaps the biggest danger of
the Trump presidency, and one that will bear watching from all
concerned citizens in the months and years ahead.
Thanks for the information. I'm aware of the madman's "movie"
and his authoritarian ideology. He and his commander-of-thieves
will continue to unravel right before our eyes. Many lives will
continue to be severely impacted by these hateful, selfish,
abusive throwbacks from "central casting."
Every day there is a race you have to run. For the sake of discussion,
let's call it a 100 yard race.
The participants are called and then evaluated by the judges. Starting
points for the race are then determined. If you are particularly comely, you
are given an advantage: that is, your starting point is moved up depending
on the judges. If you have a personality that people find attractive, you
are given further yards. If you happen to have had great success in school,
you are awarded so many yards because of your academic record. If you happen
to be good looking and personable, the academic success yards are added onto
your already determined starting point.
Then the quality and reputation of your educational institution is
evaluated and you are given further yards to determine starting points with
certain schools worth a better starting position. And even the type of
training at the institution is evaluated and further yards given.
Finally the judges add your total experiences – including your finishing
position in previous races – advanced degrees, and connections and further
yards are added.
So when the gun sounds, the person without the advantages strives as hard
as they can but they cannot win the race because some people only have to
simply step over the finish line.
And even more troubling some people are moved behind the starting line
because they could not even muster the necessary accomplishments to reach
the starting line: drop outs from school, people who have been convicted of
crimes and the rest. The worse the offense, the further you are moved behind
the starting line.
Every day this continues and those striving to win – even running faster
and harder than their competitors – are simply unable to do so because the
rules are such that winning is not even a consideration when the race is
rigged.
The factors are certainly at work in inequality. Some of those factors
can either be mitigated or compensated for by the individual and/or the
social system.
There are other structural factors that influence inequality. Family
connections, inherited wealth, and other forms of social capital that can
make advancement easier is one. Savings and investment patterns that can
be engaged in to varying degrees depending on just how much surplus
income one has is another.
The social and political system in the US generally favors vigorous
competition, private self-dealing, and asymmetric information.
Individuals who learn to navigate these factors can prosper, while those
who either can't or don't want to can suffer significant disadvantages in
outcomes. The influence of these structural factors in any social system
influences the degree of income/wealth stratification.
In my own family, many of the starting social factors are fairly equal
among the individuals. Even though my various relatives have not
necessarily made "bad" choices in the moral sense, their outcomes have
been vastly different. The degree to which they have chosen to engagein
income/wealth maximization has generally been a large factor. In that
sense, the game is rigged away from living what many consider a humane
life.
You mean people actually got paid to research and write stuff like this? You
simply have to look at the (re)distribution policies of the countries concerned
– and there are substantial differences between the three of them, by the way.
Wouldn't a much more interesting question be "By what mechanism does
globalization necessarily increase inequality, and how does it work precisely
in a number of contrasted cases"? But then you might get the wrong answer.
No kidding – kind of amazing that people get paid good money to restate
the obvious, but using sesquipedalian language just to make it more
difficult to understand.
Inequality is caused by one group not having as much money as another.
Money is simply a tool created by human beings. Much like a hammer, human
beings could use it to build houses for everyone or to bash others about the
head. We humans seem to prefer the latter use.
The people paid to prove the obvious are far outnumbered by those paid to
disprove it. We need the former because of the latter.
On the other hand, there are many cases where the obvious turned out to be
wrong when it was looked at carefully. More research needed!
We're in a world where politicians get paid to lie about these obvious
things and legislate based on those lies, and businesses make their profits
off the lies, so I can't get too exercised when someone gets paid to point
out the lies.
"Forces." Really? "Globalization" and "technological change" are things
humans do for human reasons. To treat them as "forces" somehow exogenous to
human choices is self-evidently fallacious. It's precisely the same logic that
says the King is the King cause God likes him best.
They're not "forces." They are heuristics. And as heuristics, they are
pretty lousy unless you parse them quite a bit. Obama's 1 trillion dollar
investment in nukes creates "technological change." The destruction of local
agricultural techniques and knowledge is "technological change." A kindle is
"technological change." Keyword searches readily available to academic
researchers was a big "technological change."
I'm assuming what they mean by "technological change" here is the sort that
allows us to collectively make more stuff with less work. God forbid anyone
spell that out though. Because "hey, guess what: you have to work more for less
because we can now make more stuff with less work," would quickly lead to the
violent demise of economists and rich people. (more to say on "globalization"
but this post is already way longer than intended.)
Germany should have been included in the study. German manufacturing is far
more technologically advanced than manufacturing in the US, yet Germany manages
to maintain high employment in that sector, probably because the companies
invest in worker training and feel some obligation toward labor.
There's a structural reason for this, with labor having powerful
representation on German corporate boards and smaller companies being owned by
families instead of faceless shareholders, with the families' long-term
interests naturally more in alignment with those of their employees.
Actually, I thought the inclusion of France and the UK was a bit strange,
as well. Inequality in both countries has been increasingly massively in
recent years. One Thomas Piketty even wrote something on the topic, if I'm
not mistaken. Japan would have been a much better example.
I think it kind of makes the point, if even a country that isn't
exactly known for egalitarianism, like the UK, is doing better than the
U.S. it kind of shows how extreme on the scale the U.S. is.
Contrary to elite owned and serving mass media claims, the trick that
created the German economic miracle is no mystery; it was, and IS, their
banking system.
In Germany more than 70% of all banking is done by "municipally owned
banks"!!!
A situation that the elites – masters of the universe -have been working day
and night to drastically alter so that their "too big to fail" minion zombie
banks can take complete AND total control of the economy, as they have in
most of the developed world except North Dakota, Canada (Canada owns the
Bank of Canada – the Finance Minister holds all the shares on behalf of all
Canadians), and Switzerland (Switzerland has Cantonal {municipally or
provincially} owned banks) – all three countries, like the German
municipally owned banks, are under attack by the elite serving bureaucrats
in the IMF and the U.S. Federal Reserve; all of whom are owned by, and
minions of, Wall Street; and most importantly the corporate bought and sold
world's university economics departments – co-opted to right agenda faux
economic B.S.
The U.S. Federal Reserve now donates more money to universities worldwide
than all of the rest of the donors combined!?! The proviso on these
donations is that they only hire economics profs who have been published in
one of the 37 journals published by the U.S. Federal Reserve – and we know
what kind of right agenda 'fascist' mumbo-jumbo these minion economists are
dedicated to serving up in order to get published by the U.S. Fed!!!
So what you say!! Well here's so what!
If you are in any other developed country than Germany and you have a great
idea/product and require a one million dollar loan to build a factory and
set up production – here's what happens to you. Your local banks will never
lend you that money, so you have to go to the criminal Big Banks which will
also never lend you the money you need, which means you will have to sell
your idea/product at pennies on the dollar to one of their huge corporate
clients, who will offshore production to a corrupted third world country
where workers get paid pennies an hour and unions are considered a criminal
enterprise. Leaving you, the creator of the product or service with pennies
on the dollar; and leaving your local economy with zero economic growth and
no well paid local employment opportunities. The corporate buyer of your
technology/product/idea may well just kill your product because it is better
than the (inferior) one they are currently making bags of money selling –
for which they have just eliminated your innovative and superior competitive
product.
If you are in Germany however the story is far different. In Germany you
would go to your local municipally owned bank which is only too happy to
give you the one million dollars you need to set up production (locally
providing employment and contributing to local economic prosperity).
This is the basis for the strength of the German economy and the reason for
the so called ":German economic miracle?"!
It is described as a "miracle" not because we have no idea how it happened,
rather because the elites who own more than 80% of all corporate shares need
to confuse us plebs they want to economically and politically crush!
American wealth inequality is a political problem? Well,
no sh*t,
Sherlock
.
Kevin Phillips wrote about this phenomenon a decade ago in his wonderful
book
Wealth and Democracy
. Between 1920 and 1980, American plutocrats
had been placed in fear by the Bolshevik revolution, humbled by the Great
Depression, and shamed by the Second World War. Greed was in check. Then they
died-off and left their wealth to a new generation more interested in emulating
Mick Jagger than Dwight D. Eisenhower. Ronnie Reagan was their Hollywood pal,
who cut estate and coupon-clipping taxes so that they could party like rock
stars.
Crass punks like Donald Trump and the Kochs are the scions of inherited
wealth and Studio 54. They could never have made it on their own, on their own
talents, and it is in their class interest to destroy any sort of meritocracy.
They have used materialism and greed to buy the political class.
Look up Geert Hofstede's work on "power distance," which is the extent to
which a nation accepts inequality.
According to Hofstede, countries have different "tastes" or preferences for
inequality. For example, the Middle East, parts of S America, India, and other
parts of Asia have a much bigger "taste" for inequality compared to, say, the
Scandinavian countries, which have the lowest.
I would guess that differences in preferences for inequality between
countries go back to a nation's history, and maybe other hard-to-pin down
forces and factors.
The US, according to Hofstede's work, is at the middle point, or a little
lower, as to taste for inequality. However, reading about the recent Gini index
leads me to believe that either our preference for inequality is changing
[probably not the case, given Trump], or our history is outrunning our
preferences. In other words, we may be getting more inequality than we like.
By the way, Hofstede assumes that power distance preference is a fairly
durable characteristic of a nation.
Preference?? Yes, I'm sure the mid east loves inequality, which is why
they are known for choosing dictators who quash uprisings as their leaders.
And how exactly would I choose egalitarianism here in the US? I can vote for
Wall Street and Holly Wood or Wall Street and Exxon Mobil. Which one is the
egalitarian one?
However, reading about the recent Gini index leads me to believe that
either our preference for inequality is changing [probably not the case,
given Trump], or our history is outrunning our preferences.
"
What about "power distance" (extent to which a nation accepts inequality)
interactions with "distance to power" extent to which a nation influences
the powerful.
I've been reading Robert J. Gordon's book, 'The Rise and Fall of American
Growth.' Gordon would say that American labor did well from 1870-1970 because
of the innovations that drove the economy increased everyone's productivity and
the value of their work. Since 1970, productivity has slowed down. It rose
again during the decade of the '90s but mostly for knowledge workers, thanks to
the internet, spreadsheets, etcetera, but now has continued to slow. That was a
recipe for income inequality, and for wealth inequality as well, since the rise
of digital industries has increased property values on the coasts and in select
inland cities.
Slowing productivity also increased wealth inequality by facilitating the
decline of interest rates. This helps the haves, since their assets are
suddenly more valuable.
this guy argues that productivity has been decoupled from compensation,
and that has driven the rise of inequality.
off topic, but the krugman review of the book contained the interesting
fact that, during the 1880's, wall street was 7 feet deep in manure in some
places.
Of course inequality is a political choice. Chosen by the oligarchs who buy
the politicians.
Just like every mainstream economist is choosing to make millions suffer and
die every day because excepting MMT would bruise their ego's. That is a choice
too.
I think that inequality is not a political choice directly but a consequence
of deregulation or "do nothing" policy. Reducing inequality is a policy choice.
They soon made the most of the opportunity and removed themselves from any
hard work to concentrate on "spiritual matters", i.e. any hocus-pocus they
could come up with to elevate them from the masses, e.g. rituals, fertility
rights, offering to the gods . etc and to turn the initially small tributes,
into extracting all the surplus created by the hard work of the rest.
The elites became the representatives of the gods
and they were responsible for the bounty of the earth and the harvests. As long
as all the surplus was handed over, all would be well.
Later they came up with money.
We pay you to do the work and you give it back to us when you buy things,
you live a bare subsistence existence and we take the rest.
A bare subsistence existence ensured the workers didn't die and could
reproduce, why give them anymore? The vile maxim of the masters of mankind.
Basic capitalism was how it all started in the 18th and 19th Centuries, the
poor lived in squalor and the rich lived in luxury, the same as it had always
been.
Only organised labour movements got those at the bottom a larger slice of
the pie, basic capitalism gives nothing to the people who do the work apart
from a bare subsistence existence.
The wealthy decided they needed to do away with organised labour movements
and the welfare state; it was interfering with the natural order where they
extract all the surplus.
2017 – World's eight richest people have same wealth as poorest 50%
Nearly there.
They need a bit more fine tuning at Davos.
Some of the world's workers are not living a bare subsistence existence.
Francis Fukuyama talked of the "end of history" and "liberal democracy".
Liberal democracy was the bringing together of two mutually exclusive ideas.
Economic liberalism – that enriches the few and impoverishes the many.
Democracy – that requires the support of the majority.
Trying to bring two mutually exclusive ideas together just doesn't work.
The ideas of "Economic Liberalism" came from Milton Freidman and the
University of Chicago. It was so radical they first tried it in a military
dictatorship in Chile, it wouldn't be compatible with democracy. It took death
squads, torture and terror to keep it in place, there was an ethnic cleansing
of anyone who still showed signs of any left wing thinking.
It was tried in a few other places in South America using similar
techniques. It then did succeed in a democracy but only by tricking the people
into thinking they were voting for something else, severe oppression was needed
when they found out what they were getting.
It brings extreme inequality and widespread poverty everywhere it's tested,
they decide it's a system that should be rolled out globally. It's just what
they are looking for.
Would a for-profit chain of local newspapers whose business model and
advertising is built on serving the Portland Business Alliance and Chamber of
Commerce interests hire or keep on staff any kind of investigative journalistic
team or even an individual columnist\calumnist like recently deceased
VILLAGE VOICE
early 1980's TRUMP SWAMP WHISTLE-BLOWER
WAYNE BARRET (RIP)?
https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html
Yves here. Both economists and the press do such a good
job of selling the idea that inequality is the fault of
those who come out on the short end of the stick that
academics need to develop empirical evidence to prove what
ought to be intuitively obvious.
The fact that most of the fruits of US economic
growth have not been shared with the lower-middle and
working class is accepted across the political spectrum
in America. But that inequality is often treated as a
somehow inevitable consequence of globalization and
technological change. That view is contradicted by the
comparison of income growth and distribution statistics
between the US and three others rich countries, France,
Norway and the UK - according to new research by Max
Roser and Stefan Thewissen of the Institute for New
Economic Thinking at Oxford. Writing in Vox on the
database they've constructed, Roser and Thewissen note:
"We compare the evolution of the income an
individual needs to be right at the 10th percentile of
the income distribution to the evolution of the income
of an individual at the 90th percentile. We call these
two groups the 'poor' and the 'rich.' We can then look
at how much incomes grew for the poor and the rich in
absolute terms as well as relative to each other - and
thereby assess the extent to which growth was widely
shared. We measure income after taxes and transfers,
and adjust for differences in prices over time and
across countries using inflation and purchasing power
information. Our database can be accessed online, with
more information on our exact measure and data for
other countries."
The US performs poorly by comparison to these
countries, for reasons that may have more to do with
structure, institutions and policy. Roser and Thewissen
conclude:
"The differences we have identified across countries
and time imply that increased globalization and
technological change cannot be blamed as sole causes
for rising inequality. Those forces work across borders
and should affect all countries. The fact that other
developed countries have been able to share the
benefits of these market forces suggests that policy
choices on the national level play a central role for
boosting living standards. Policies can make a
difference not just in growth levels, but also in who
gets the benefits of that growth."
The intuitively obvious, should be taken as axiomatic.
Like two points determine a single line. When you start
out from an unequal position (not like at the start of a
foot race) it is unclear who to blame, for the one
person who crosses the finish line first vs the losers.
And much of life is "first across the finish line". Also
since in this case, the winner of the last race, gets an
advantage on the next starting line the unequal
advantage tends to accumulate. Life is unfair. The point
is to maintain the status quo, statically and dynamically.
Those who have advantages today, continue to have them, as
white collar US workers and even blue collar US workers
used to. The previous winners continue to win these
unequal contests, but the number of happy workers gets
fewer and fewer. This is why Trump voters the benefits
of inequality are now being shared less equally ;-) The
purpose of government is to benefit the status quo.
Therefore policy doesn't offer substantive way out. Change
will occur but only when the current status quo
maintenance system fails. Conclusion: like the game of
Musical Chairs there is no change until the music stops,
and someone different can't find a chair to sit in. But it
is less fun in real life.
Unfortunately many in the current generation are
content to play the little pig, in Charlotte's Web.
They forget where McDonald's McRib comes from.
Again, children's culture is illustrative and
simplified.
I wouldn't underestimate "many in the current
generation" – especially among those who don't
have the "divided baggage" of the generations
that preceded them. Due to purposely recirculated
historical circumstances aligned with modern
"evolution," it may not be as easy for power to
continue to "manipulate and control."
In this fear-mongering film, conservatives
like Gingrich put a spin on the power of the
"elite" destroying the middle class in a
revisionist approach (although they are quick
to point out that both parties are captured by
global corporations). The future: austerity,
deregulation and 20 years of chaos (with
probable war) ahead of us.
The film revolves around the Strauss-Howe
generational theory.
https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
Steve Bannon, Chief Strategist and Senior
Counselor to President Trump is a prominent
proponent of the theory. As a documentary
filmmaker Bannon discussed the details of
Strauss-Howe generational theory in Generation
Zero. According to historian David Kaiser, who
was consulted for the film, Generation Zero
"focused on the key aspect of their theory,
the idea that every 80 years American history
has been marked by a crisis, or 'fourth
turning', that destroyed an old order and
created a new one". Kaiser said Bannon "is
very familiar with Strauss and Howe's theory
of crisis, and has been thinking about how to
use it to achieve particular goals for quite a
while." A February 2017 article from Business
Insider titled: Steve Bannon's obsession with
a dark theory of history should be worrisome
commented "Bannon seems to be trying to bring
about the 'Fourth Turning'."
When I was first exposed to Strauss and
Howe I began thinking how their ideas
explained the histories of other countries
as well, and during our interview, I
mentioned that crises in countries like
France in the 1790s and Russia after 1917
had led to reigns of terror. Bannon
included those remarks in the final cut of
Generation Zero.
A second, more alarming, interaction did
not show up in the film. Bannon had clearly
thought a long time both about the domestic
potential and the foreign policy
implications of Strauss and Howe. More than
once during our interview, he pointed out
that each of the three preceding crises had
involved a great war, and those conflicts
had increased in scope from the American
Revolution through the Civil War to the
Second World War. He expected a new and
even bigger war as part of the current
crisis, and he did not seem at all fazed by
the prospect.
I did not agree, and said so. But, knowing
that the history of international conflict
was my own specialty, he repeatedly pressed
me to say we could expect a conflict at
least as big as the Second World War in the
near or medium term. I refused.
Apocalyptic rhetoric and apocalyptic
thinking flourish during crisis periods.
This represents perhaps the biggest danger
of the Trump presidency, and one that will
bear watching from all concerned citizens
in the months and years ahead.
Thanks for the information. I'm aware of
the madman's "movie" and his authoritarian
ideology. He and his commander-of-thieves
will continue to unravel right before our
eyes. Many lives will continue to be
severely impacted by these hateful,
selfish, abusive throwbacks from "central
casting."
Every day there is a race you have to run. For the
sake of discussion, let's call it a 100 yard race.
The participants are called and then evaluated by
the judges. Starting points for the race are then
determined. If you are particularly comely, you are
given an advantage: that is, your starting point is
moved up depending on the judges. If you have a
personality that people find attractive, you are given
further yards. If you happen to have had great success
in school, you are awarded so many yards because of
your academic record. If you happen to be good looking
and personable, the academic success yards are added
onto your already determined starting point.
Then the quality and reputation of your educational
institution is evaluated and you are given further
yards to determine starting points with certain schools
worth a better starting position. And even the type of
training at the institution is evaluated and further
yards given.
Finally the judges add your total experiences –
including your finishing position in previous races –
advanced degrees, and connections and further yards are
added.
So when the gun sounds, the person without the
advantages strives as hard as they can but they cannot
win the race because some people only have to simply
step over the finish line.
And even more troubling some people are moved behind
the starting line because they could not even muster
the necessary accomplishments to reach the starting
line: drop outs from school, people who have been
convicted of crimes and the rest. The worse the
offense, the further you are moved behind the starting
line.
Every day this continues and those striving to win –
even running faster and harder than their competitors –
are simply unable to do so because the rules are such
that winning is not even a consideration when the race
is rigged.
The factors are certainly at work in inequality.
Some of those factors can either be mitigated or
compensated for by the individual and/or the social
system.
There are other structural factors that influence
inequality. Family connections, inherited wealth,
and other forms of social capital that can make
advancement easier is one. Savings and investment
patterns that can be engaged in to varying degrees
depending on just how much surplus income one has is
another.
The social and political system in the US
generally favors vigorous competition, private
self-dealing, and asymmetric information.
Individuals who learn to navigate these factors can
prosper, while those who either can't or don't want
to can suffer significant disadvantages in outcomes.
The influence of these structural factors in any
social system influences the degree of income/wealth
stratification.
In my own family, many of the starting social
factors are fairly equal among the individuals. Even
though my various relatives have not necessarily
made "bad" choices in the moral sense, their
outcomes have been vastly different. The degree to
which they have chosen to engagein income/wealth
maximization has generally been a large factor. In
that sense, the game is rigged away from living what
many consider a humane life.
You mean people actually got paid to research and write
stuff like this? You simply have to look at the
(re)distribution policies of the countries concerned – and
there are substantial differences between the three of
them, by the way.
Wouldn't a much more interesting question be "By what
mechanism does globalization necessarily increase
inequality, and how does it work precisely in a number of
contrasted cases"? But then you might get the wrong
answer.
No kidding – kind of amazing that people get paid
good money to restate the obvious, but using
sesquipedalian language just to make it more difficult
to understand.
Inequality is caused by one group not having as much
money as another. Money is simply a tool created by
human beings. Much like a hammer, human beings could
use it to build houses for everyone or to bash others
about the head. We humans seem to prefer the latter
use.
The people paid to prove the obvious are far
outnumbered by those paid to disprove it. We need the
former because of the latter.
On the other hand, there are many cases where the
obvious turned out to be wrong when it was looked at
carefully. More research needed!
We're in a world where politicians get paid to lie
about these obvious things and legislate based on those
lies, and businesses make their profits off the lies,
so I can't get too exercised when someone gets paid to
point out the lies.
"Forces." Really? "Globalization" and "technological
change" are things humans do for human reasons. To treat
them as "forces" somehow exogenous to human choices is
self-evidently fallacious. It's precisely the same logic
that says the King is the King cause God likes him best.
They're not "forces." They are heuristics. And as
heuristics, they are pretty lousy unless you parse them
quite a bit. Obama's 1 trillion dollar investment in nukes
creates "technological change." The destruction of local
agricultural techniques and knowledge is "technological
change." A kindle is "technological change." Keyword
searches readily available to academic researchers was a
big "technological change."
I'm assuming what they mean by "technological change"
here is the sort that allows us to collectively make more
stuff with less work. God forbid anyone spell that out
though. Because "hey, guess what: you have to work more
for less because we can now make more stuff with less
work," would quickly lead to the violent demise of
economists and rich people. (more to say on
"globalization" but this post is already way longer than
intended.)
Germany should have been included in the study. German
manufacturing is far more technologically advanced than
manufacturing in the US, yet Germany manages to maintain
high employment in that sector, probably because the
companies invest in worker training and feel some
obligation toward labor.
There's a structural reason for this, with labor having
powerful representation on German corporate boards and
smaller companies being owned by families instead of
faceless shareholders, with the families' long-term
interests naturally more in alignment with those of their
employees.
Actually, I thought the inclusion of France and the
UK was a bit strange, as well. Inequality in both
countries has been increasingly massively in recent
years. One Thomas Piketty even wrote something on the
topic, if I'm not mistaken. Japan would have been a
much better example.
I think it kind of makes the point, if even a
country that isn't exactly known for egalitarianism,
like the UK, is doing better than the U.S. it kind
of shows how extreme on the scale the U.S. is.
Contrary to elite owned and serving mass media
claims, the trick that created the German economic
miracle is no mystery; it was, and IS, their banking
system.
In Germany more than 70% of all banking is done by
"municipally owned banks"!!!
A situation that the elites – masters of the universe
-have been working day and night to drastically alter
so that their "too big to fail" minion zombie banks can
take complete AND total control of the economy, as they
have in most of the developed world except North
Dakota, Canada (Canada owns the Bank of Canada – the
Finance Minister holds all the shares on behalf of all
Canadians), and Switzerland (Switzerland has Cantonal
{municipally or provincially} owned banks) – all three
countries, like the German municipally owned banks, are
under attack by the elite serving bureaucrats in the
IMF and the U.S. Federal Reserve; all of whom are owned
by, and minions of, Wall Street; and most importantly
the corporate bought and sold world's university
economics departments – co-opted to right agenda faux
economic B.S.
The U.S. Federal Reserve now donates more money to
universities worldwide than all of the rest of the
donors combined!?! The proviso on these donations is
that they only hire economics profs who have been
published in one of the 37 journals published by the
U.S. Federal Reserve – and we know what kind of right
agenda 'fascist' mumbo-jumbo these minion economists
are dedicated to serving up in order to get published
by the U.S. Fed!!!
So what you say!! Well here's so what!
If you are in any other developed country than Germany
and you have a great idea/product and require a one
million dollar loan to build a factory and set up
production – here's what happens to you. Your local
banks will never lend you that money, so you have to go
to the criminal Big Banks which will also never lend
you the money you need, which means you will have to
sell your idea/product at pennies on the dollar to one
of their huge corporate clients, who will offshore
production to a corrupted third world country where
workers get paid pennies an hour and unions are
considered a criminal enterprise. Leaving you, the
creator of the product or service with pennies on the
dollar; and leaving your local economy with zero
economic growth and no well paid local employment
opportunities. The corporate buyer of your
technology/product/idea may well just kill your product
because it is better than the (inferior) one they are
currently making bags of money selling – for which they
have just eliminated your innovative and superior
competitive product.
If you are in Germany however the story is far
different. In Germany you would go to your local
municipally owned bank which is only too happy to give
you the one million dollars you need to set up
production (locally providing employment and
contributing to local economic prosperity).
This is the basis for the strength of the German
economy and the reason for the so called ":German
economic miracle?"!
It is described as a "miracle" not because we have no
idea how it happened, rather because the elites who own
more than 80% of all corporate shares need to confuse
us plebs they want to economically and politically
crush!
American wealth inequality is a political problem?
Well,
no sh*t, Sherlock
.
Kevin Phillips wrote about this phenomenon a decade ago
in his wonderful book
Wealth and Democracy
.
Between 1920 and 1980, American plutocrats had been placed
in fear by the Bolshevik revolution, humbled by the Great
Depression, and shamed by the Second World War. Greed was
in check. Then they died-off and left their wealth to a
new generation more interested in emulating Mick Jagger
than Dwight D. Eisenhower. Ronnie Reagan was their
Hollywood pal, who cut estate and coupon-clipping taxes so
that they could party like rock stars.
Crass punks like Donald Trump and the Kochs are the
scions of inherited wealth and Studio 54. They could never
have made it on their own, on their own talents, and it is
in their class interest to destroy any sort of
meritocracy. They have used materialism and greed to buy
the political class.
Look up Geert Hofstede's work on "power distance,"
which is the extent to which a nation accepts inequality.
According to Hofstede, countries have different
"tastes" or preferences for inequality. For example, the
Middle East, parts of S America, India, and other parts of
Asia have a much bigger "taste" for inequality compared
to, say, the Scandinavian countries, which have the
lowest.
I would guess that differences in preferences for
inequality between countries go back to a nation's
history, and maybe other hard-to-pin down forces and
factors.
The US, according to Hofstede's work, is at the middle
point, or a little lower, as to taste for inequality.
However, reading about the recent Gini index leads me to
believe that either our preference for inequality is
changing [probably not the case, given Trump], or our
history is outrunning our preferences. In other words, we
may be getting more inequality than we like.
By the way, Hofstede assumes that power distance
preference is a fairly durable characteristic of a nation.
Preference?? Yes, I'm sure the mid east loves
inequality, which is why they are known for choosing
dictators who quash uprisings as their leaders. And how
exactly would I choose egalitarianism here in the US? I
can vote for Wall Street and Holly Wood or Wall Street
and Exxon Mobil. Which one is the egalitarian one?
However, reading about the recent Gini index
leads me to believe that either our preference for
inequality is changing [probably not the case, given
Trump], or our history is outrunning our
preferences.
"
What about "power distance" (extent to which a
nation accepts inequality) interactions with "distance
to power" extent to which a nation influences the
powerful.
I've been reading Robert J. Gordon's book, 'The Rise
and Fall of American Growth.' Gordon would say that
American labor did well from 1870-1970 because of the
innovations that drove the economy increased everyone's
productivity and the value of their work. Since 1970,
productivity has slowed down. It rose again during the
decade of the '90s but mostly for knowledge workers,
thanks to the internet, spreadsheets, etcetera, but now
has continued to slow. That was a recipe for income
inequality, and for wealth inequality as well, since the
rise of digital industries has increased property values
on the coasts and in select inland cities.
Slowing productivity also increased wealth inequality
by facilitating the decline of interest rates. This helps
the haves, since their assets are suddenly more valuable.
this guy argues that productivity has been decoupled
from compensation, and that has driven the rise of
inequality.
off topic, but the krugman review of the book
contained the interesting fact that, during the 1880's,
wall street was 7 feet deep in manure in some places.
Of course inequality is a political choice. Chosen by
the oligarchs who buy the politicians.
Just like every mainstream economist is choosing to
make millions suffer and die every day because excepting
MMT would bruise their ego's. That is a choice too.
I think that inequality is not a political choice
directly but a consequence of deregulation or "do nothing"
policy. Reducing inequality is a policy choice.
They soon made the most of the opportunity and removed
themselves from any hard work to concentrate on "spiritual
matters", i.e. any hocus-pocus they could come up with to
elevate them from the masses, e.g. rituals, fertility
rights, offering to the gods . etc and to turn the
initially small tributes, into extracting all the surplus
created by the hard work of the rest.
The elites became the representatives of the gods
and they were responsible for the bounty of the earth and
the harvests. As long as all the surplus was handed over,
all would be well.
Later they came up with money.
We pay you to do the work and you give it back to us
when you buy things, you live a bare subsistence existence
and we take the rest.
A bare subsistence existence ensured the workers didn't
die and could reproduce, why give them anymore? The vile
maxim of the masters of mankind.
Basic capitalism was how it all started in the 18th and
19th Centuries, the poor lived in squalor and the rich
lived in luxury, the same as it had always been.
Only organised labour movements got those at the bottom
a larger slice of the pie, basic capitalism gives nothing
to the people who do the work apart from a bare
subsistence existence.
The wealthy decided they needed to do away with
organised labour movements and the welfare state; it was
interfering with the natural order where they extract all
the surplus.
2017 – World's eight richest people have same wealth as
poorest 50%
Nearly there.
They need a bit more fine tuning at Davos.
Some of the world's workers are not living a bare
subsistence existence.
Francis Fukuyama talked of the "end of history" and
"liberal democracy".
Liberal democracy was the bringing together of two
mutually exclusive ideas.
Economic liberalism – that enriches the few and
impoverishes the many.
Democracy – that requires the support of the majority.
Trying to bring two mutually exclusive ideas together
just doesn't work.
The ideas of "Economic Liberalism" came from Milton
Freidman and the University of Chicago. It was so radical
they first tried it in a military dictatorship in Chile,
it wouldn't be compatible with democracy. It took death
squads, torture and terror to keep it in place, there was
an ethnic cleansing of anyone who still showed signs of
any left wing thinking.
It was tried in a few other places in South America
using similar techniques. It then did succeed in a
democracy but only by tricking the people into thinking
they were voting for something else, severe oppression was
needed when they found out what they were getting.
It brings extreme inequality and widespread poverty
everywhere it's tested, they decide it's a system that
should be rolled out globally. It's just what they are
looking for.
Would a for-profit chain of local newspapers whose
business model and advertising is built on serving the
Portland Business Alliance and Chamber of Commerce
interests hire or keep on staff any kind of investigative
journalistic team or even an individual
columnist\calumnist like recently deceased
VILLAGE
VOICE
early 1980's TRUMP SWAMP
WHISTLE-BLOWER WAYNE BARRET (RIP)?
https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html
What socio-econ OUTCOMES have resulted in even
PAMPLIN MEDIA GROUP
's outsourcing to
a non-profit InvestigateWest journalistic venture and
beginning a series that seems historic in these parts as
the SAN JOSE MERCURY NEWS series by dead investigative
journalist GARY WEBB in the years after Iran-Contra
Scandal to uncover the bid-net of BUSINESS and that was
shortly thereafter taken down off the web under pressure
by the
SAN JOSE MERCURY NEWS
.
Here's our story, for this twice-a-week Business
Serving newspaper group anyway. Get yer Huzzahs in fast
before all trace of the findings of this Moonlighting
Civil Servant who got the docs via PUBLIC RECORDS REQUEST
SEARCHES on her own dime and has embarrased the 1-Party
so-called PROGRESSIVE DEMOCRATIC BLUE PARTY MACHINE in
OREGON beginning with ORACLE LLC Lawsuit-Surrendering
ATTORNEY GENERAL Ellen Rosenblum and up to the Governor
Kate Brown neither of whom in long careers in State
Government in jobs tasked with auditing ever reviewed
these findings:
Keep on doing,
Punching way above your weight
PAMPLIN PAPERS
making a mockery of outside money-owned
OREGONIAN
and the so-called alternative weeklies who only make news
hole
available for Lifestyle features on the new Wellness Spa,
Tattoo Parlor or Booze\Gourmet venture
Mitch Ritter\Paradigm Shifters
Lay-Low Studios, Ore-Wa
Media Discussion Group
Thanks for the links, Mitch. For an economically
disadvantaged group to be assessed so much more in
penalties for minor infractions makes inequality even
worse.
TCOMES have resulted in even
PAMPLIN MEDIA GROUP
's
outsourcing to a non-profit InvestigateWest journalistic venture and beginning
a series that seems historic in these parts as the SAN JOSE MERCURY NEWS series
by dead investigative journalist GARY WEBB in the years after Iran-Contra
Scandal to uncover the bid-net of BUSINESS and that was shortly thereafter
taken down off the web under pressure by the
SAN JOSE MERCURY NEWS
.
Here's our story, for this twice-a-week Business Serving newspaper group
anyway. Get yer Huzzahs in fast before all trace of the findings of this
Moonlighting Civil Servant who got the docs via PUBLIC RECORDS REQUEST SEARCHES
on her own dime and has embarrased the 1-Party so-called PROGRESSIVE DEMOCRATIC
BLUE PARTY MACHINE in OREGON beginning with ORACLE LLC Lawsuit-Surrendering
ATTORNEY GENERAL Ellen Rosenblum and up to the Governor Kate Brown neither of
whom in long careers in State Government in jobs tasked with auditing ever
reviewed these findings:
Keep on doing,
Punching way above your weight
PAMPLIN PAPERS
making a mockery of outside money-owned
OREGONIAN
and the so-called alternative weeklies who only make news hole
available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or
Booze\Gourmet venture
Mitch Ritter\Paradigm Shifters
Lay-Low Studios, Ore-Wa
Media Discussion Group
Thanks for the links, Mitch. For an economically disadvantaged group to
be assessed so much more in penalties for minor infractions makes inequality
even worse.
Many economists tend to be global-egalitarians and believe borders
have little significance in evaluations of justice and equity. From
this perspective, policies must focus on enhancing income
opportunities for the global poor. Political systems, however, are
organized around nation states, and create a bias towards
domestic-egalitarianism.
How significant is the tension between these two perspectives?
Consider the China "trade shock." Expanding trade with China has
aggravated inequality in the United States, while ameliorating global
inequality. This is the consequence of the fact that the bulk of
global inequality is accounted for by income differences across
countries rather than within countries.
But the China shock is receding and other low-income countries are
unlikely to replicate China's export-oriented industrialization
experience. So perhaps the tension is going away?
Not so fast. The tension is even greater somewhere else: Relaxing
restrictions on cross-border labor mobility would have an even
stronger positive effect on global inequality, at the cost of adverse
effects at the lower end of labor markets in rich economies. On the
other hand, international labor mobility has some advantages compared
to further liberalizing international trade in goods.
Is Global Equality the Enemy of National Equality?
By Dani Rodrik
Abstract
The bulk of global inequality is accounted for by income
differences across countries rather than within countries.
Expanding trade with China has aggravated inequality in some
advanced economies, while ameliorating global inequality. But
the "China shock" is receding and other low-income countries
are unlikely to replicate China's export-oriented
industrialization experience. Relaxing restrictions on
cross-border labor mobility might have an even stronger
positive effect on global inequality. However it also raises
a similar tension. While there would likely be adverse
effects on low-skill workers in the advanced economies,
international labor mobility has some advantages compared to
further liberalizing international trade in goods. I argue
that none of the contending perspectives --
national-egalitarian, cosmopolitan, utilitarian -- provides
on its own an adequate frame for evaluating the consequences.
[ An excellent and necessary paper for which I am
grateful. Now for another reading. ]
Is Global Equality the Enemy of National Equality?
By Dani Rodrik
Whether one thinks the last quarter century has been good
or bad for equity depends critically on whether one takes a
national or global perspective. Within nations, inequality
has typically risen in rich and poor nations alike. (Latin
American countries, where we observe the highest levels of
inequality in the world, were the only ones that
significantly bucked the trend.) When commentators talk about
inequality, this is usually what they have in mind. But there
is another way of looking at inequality, which is to
disregard national borders and focus on the distribution of
income across all households in the world. Analyzed in this
way global inequality actually fell sharply over the same
period, thanks in large part to the very rapid growth of
China and India, the world's two largest developing
economies. In fact, this transformation has been so momentous
that the contours of the global distribution of income have
changed drastically. The two humps in the distribution –
reflecting the all-too recent reality of a world divided into
two clear segments, one small and rich, the other large and
poor – have disappeared, with an emergent global "middle
class" filling out the valley between the two humps (Figure
1).
The bulk of global income equality today is accounted for
by income gaps between countries, rather than within them.
This explains why economic growth in countries like China and
India has a significant positive effect on global equality,
even when inequality rises domestically in those countries,
as it has done substantially in China's case.
To drive home the importance of between-country gaps, I
sometimes ask my audience the following question: would you
rather be rich in a poor country, or poor in a rich country?
I tell them to assume they care only about their own income
and purchasing power....
Among the excellent aspects, the question is raised as to
what development means for relatively poor countries in which
growth even when significant for a time shuts out much of a
population; what has to be sacrificed by the fortunate for
growth to be inclusive and as such sustainable; after all
among the poorer countries growth has been decidedly subject
to disruption for decades now; supposing trade is to be
limited as a driver of growth, what then?
If people with no wealth continue to procreate
at high rates, of course inequality will only grow. The real
issue here is population growth. The poor are replicating at
high rates, and the wealthy do not. This accounts for the
growth of so much of this 'natural' inequality.
There is a major problem with Rodrik's piece. Between country
inequality has been declining steadily since the 1990s, while
within country inequality has been increasing since the
1980s. As I keep saying, the only real beneficiaries of
globalization have been the wealthy of the world.
Well, my dear, the truth is so simple that it eludes us. If
American families have enough money, they will succeed.
My
Dad was part of the cohort from WW2. They came back and were
not about to succumb to those who did so little.I remember,
during a strike, him going out with a bat to put an end to
the company running scabs. They beat the hell out of them.
Bull. We are of the same generation and the 1950s was a
period of almost unprecedented prosperity and upward
mobility. Several factors drove this. First was the GI Bill,
with free college and low cost home loans for vets. Second
was the emergence or expansion of several industries which
created a high demand for skilled labor and technical
professionals (electronics, aerospace, petrochemicals, etc.).
Third was massive government infrastructure investment, like
the interstate highway system. Finally, strong unions
fighting for the interests of the workers. Violence and
bigotry help no one and the Tangerine Turd in the White House
will do nothing good for working people.
The problem is that every nation that has ever developed in
terms of productive capacity and increased living standards
on this here earth of ours has done so by erecting some type
of barrier. There really is no other way, at least not one
that has been demonstrated to work. The barriers may take
different forms and be more or less penetrable, but they
remain. Before the turbine and diesel engines, transportation
could be considered a barrier, but it is not much of a
barrier today.
One of the big problems we have nowadays is
trying to solve problems that are basically too big to be
solved, let alone solved simplistically. The nation state,
for all its myriad faults, was a driving force for
development and our current level of wealth. It was a
powerful counter to the multi-nationalism of the feudal era
which had an international upper class that was favored over
the actually productive urban and trading classes.
Encouraging multi-national corporations and coddling
world-wide elites by trying to provide them the benefits of
development without its political costs has been a formula
for disaster.
Nationalism is natural. You either have nations or you have
one big all-powerful world government.
Caring about your
own nation first is common sense. Incredible that Trump even
has to say it. But in this crazy political environment, it
has to be said.
If you don't put yourself first, you will stop existing.
If you don't put your nation first, it will stop existing.
All software developers understand modular design. Nature
is designed modularly, and human society is part of nature.
We have nations because we are part of nature.
Sure you can love the whole world if you want. But if you
care more about the rest of the world than your own nation,
you are nuts. And yes, it is normal to be nuts these days.
Proving once again that you are an
idiot who knows nothing. Nationalism is an artificial
construct which only emerges in the late 18th-early 19th
centuries, and does not spread widely until the late
19th-early 20th centuries.
So here is some quick google information about native
american tribes who fought over limited resources. I wonder
if that was an artificial construct as well? Or if one tribe
fought other tribes to help their own families out. I wonder
if a starving neanderthal would share the meat off of a
recent kill with a neanderthal not part of his tribe? Would
that be an artificial construct? Surely Germany came into
existence in the late 18th and early 19th centuries, but
before that, the groups that became Germany were just as
nationalistic as they were after they became Germany . . .
they just defined their nation in more limited terms.
*sigh*
People pay me good money to teach them about this stuff, but
I do not think either of you could pass the entrance exam.
Read Benedict Anderson, "Imagined Communities", or the works
of E. J. Hobsbawm and T. O. Ranger on nationalism to start
with. The truth is that mobile foragers(what all humans were
until about 20,000 years ago) are not really very
territorial. See the work of Brian Ferguson on the
anthropology of warfare.
Sorry, I am just a stupid engineer, and make sure that the
building that you live and work in will stand up in an
earthquake, yet, I am probably too stupid to ever know what
you know. But that said, I didn't know that I am stupid, so I
will probably ask a question that will make a genius like
yourself roll their eyes in disgust that I was ever awarded a
degree from an american university . . . but I don't have
time to read four different authors on the subject of a
simple blog post, so I am going to ask it anyways . . . you
said that nationalism is an artificial construct that only
came around about 200 years ago, and I came back with some
ideas about, if that were the case, then why did different
indian tribes battle over scarce resources (and also simply
assumed that ancient humans behaved very similar to native
american tribes). You rebutted that by insulting my
intelligence, pointing me to four obscure academic authors
(if I was as cool and as smart as Good Will Hunting, I am
sure I would have read and remembered all the authors that
you are pointing me to already, but alas, I am not), and then
said that up until 20,000 years ago, there was surprisingly
little conflict among people. So, what is it, was nationalism
something that came about 20,000 years ago, or was it
something that came about 200 years ago. And did indian
tribes wage wars against each other? If they did, is that a
form of nationalism, or is it different? If it is different,
explain how.
IF you are not smart enough to be able to
answer these simple questions that support what you have
asserted, then I would suggest that you don't go on message
boards and insult the intelligence of others!
Menzie Chinn * introduces a new asset to economist
blogging. Joel Trachtman ** provides an excellent discussion
of whether the Destination-Based Cash Flow Tax violates WTO
rules concluding that it does. He adds:
"If enacted, the plan would likely lead to lengthy
litigation at the World Trade Organization. A (likely) ruling
that the tax is an income tax, and is applied in a
discriminatory manner, would mean that exempting exports
would be considered an illegal subsidy and taxes on imports
an illegal tariff. This could lead to trade sanctions against
the U.S. and open the door to counter sanctions and the start
of a trade war."
President Trump strikes me as someone who could care less
about WTO rules. And starting a trade war fits his grand
design of governance. As Yoda noted:
Another good article by Rodrik but a weakness of his analysis
is that welfare is assumed to be based upon real income and
not relative income with ones "group". Most analyses of
welfare find that relative income is quite important.
Obviously if one assumes that one's reference group is the
world, then the problem goes away; but empirically this is
not the case. Assuming that welfare is strongly affected by
relative income with a group which is smaller than the world,
then global equality is no longer welfare maximizing. Those
interested in these issues might be interested in Robert
Shelburne, A Utilitarian Analysis of Trade Liberalization,
available as a UN working paper.
Much like how the biggest environmentalist is the one who
already has her house built, the economists safely in their
ivory tower and comfortable with their tenured positions in
academia were more than happy to volunteer the American
working class to give up some of their wealth so that people
living in extreme property in the developing world could have
slightly better positions. I am glad to see that this is what
you guys argued for with all of your "free trade" agreements
that you pushed for over the last several decades. Sadly,
this is exactly what led us to Trump as president.
Their models told them precisely that some people would
suffer and others gain, but also that with appropriate
redistribution everybody could gain. But appropriate
redistribution was never forthcoming. Time for a national
dividend.
"... It is not just a matter of the author being able to afford Word and the equipment and other software to use it productively. E.g. how do you prepare your graphs and images? Also business partners accepting or returning the documents will have to buy into the "ecosystem". ..."
"... Academia is a highly collaborative venture, and one has to consider overall cost and productivity. ..."
"... Today there is PDF as a pretty established (readonly) document format, back in the day the standard in academia was Postscript. ..."
"... I used Word when writing my thesis in '94-95 - each chapter a separate doc, figures inserted by creating artwork separately and then using a high-end copy machine to integrate text and figures. It was an ugly process. ..."
The comparison comes 20 years late. In the 90's, MS Word was unsuitable for academic and scientific
writing, period. Even for short documents like a conference or term paper. It was geared entirely
to corporate users. In addition it was riddled with bugs and layout "quirks".
In reality, you also have to fiddle with Latex, and in the 90's embedding images was big PITA.
What I did not see in the comparison is price. I suppose one would need to compare legally-owned
copies of one product vs. the other.
It is not just a matter of the author being able to afford Word and the equipment and other
software to use it productively. E.g. how do you prepare your graphs and images? Also business
partners accepting or returning the documents will have to buy into the "ecosystem".
Academia is a highly collaborative venture, and one has to consider overall cost and productivity.
Today there is PDF as a pretty established (readonly) document format, back in the day
the standard in academia was Postscript.
>In the 90's, MS Word was unsuitable for academic and scientific writing, period... It is
not just a matter of the author being able to afford Word and the equipment and other software
to use it productively. E.g. how do you prepare your graphs and images?
I used Word when writing my thesis in '94-95 - each chapter a separate doc, figures inserted
by creating artwork separately and then using a high-end copy machine to integrate text and figures.
It was an ugly process.
> Also business partners accepting or returning the documents will have to buy into the
"ecosystem".
That's what led my employer to switch from WordPerfect to MS Word and from Lotus 1-2-3 to Excel
in the late '90s. Our customer, the US Govt, imposed a requirement that all reports and supplementary
material, e.g., presentations and spreadsheets, be submitted in MS Office formats.
> What I did not see in the comparison is price. I suppose one would need to compare
legally-owned copies of one product vs. the other.
Figure the business owns legal copies. Purchase price is one consideration, another is the
cost to maintain the software and keep staff trained in how to use it. The inertia - the tendency
to stick with what you've got - can be huge when taking the latter factors into account. In an
academic research group not only is there a mentality that you want to use the best available
tool for the job but there's constant turnover, which supports rapid adaptation and evolution.
Inertia is low. In contrast, turnover in (non-startup) business environments is comparatively
slow. Those businesses make cost-benefit assessments of adopting new software. The tendency is
to stick with what you've got until it's absolutely positively unsustainable to do so.
1. My experience with LaTeX vs Word is consistent with the study results - "We show that LaTeX
users were slower than Word users, wrote less text in the same amount of time, and produced more
typesetting, orthographical, grammatical, and formatting errors."
2. There's a guy in my group, the most talented applied mathematician I've ever known -incredibly
good at applying high level math to solve practical problems, who swears by LaTeX even though
we're standardized on Word at work. He's not any faster in preparing his docs than the rest of
us and they're not any better in terms of look and feel. He just prefers to use LaTeX. Getting
him to use Word has been like pulling teeth, i.e., entirely consistent with "On most measures,
expert LaTeX users performed even worse than novice Word users. LaTeX users, however, more often
report enjoying using their respective software." I will send him a link to the PLOS ONE article
first thing Monday morning;-)
"My experience with LaTeX vs. Word is consistent with the study results - "We show that
LaTeX users were slower than Word users, wrote less text in the same amount of time, and produced
more typesetting, orthographical, grammatical, and formatting errors."
You are wrong.
Such a statement signifies complete lack of understand of what the writing a book or dissertation
is about. And what problems the author faces and need to solve in the process (this is pretty
hard and time consuming job to write a sizable book - your book is a very harsh mistress ;-)
MS Word and TeX represent two different categories of writer's tool: the former is the tool
without direct access to raw representation of the document/book. The latter is a tool with full
access to such a representation. In this sense you can't and should not even compare them, unless
you want to looks like an incompetent.
Moreover on long documents (to say nothing about books) latest versions of MS Word all have
strange quirks. Sometime it change your formatting in a undesirable way. Microsoft software quality
really went downhill after, say, 2003.
Fixing those quirks including "spontaneous" changes in formatting can take a day or a week
of work even if you know MS Word perfectly well (which, unsurprisingly, very few people outside
programming community do), including the in-depth knowledge of styles and, especially, macro programming.
The latter is a must for writing any sizable book in MS Word. Or you need a good programmer to
help you.
Of course, if you expect that your book will be a bestseller you can hire a top level programmer
to adapt set of tools/macros for you, but that's a lot of money. You need approximately 3-5K lines
of macros to supplement MS Word for writing a sizable book (say, over 300 pages).
I do know a couple of authors who write their technical books using MS Word (Bruce Eckel the
author of "Thinking in Java" is one example). I view them as perverts, although being a programmer
is a distinct advantage in such a situation; you will need all your skills to make the job done
and you do not need to pay somebody else for such a help ;-).
Writing a large book is about managing revisions and a very precise formatting of chapters.
Which needs to be preserved (and verified with some automatic tools) over many iterations (which
can take several years) until the final draft of the book. Manipulating the set of styles you
use in the book is not easy in MS Word.
Here access to the raw representation of the text of the book is vital. If you need to check
your examples (like in case of writing programming books), access to raw text is a must (although
can be imitated in MS Word via macros). If you are writing geo science or any book with a lot
of mathematics – you better forget about MS Word.
The usual trick authors who write books in MS Word use -- storing each chapter as a separate
document -- makes it difficult to create cross references and such. Chapters became semi-isolated
and that negatively affects the quality of the book.
So for technical books and especially dissertations TeX has a huge (and I mean HUGE) edge over
MS Word. Only using HTML with styles (FrontPage 2003 or Microsoft expression Web) can compete
with TeX and only in case you do not use mathematical notation and equations extensively.
OK. word is faster. However there's nothing there about what the document looks like. Word
documents look like word documents, i.e. not very good. Perhaps that's a function of somebody
knowledgeable setting up templates. I find it really hard to believe that it's that much faster.
I find word completely bewildering.
People like latex it better because they can use their favorite text editor and get it done.
using word is completely and utterly annoying. That accounts for the enjoyment factor i think.
I respectfully disagree, but I see your point -- MS Word is much simpler to use for short papers,
especially in multi-author env. It requires less sophistication on users part.
Please understand that for LaTeX to work in multi-author environment you need Git or Subversion
(or similar version management system) to be installed and learned by all people in the group.
Even when just two people are involved (as often is the case with dissertations ) this is a must.
But from the point of view of achievable final quality of the product WordPerfect is better
as PGL pointed out.
Both are (unlike TeX) integrated WYSIWYG ("what you see is what you get") publishing environments
with a lot of sophisticated features (such as folding, macros, styles, creation of TOC, powerful
spellchecker, etc).
WordPerfect still is used by lawyers and some other professions who value precise layout:
== quote ==
Why do lawyers still love WordPerfect? One attorney answers with "Two words: Reveal Codes. At
one point about 10 years ago, I tried switching to Word. My secretary and I agreed we hated it
after only a few weeks."
== end of quote ==
I am surprised that so few people in the USA use Microsoft Expression Web (or FrontPage ) for
this purpose in corporate env.
I am also surprised how Microsoft being a huge company still managed to produce very complex,
professional tools like Ms Word and managed to push them to people who are definitely unable to
use even 10% of the features offered.
Few people understand that MS Word takes years of day-to-day usage (plus some programming abilities)
to learn on the expert level. In reality this is a complex publishing system.
I know some secretaries with almost 30 years day-to-day experience (starting PC DOS days with
MS Word 4, which was released in 1987) who still learn something new each month. Often because
they knew it a couple of years ago, but forgot :-).
BTW MS Word is one of the few applications for which viruses ("macro viruses") exist and were
a nasty problem in the corporate environment in 1996-2002.
Bill Gates took huge risk to bring "over-sophisticated" products like this to the market and
still managed to achieve a dominant position among regular users. In Bill Gates days Microsoft
was a "king of software complexity" in this product niche.
Kind of brings you back, doesn't it. I seem to recall a guy in the lab running LateX on a PDP
11/70 back in the early 80's - rather a boutique affectation even then.
libezkova -> Observer... , -1
TeX is a standard typesetting tool for the American Mathematical Society.
"... Your analysis is wrong. The wealthy elites backed Jeb! Bush and Rubio. Trump picked up the economic nationalism of Jeff Session, Steve Bannon and talk radio. The rubes voted for Trump in the primary even though the wealthy spent a lot on their candidates. The rubes want to scapegoat both parties (Bill Clinton and the corrupt Republican insiders - drain the swamp). ..."
"... Trump channeled the anger of the rubes. Hillary didn't get the turnout that hope and change Obama got. She flip-flopped on the TPP while Obama spent his remaining months trying to pass it. Now it's dead. ..."
"... The actual solutions will require sacrifice from the rich. Even more important (and difficult); it will require that we abandon the narrative of the rugged individual who "takes care of himself" and "don't need no gobinment". The future belongs to countries that can build up effective systems to educate each individual to the fullest extend of their capabilities (not their wallets) - thereby making sure that critical human resources do not go to waste. The future doesn't belong to the dying empire of the US. ..."
"... Obama averaged 1.7 percent annual GDP growth over his 8 years after the largest financial crisis since the Great Depression. ..."
"... This is very true. Even if you want to quibble about whether trade is somewhat more important than Delong says it is. The real problem is the US does not have a functioning workforce policy. ..."
"... And trade is more easily scapegoated- I mean who can argue against technological progress? The overall problem will not be addressed by focusing all attention on job loss due to trade. ..."
"... Excellent comment by jonny bakho. Much better than Delong's I think. ..."
"... But it is also true that scapegoating trade can get you votes, so there is a political problem. ..."
Worker dislocation by factory closings and layoffs is an issue the US does not address very well
for lack of a workforce policy
Dislocations can be caused by offshoring and trade
Dislocations can be caused by technological advance.
We make more goods today with fewer workers; from 30 percent to 8.6 percent
As DeLong points out, 18 of the 21% loss is due to technology.
0.1% is due to NAFTA and trade agreements.
The problem of worker dislocation will never be addressed if all the focus is on the 0.1% and
the 18% is ignored.
The wealthy elites are happy to scapegoat NAFTA because addressing dislocation properly would
require transfer payments. The wealthy always want to avoid paying their fair share so they are
more than happy to blame NAFTA and cheer on the pols who scapegoat trade. The wealthy don't tolerate
pols that propose to truly address the issue in ways that involve transfer payments.
It is easy to drum up anti trade sentiments using xenophobia, racism and nativism. It is more
difficult to get people to be introspective and consider changing what they do
Your analysis is wrong. The wealthy elites backed Jeb! Bush and Rubio. Trump picked up the
economic nationalism of Jeff Session, Steve Bannon and talk radio. The rubes voted for Trump in
the primary even though the wealthy spent a lot on their candidates. The rubes want to scapegoat
both parties (Bill Clinton and the corrupt Republican insiders - drain the swamp).
Dean Baker:
"The 2016 GDP growth brought the average for the eight years of the Obama administration to
1.7 percent."
Trump channeled the anger of the rubes. Hillary didn't get the turnout that hope and change
Obama got. She flip-flopped on the TPP while Obama spent his remaining months trying to pass it.
Now it's dead.
You are absolutely correct. The actual solutions will require sacrifice from the rich. Even
more important (and difficult); it will require that we abandon the narrative of the rugged individual
who "takes care of himself" and "don't need no gobinment". The future belongs to countries that
can build up effective systems to educate each individual to the fullest extend of their capabilities
(not their wallets) - thereby making sure that critical human resources do not go to waste. The
future doesn't belong to the dying empire of the US.
Yes. The wealthy will need to sacrifice to fund these programs. And yes, the idea of every man
for himself (rugged individual) needs to be abandoned.
Unfortunately, racism gets in the way of educating ALL Americans and hurts all poor people,
not just blacks and Hispanics. Abandoning white male patriarchy will require sacrifice on the
part of many.
"It is easy to drum up anti trade sentiments using xenophobia, racism and nativism."
Only in bad times. People want scapegoats.
Obama averaged 1.7 percent annual GDP growth over his 8 years after the largest financial
crisis since the Great Depression.
More people voted for Hillary, but Sanders ran a popular campaign. Trump wont the primary and
electoral college by playing to the uneducated's fears and attacking the elite as corrupt.
Yes he scapegoated trade and offshoring, but he provided an explanation for the stagnating
incomes and shrinking middle class that voters have been experiencing for decades.
"Worker dislocation by factory closings and layoffs is an issue the US does not address
very well for lack of a workforce policy.
Dislocations can be caused by offshoring and trade
Dislocations can be caused by technological advance
We make more goods today with fewer workers; from 30% to 8.6%. As Delong points out 18 of
the 21% loss is due to technology.
.1% is due to Nafta and trade agreements.
The problem of worker dislocation will never be addressed if all the focus is on the 0.1%
and the 18% is ignored."
This is very true. Even if you want to quibble about whether trade is somewhat more important
than Delong says it is. The real problem is the US does not have a functioning workforce policy.
And trade is more easily scapegoated- I mean who can argue against technological progress?
The overall problem will not be addressed by focusing all attention on job loss due to trade.
Excellent comment by jonny bakho. Much better than Delong's I think.
"... To insist that offshoring and illegal immigration were not partially responsible for the increase in US inequality is gross denial. As with the earlier moves to the southern states, the lives of the illegal immigrants and the workers in Mexico and Asia were improved, but US workers paid a dear price in wage loss. ..."
"... Another huge factor was the financialization that was occurring during this period (perhaps somewhat due the other changes and their effect on the nations politics). ..."
"... Most college grads are working jobs that do not require a degree. Indeed many jobs routinely filled by high school graduates when I was young now want a college degree. Melvin completely nails it. ..."
"... College degree now serves as a filter to cut off unnecessary applicants. That does not means that the college degree by itself is not worth it. There is a value in the college degree beyond job market prospects. In this sense huge inflation of the cost of higher education is a big injustice in itself. ..."
"... My last point would be that, with things like Dynasty trusts, it becomes much easier for the top .01% to maintain their place at the top of the income 'food chain', versus people born into families of more modest means. Those people in the .01% can send their children to the truly best schools in the country, whereas the rest of us go to whatever schools our parents can afford, or however much college debt we're willing to absorb. ..."
Why the surge in inequality?
Good question. When did this surge begin? What was going on that might have led to this surge?
Seems a lot of agreement on the 1970s as the beginning. What was going on in the 1970? Beginnings
of offshoring to Mexico and Asia (the movement of well paying 'rustbelt' union jobs to the cheap
labor southern states had begun earlier with questionable net in that southern labor gained and northern
lost), industrial automation began to take off (especially in auto manufacturing – car plants that
employed 5k in 1970 were producing more cars with 1.2k by the end of the 70s), but just as significant
– about this time, the US began to lose market share to European and Asian manufacturing.
The education thing is a canard. In the 1950s, Detroit employed millions of workers who had less
than a high school education; by the late 50s, they demanded a high school diploma; today, they can
demand an Associate degree. All apart of the selection process. Higher academic credentials help
the individual find a better paying job, but do not in fact create anymore jobs, let alone the well
paying assembly line jobs of before.
To insist that offshoring and illegal immigration were not partially responsible for the increase
in US inequality is gross denial. As with the earlier moves to the southern states, the lives of
the illegal immigrants and the workers in Mexico and Asia were improved, but US workers paid a dear
price in wage loss.
Another huge factor was the financialization that was occurring during this period (perhaps somewhat
due the other changes and their effect on the nations politics).
In toto, it was a convergence of: loss of market, automation, offshoring, illegal immigrant laborers,
this financialization that led to the surge in inequality.
The paper above references a book called "The Race between Education and Technology" that
provides a useful framing of the issue. Essentially:
"The book argues that technological change, education, and inequality have been involved
in a kind of race. During the first eight decades of the twentieth century, the increase of
educated workers was higher than the demand for them. This had the effect of boosting income
for most people and lowering inequality. However, the reverse has been true since about 1980.
This educational slowdown was accompanied by rising inequality. The authors discuss the complex
reasons for this, and what might be done to ameliorate it."
However, authors of the paper mentioned in the OP do dismiss education as a major cause
of inequality if we are looking at the 1% vs the 99% (rather than a more broad measure).
DrDick -> sanjait...
, -1
Most college grads are working
jobs that do not require a degree. Indeed many jobs routinely filled by high school graduates
when I was young now want a college degree. Melvin completely nails it.
"Most college grads are working jobs that do not require a
degree."
College degree now serves as a filter to cut off
unnecessary applicants.
That does not means that the college degree by itself is
not worth it. There is a value in the college degree beyond
job market prospects.
In this sense huge inflation of the cost of higher
education is a big injustice in itself.
I agree that I don't think there
was any one single thing which started driving inequality.
You pointed out 'Beginnings of
offshoring to Mexico and Asia (the movement of well paying 'rustbelt' union jobs to the cheap
labor southern states had begun earlier with questionable net in that southern labor gained
and northern lost)'. True, but implicitly those southern states were 'right to work' states
which is why the labor was cheaper.
Also, I believe in Thomas Pikkety's book 'Capital in the 21st Century' he pointed out that
the top .01% have so much wealth, they can't spend all the income they earn from dividends,
so that gets reinvested into more equities (stocks, bonds, et al) which then earn even more
dividends.
And when you point out automation, implicit in that is that the owners of the company (either
privately or stockholders) will increase their share of the 'pie', so to speak, which gets
split between the entrepreneurs and the workers, also increasing the inequality.
My last point would be that, with things like Dynasty trusts, it becomes much easier for
the top .01% to maintain their place at the top of the income 'food chain', versus people born
into families of more modest means. Those people in the .01% can send their children to the
truly best schools in the country, whereas the rest of us go to whatever schools our parents
can afford, or however much college debt we're willing to absorb.
"... Another quibble, the defining of inequality by the single metric of share of income of the 1% is a bit reductive, though only a bit. ..."
"... Sometimes I think that the success of neoliberalism would be impossible without computer revolution. ..."
"... Bargaining power was squashed by neoliberalism by design. So this is not a "natural" development, but an "evil plot" of financial oligarchy, so to speak. In this sense dissolution of the USSR was a huge hit for the US trade unions. ..."
"... Education is now used as the filter for many jobs. So people start to invest in it to get a pass, so to speak. With the neoliberal transformation of universities it now often takes pervert forms such as "diploma mills" or mass production of "Public relations" graduates. ..."
"... Neoliberal transformation of universities into profit centers also played the role in increasing the volume -- they need "customers" much like McDonalds and use misleading advertisements, no entrance exams, and other tricks to lure people in. ..."
If the world were sane, this is the kind of thinking that would be taking place about inequality.
Rather than jumping to simple conclusions based on heavy priors (which is where too much of the
"debate" starts and stops), one starts with a broad, open minded and contemplative review that
seeks to identify primary causal factors.
That said ... there is a lot that could be quibbled here.
One, it's not always the case that identifying primary causes leads one directly to solutions.
Sometimes the solution has little to do with the cause. If, for example, changing climate causes
an increase in forest fires, we should consider that as another factor in our evaluation of climate
economics, but in terms of strategies for addressing forest fires, we have to find proximate solutions.
Although in practice, certainly we will often have a better understanding of what solutions
might be possible and might be effective when we carefully analyze causes. The endeavor of identifying
causes is absolutely worthwhile for that reason.
Another quibble, the defining of inequality by the single metric of share of income of
the 1% is a bit reductive, though only a bit.
Last note ... I notice international trade is not mentioned here. That doesn't mean it isn't
a primary driver, although as I've said many times, I don't think it is a primary driver, and
it appears Kenworthy didn't think it even worth mentioning.
Although my biggest quibble is that I think Kenworthy missed the big cause entirely: the effect
technology has had in making workers fungible.
IT has made communications almost free and made micromanagement of business systems ubiquitous.
As a result, firms are no longer dependent on long-tenured workers, or even teams of workers in
a particular place. Anything and anyone can be replaced and outsourced (in the broadest sense
of the term, not just offshoring to foreign workers), and when costs are high companies do this
aggressively.
This change has immeasurably changed the nature of work and the relative bargaining powers
of individual workers and even teams of workers. That, I believe, is why education is rising,
and doing so in the countries that are most adept and aggressive about business process solutions
implementation across many sectors. If I'm right, we will see this trend accelerate very soon
in countries that are laggards in this domain, as they finally start operating as resource planned
enterprises.
Because this effect is not measured and difficult to measure ... I think it gets overlooked.
But if I were a researcher in this field, I'd be looking at ERP adoption trends vs within firm
inequality trends and looking for correlations. This would get confounded by firm size but I bet
there are ways to tease out the effect.
"the effect technology has had in making workers fungible."
Yes, this is a very good point. Especially computer revolution and related revolution in telecommunications.
Starting from "PC revolution" (August 12, 1981) the pace of technological innovation was really
breathtaking. Especially in hardware.
Regular smartphone now is more powerful then a mainframe computer of 1971 which would occupy
a large room with air conditioning (IBM 360/370 series). So say nothing about early 1960th ("Desk
Set" movie with Katharine Hepburn, which was probably the first about displacement of workers
by computers, was produced in 1957)
"This change has immeasurably changed the nature of work and the relative bargaining powers
of individual workers and even teams of workers. That, I believe, is why education is rising..."
The nature of work in "classic" human fields (agriculture, steel industry, electrical generation,
law, etc) was not changed dramatically but the "superstructure" above them did.
Sometimes I think that the success of neoliberalism would be impossible without computer
revolution.
Bargaining power was squashed by neoliberalism by design. So this is not a "natural" development,
but an "evil plot" of financial oligarchy, so to speak. In this sense dissolution of the USSR
was a huge hit for the US trade unions.
Education is now used as the filter for many jobs. So people start to invest in it to get
a pass, so to speak. With the neoliberal transformation of universities it now often takes pervert
forms such as "diploma mills" or mass production of "Public relations" graduates.
Neoliberal transformation of universities into profit centers also played the role in increasing
the volume -- they need "customers" much like McDonalds and use misleading advertisements, no
entrance exams, and other tricks to lure people in.
So university education now is a pretty perverted institution too.
"Other findings show that pen and paper have an edge over the keyboard.
Research by Princeton University and the University of California at Los
Angeles, published in 2014, showed that the pen is indeed mightier than the
keyboard. In three studies, researchers found that students who took notes
on laptops performed worse on conceptual questions than students who took
notes longhand. Those who took written notes had a better understanding of
the material and remembered more of it because they had to mentally process
information rather than type it verbatim" [BBC]. Wait. Computers make you
stupid?
Not surprising. The basic upshot is that computers encourage distraction and
even when that is controlled for they encourage people to type down what they
hear (i.e. transcribing) and not to encode, or distill it down to the important
concepts. This latter is important because it means you are listening at a
deeper level and thinking about what you are getting and are thus more likely
to recall and use the knowledge later.
"... You can't get something from nothing but, believe it or not, the money is there, somewhere to make $10 jobs into $20. Bottom 45% of earners take 10% of overall income; down from 20% since 1980 (roughly -- worst be from 1973 but nobody seems to use that); top 1% take 20%; double the 10% from 1980. ..."
"... Top 1% share doubled -- of 50% larger pie! ..."
"... One of many remedies: majority run politics wont hesitate to transfer a lot of that lately added 10% from the 1% back to the 54% who now take 70% -- who can transfer it on down to the 45% by paying higher retail prices -- with Eisenhower level income tax. In any case per capita income grows more than 10% over one decade to cover 55%-to-45% income shifting. ..."
"... Not to mention other ways -- multiple efficiencies -- to get multiple-10%'s back: squeezing out financialization; sniffing out things like for-profit edus (unions providing the personnel quantity necessary to keep up with society's many schemers; snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary volume of lobbying and political financing; less (mostly gone) poverty = mostly gone crime and its criminal justice expenses. ..."
Simple, adequate if not perfect -- but adequate -- answer -- in any rate the only answer by now
-- to losing manufacturing jobs to outsourcing or automation:
Doubling of per capita income since 1968 -- when fed min wage was $11 -- means the labor market
will support; means the ultimate consumer will pony up for a high enough price: to allow most
jobs (e.g., stacking shelves at WalMart) to pay $20 (jobs that now pay $10).
THE MONEY IS THERE SOMEWHERE
You can't get something from nothing but, believe it or not, the money is there, somewhere to
make $10 jobs into $20. Bottom 45% of earners take 10% of overall income; down from 20% since
1980 (roughly -- worst be from 1973 but nobody seems to use that); top 1% take 20%; double the
10% from 1980.
Top 1% share doubled -- of 50% larger pie!
One of many remedies: majority run politics wont hesitate to transfer a lot of that lately
added 10% from the 1% back to the 54% who now take 70% -- who can transfer it on down to the 45%
by paying higher retail prices -- with Eisenhower level income tax. In any case per capita income
grows more than 10% over one decade to cover 55%-to-45% income shifting.
Not to mention other ways -- multiple efficiencies -- to get multiple-10%'s back:
squeezing out financialization;
sniffing out things like for-profit edus (unions providing the personnel quantity necessary to
keep up with society's many schemers;
snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary
volume of lobbying and political financing;
less (mostly gone) poverty = mostly gone crime and its criminal justice expenses.
IOW, labor unions = a normal country.
ALSO HEALTH CARE IS GROWING BY LEAPS AND BOUNDS AND CAN TAKE UP MANUFACTURING'S SLACK.
Males need
to be less afraid of formerly "feminine" rolls like nurse. Was in urgent-care walk in last week
-- nurses or something like: one, big guy with dagger into skull tattoo on one forearm, "RESPECT"
on other. Other looked very male too. Health care conveniently for labor market spread evenly
everywhere -- hopefully to be covered by gov (next Dem Congress).
HERE'S HOW TO UNION-UP
America should feel perfectly free to rebuild labor union density one state at a time -- making
union busting a felony. Republicans will have no place to hide.
Suppose the 1935 Congress passed the NLRA(a) intending to leave any criminal sanctions for
obstructing union organizing to the states. Might have been because NLRB(b) conducted union elections
take place local by local (not nationwide) and Congress could have opined states would deal more
efficiently with home conditions -- or whatever. What extra words might Congress have needed to
add to today's actual bill? Actually, today's identical NLRA wording would have sufficed perfectly.
Suppose, again, that under the RLA (Railroad Labor Act -- covers railroads and airlines, FedEx)
-- wherein elections are conducted nationally -- that Congress desired to forbid states criminalizing
the firing of organizers -- how could Congress have worded such a preemption (assuming it was
constitutionally valid)? Shouldn't matter to us. Congress did not!
Note well: it is not mostly the organizer's job loss to be punished; it is much more the interference
with all employees' bargaining power -- working them for less.
Ann; you know often I do 4,000-5,000 spam mails --
mostly journalists, state legislators, unions -- if I get one or two click-backs of something
of my own that's good.
This one I only sent out maybe 2,000 -- concentrated mostly on Illinois,
Wisconsin and Minnesota -- and this week got an unheard of 80 click-backs on this link (hopefully
some looked at the blog too).
So, maybe something's stirring. So try to relax -- all in fun. :-)
Planning to blanket every state -- may take couple of months.
As many of her critics have pointed out, DeVos is a case study in the nefarious ways that big money
shapes education policy in the United States. But she takes such criticism in stride. In 1997 she
wrote: "I have decided . . . to stop taking offense at the suggestion that we are buying influence.
Now I simply concede the point. They are right. We do expect some things in return."
In short, DeVos is arguably the nation's most powerful proponent of school privatization - and
now, even after
bumbling her way through her confirmation hearing, she's set to take the reins of the Department
of Education.
American public schools have some very serious problems. Spend time in the crumbling public schools
on the south side of Chicago and then venture over to the plush public schools in the leafy Chicago
suburbs, and you'll experience alternative universes. Schools all over the greater Chicagoland are
filled with committed and professional teachers, some quite excellent. But the students who attend
the city schools arrive at school with stark disadvantages, unlike their better-off suburban peers.
Discrepancies in school funding only exacerbate such class deficits.
Most of the problems with the public schools, in other words, are outgrowths of a deeply unequal
society. Yet the solution to this problem - the redistribution of wealth - is inimical to the interests
of billionaires like DeVos. The fact that she will soon be in charge of the nation's schools is a
sick joke. Make no mistake: DeVos is a serious threat to public education and should be treated accordingly.
Unfortunately, many Democrats have long supported the same so-called education reform measures
that DeVos backs. Often wrapping these measures in civil rights language, Democratic education reformers
have provided cover for some of the worst types of reforms, including promoting the spread of charter
schools - the preferred liberal mechanism for fulfilling the "choice" agenda. (Charter schools operate
with public money, but without much public oversight, and are therefore often vehicles for pet pedagogical
projects of billionaire educational philanthropists like Bill Gates and Mark Zuckerberg.)
DeVos will not have to completely reverse the Department of Education's course in order to fulfill
her agenda. Obama's "Race to the Top" policy - the brainchild of former Secretary of Education Arne
Duncan, past CEO of Chicago Public Schools - allocates scarce federal resources to those states most
aggressively implementing education reform measures, particularly around charter schools.
Perhaps the most effective advocate of school choice is New Jersey senator Cory Booker, who many
Democrats are touting as the party's savior in the post-Obama era. Liberals swooned when Booker opposed
his Senate colleague Jeff Sessions, the right-wing racist Trump tapped to be the next attorney general.
But however laudable, Booker's actions didn't take much in the way of courage.
Booker's funders - hedge-fund managers and pharmaceutical barons - don't care about such theatrics.
They're more concerned that he
vote Big Pharma's way and keep up his role as a leading member of Democrats for Education Reform,
a pro-privatization group. They want to make sure he continues attacking teachers' unions, the
strongest bulwark against privatization.
Their aim is to undercut public schools and foster union-free charter schools, freeing the rich
from having to pay teachers as unionized public servants with pensions.
So in the fight against Trump and DeVos, we can't give Booker and his anti-union ilk a pass. As
enablers of DeVos's privatization agenda, they too must be delegitimized.
Public education depends on it. The beautiful school where I send my children depends on it.
"... three decades the national conversation about education has been held hostage by the anxiety-inducing metaphors that always accompany the neoliberal dismantling of public services. ..."
"... President Obama and his advisers have done little to resist this state of affairs, carrying out low-intensity warfare on teachers' unions and perpetuating harmful myths that the American school system is "life-saving" (because we live in a meritocracy), that it is "in crisis" (because test scores are falling behind globally), and that it can only be saved by the free-market fixes (competition, standards, accountability, and choice) originally advocated by conservative think-tanks like the Heritage Foundation and billionaire philanthropists. ..."
"... Of all the education initiatives with names that sound like spaceships (America 2000, Goals 2000) or battle cries (No Child Left Behind), Race to the Top, the Obama administration's signature contribution to the genre, may be the most successful assault yet in the sustained effort to destroy the democratic project of public schooling. ..."
In some languages, the words for "teach" and "learn" are the same, suggesting a view of
education as a cooperative activity, rather than as something that is done to students. Not
in English, and certainly not in the United States, where for three decades the national
conversation about education has been held hostage by the anxiety-inducing metaphors that
always accompany the neoliberal dismantling of public services.
President Obama and his
advisers
have done little to resist this state of affairs, carrying out low-intensity warfare
on teachers' unions
and perpetuating harmful myths that the American school system is
"life-saving" (because we live in a meritocracy), that it is "in crisis" (because test
scores are falling behind globally), and that it can only be saved by the free-market fixes
(competition, standards, accountability, and choice) originally advocated by conservative
think-tanks like the Heritage Foundation and billionaire philanthropists.
Of all the education initiatives with names that sound like spaceships (America 2000,
Goals 2000) or battle cries (No Child Left Behind), Race to the Top, the Obama
administration's signature contribution to the genre, may be the most successful assault
yet in the sustained effort to destroy the democratic project of public schooling. In 2009,
more than $4 billion of public funds were set aside for K-12 education as part of TARP,
representing a moment of enormous possibility for the president. The money could have been
used to equalize funding among schools (
which
is exceptionally inequitable in America
) or to incentivize states to make changes that
we
know
improve educational outcomes for poor children and children of color, like
reducing class sizes
and
promoting socioeconomic and racial integration
.
Instead, the Obama administration chose to use a series of competitive grants to push
the adoption of the Common Core standards, the linking of teacher evaluations to student
test scores, and the expansion of charter schools. These measures were deemed "innovative,"
even in the face of growing evidence that charter test scores are no better than those of
traditional public schools and that charters are
more
stratified by race, class,
special education status, and possibly language, than public schools.
Today, forty-two of fifty states are members of the Common Core Standards Initiative and
nearly
half
tie teacher evaluations to test scores, an enormous transformation in policy. Yet
test scores on the NAEP (known as "America's report card") have fallen for the first time,
and Race to the Top has
failed to deliver
even by its own paltry and unimaginative measures. Meanwhile, the
real crisis facing children
- a disgraceful level of poverty - has gone unnamed by
anyone but Bernie Sanders, let alone addressed.
It was nice that Obama called out the widening wealth gap during his farewell address,
but the ultimate legacy of his administration has been the deepening of that inequality
through the advancement of the agenda of the Broad, Walton Family, and Gates Foundations
over the demands of the American people for free, high-quality, and equitably funded
schools (a counsel for the education department even
once mistakenly referred
to the Obama administration as "the Gates administration").
Privatization efforts under Trump will be worse. Clearly, no one is going to give us
control of our schools. We're going to have to take it. In 2016, the Black Lives Matter
movement and the NAACP
called for a moratorium on charter schools
- it's a start.
"... we have, in addition to 7.5 million officially unemployed (a number that is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million Americans aged 25-to-54 who reside outside the confines of the labor force. And at a time when job openings are at record highs. ..."
"... Even the most ardent ''supply-sider" would admit that labor input is key to the outlook and this should really be at the top of the agenda - closing the widening and unprecedented gap between job openings and new hiring. There simply is no replacement for excellent education achievement with respect to maximizing labor productivity. ..."
"... So about all those job openings? Do they all pay a living wage ? ..."
"... So about all those job openings? They are FAKE job openings. They basically want to hire someone with $100K/year worth of experience & qualifications for $30K/year. And then when no one applies, the companies whine that they need H1B visa to fill the void. ..."
"... It boggles my mind, the kind of bullshit experienced by an acquaintance who is a Waitress, on top of all the shitty employers and scummy customers, she has to pay taxes on Estimated Tips, by a Percentage of Transactions regardless of whether she actually Received a Tip. ..."
"... The government assumes a tip exists at 8% and the waitress must pay on the assumption or the business owner gets pissed off because he/she will catch shit from the IRS at Tax time. Black people only tip on the 29th of February if it is a full moon, a trick they learned from the cheap Canadian bastards who got the idea from the Asians who also, mostly, do not tip. An establishment owner selling Beer/ Wine/ Liquor is responsible for the customers action after leaving the establishment, if they get in a wreck / DUI, ..."
"... That is just the Bar / Restaurant biz. Mc Donalds and the Fast food scam clan are often getting 50% of an employees wages paid through special programs for hiring recently released Felons, drug rehab grads and recent immigrants to name a few, so you already paid for half that burger and fries before you ordered it and Mc Donald is doing quite nicely, thank you. I could go on into the Construction and Manufacturing realms but life is short. ..."
Some observations on recent negative trends in productivity, employment mismatch, and
labor training and education from the increasingly more bearish David Rosenberg, who
notes that the Trump's proposed policies may end up helping growth on the margins, but
fail to focus on what is really important, making tens of millions of US workers
competitive and qualified for today's jobs market.
From Breakast with Rosie, via
Gluskin Sheff
I don't think we have a productivity problem - in fact, the demise of productivity is
vastly overstated and that is because the Bureau of Labor Statistics (BLS) is likely
vastly overstating labor input, and I'm talking here about how hours worked are
estimated.
But the real travesty, and what I think deserves top priority (but I don't see it),
is that
we have, in addition to 7.5 million officially unemployed (a number that
is closer to 15 million when all the hidden unemployment is accounted for), 23.5 million
Americans aged 25-to-54 who reside outside the confines of the labor force.
And
at a time when job openings are at record highs.
The problem is that unqualified applicants for these openings also are at a
record high
. The number of jobs available that are not being filled because the
skill set is absent is at an unprecedented level - and this was an overriding theme in
the latest edition of the Fed's Beige Book.
The question is what is in the policy playbook to redress this situation?
What we need is a policy playbook that makes education, apprenticeship and training a
major priority - the one plank that I had hoped would be yanked out of Bernie Sanders'
platform.
While deregulation and simplifying the tax code obviously are constructive segments
of the Trump plan, they are not the most important obstacles in the way of growth.
Neither is globalization.
Even the most ardent ''supply-sider" would admit that labor input is key to the
outlook and this should really be at the top of the agenda - closing the widening and
unprecedented gap between job openings and new hiring. There simply is no replacement
for excellent education achievement with respect to maximizing labor productivity.
I see scant attention being paid to this file - su
rely this is more important
than U.S. involvement in Brexit or trying to play a role in breaking up the European
Union, don't you think?
This figure is what terrifies Yellen and Obama. Steve Mnuchin and Trump have both called
the formula Obama changed to estimate the unemployment/employment rates pretty much total
bullshit.
Once the figures are revised back to 2006 we will probably find a steady 9%+ REAL
unemployment rate since 2007, and that tarnishes Janet's bullspray from her mouth and Obama's
precious and fading fast legacy.
Wulfkind -> FredFlintstone
•Jan 21, 2017 4:53 PM
So about all those job openings? Do they all pay a living wage ? That is to say...can they
pay a person enough money to cover all normal living expenses ( not including debt you didn't
need to obtain but including debt like a mortgage or rent )....with enough left over to save ?
Also....will those jobs be linked to inflation so over time your once living wage does not
stagnate and drop below inflation so that you are actually taking a pay cut every year from
then on out ?
My suspicion is no. These fools only count the number of job postings without looking into the
quality of said jobs. And if they are shit jobs they'll just go to wetbacks anyway and thus
not help real Americans.
Thus....the high number of people not in the labor force.
rbg81 -> Wulfkind
•Jan 21, 2017 5:24 PM
So about all those job openings?
They are FAKE job openings. They basically want to hire someone with $100K/year worth of
experience & qualifications for $30K/year. And then when no one applies, the companies whine
that they need H1B visa to fill the void.
Or undocumented who will work 14 hour days for minimum wage (or less) and not complain.
therover -> rejected
•Jan 21, 2017 5:13 PM
So glad I am on the same side of the fence as you. I keep telling people when they ask
where my 17 year old son is going to school or what his SAT scores none of their business and
fuck that path of higher education bullshit where you spend 100K+ on some degree that will
probably get you no where.
That 100K+ that I have saved up is going to build him a woodshop filled with tools so he can
hone his creative skills in wood working or lead to a path toward carpentry, or it's going to
buy him a van filled with plumbing equipment so he can work with his uncle as a plumber.
As part of that path, going to community college for some business courses and striving to
getting first a 2 year associates that if needed, can matriculate to a 4 year degree in
business ( for his OWN BUSINESS). Not spending tons of cash right out of the gate on a 4 year
school. Shit..I know that scenario... been there done that. Plus every parent knows their
child (at least the should) and my guy takes his time with stuff so I know that first year or
so at that 50K plus a year school will be wasted.
Bottom line is he will be getting something other than a worthless degree when he ends up
flipping pancakes at an IHOP or waiting on tables at an Applebees. Not to say they are
meaningless/dead end jobs...they are if you spent 100K+ on a degree and STILL HAVE THAT JOB.
Peak Finance •Jan 21, 2017 4:51 PM
I simply don't believe this:
The problem is that unqualified applicants for these openings also are at a record
high. The number of jobs available that are not being filled because the skill set is
absent is at an unprecedented level
I think this is a lie to justify the continuation of immigration and the hateful
damaging H1B program. I remember their bullshit lies from the early 00's , posting want adds
for people with "10 years of Java Experience" when Java had come out like 2 year prior, and
other impossible requests, and then being unable to fill those jobs were allowed to ship in
people from overseas.
Falling Down -> Peak Finance
•Jan 21, 2017 5:00 PM
Correct.
The only real shortages are in certain skilled trades, in certain metros.
i know several people from my parents generation who got jobs in major corporations upon
high school graduation who were hired by the companies for their aptitude and trained into the
skill the comapny needed. a couple were trianed engineers and another a chemist besides pipe
fitter, ironworker and mechanic.
companies don't do that anymore because stockholders won't let them do it. there are some
privately held companies who still do it.
Giant Meteor -> besnook
•Jan 21, 2017 5:27 PM
Companies don't do that anymore because that would step on the toes of the Educational
Industrial Complex gravy train. Professional courtesy is all. Loyalty and human potential is
no longer factored in ... Lets not even get started on the government jerbs ....
Twee Surgeon -> Giant Meteor
•Jan 21, 2017 6:42 PM
A major problem too, is getting past the Human Resources Department in a larger company in
the Productive industries (Machine,Construction,Refinery, etc.)
First you meet the ancient grey goddess with the chains on her eyeglasses and she will direct
you to the Interviewer who will be Jennifer Eye-candy, Kanisha Token-Black or Juan De
Bilingualo, who all have a diploma from a college but know nothing about the industry at hand,
you are more likely to get hired on the Excellence of your new Nike tennis shoes than anything
related to the Skills required for the position.
If you can get past the women in Human Resources and talk to the guy that actually runs the
shop and look each other in the eye and talk about 'Making Stuff', then you might have the
job. That is how that works.
QQQBall -> besnook
•Jan 21, 2017 7:26 PM
besnook. Exactly. not just engineers, but service reps, sales people, etc., that then were
promoted up thru the ranks of the same company. My lady retired from AT&T as a project manager
at like 54 yo.
She was hired after taking a test that only 4 peeps in the room passed. worked her way up -
they had reciprocal/mutually beneficial investments in each other. She is smart and had a
degree from UC here in Kali. Now, no loyalty either way in most cases.
Twee Surgeon -> DrData02
•Jan 21, 2017 6:21 PM
Exactly, people are finding other ways to get by. I'm not sure how many ZH'ers have
experienced the modern non-corporate job market.
Unless you have a .gov job you are pretty much The next disposable android who can be worked
to death and replaced when the bearings are shot or an inconvenience arrives. Employers don't
want to Hire because it's too expensive due to various regulations, taxations and obligations
to the City, State, County and Federal government, all of which are Constantly Expanding and
must pay for the ever increasing pay-roll size and the unfunded liabilities and the pension
plan and the grant for the new skate board park etc, and so on, forever and ever.
It boggles my mind, the kind of bullshit experienced by an acquaintance who is a Waitress, on
top of all the shitty employers and scummy customers, she has to pay taxes on Estimated Tips,
by a Percentage of Transactions regardless of whether she actually Received a Tip.
The
government assumes a tip exists at 8% and the waitress must pay on the assumption or the
business owner gets pissed off because he/she will catch shit from the IRS at Tax time. Black
people only tip on the 29th of February if it is a full moon, a trick they learned from the
cheap Canadian bastards who got the idea from the Asians who also, mostly, do not tip.
An establishment owner selling Beer/ Wine/ Liquor is responsible for the customers action
after leaving the establishment, if they get in a wreck / DUI,
Whatever, and that was all from
Ronald Ray-guns era, the Small Business and Independence messiah. (The Dramm shop Act, I
think, Google has that hidden though.)
That is just the Bar / Restaurant biz. Mc Donalds and the Fast food scam clan are often
getting 50% of an employees wages paid through special programs for hiring recently released
Felons, drug rehab grads and recent immigrants to name a few, so you already paid for half
that burger and fries before you ordered it and Mc Donald is doing quite nicely, thank you.
I could go on into the Construction and Manufacturing realms but life is short.
The Problem
with the USA is the Government, I'm not holding my breath for Trump to make a change, I
remember the song and Dance when Ronny won the White house. Nothing fucking changed for most
people. It just began the Road to Barry Obama and here we are.
Donewithit22
•Jan 21, 2017 5:35 PM
This is only a problem when people start to realize the systems that we have in place are
by nature a ponzi scheme. I partner and I dropped out of the workforce 2011ish. We realized by
the time we paid for health care, which was now mandated, city tax, state tax, fed tax, s/s
tax etc....what was the point of going to work.....
We both have degree and are in our mid 30's.
we sold everything we had bought land and have build a homestead doing most things
ourselves. we do odd jobs for extra cash and we live better , less stress then we used too. we
are going on vacation to Peru in about 3 weeks for 15 days and we often do a few days here or
there just to see the US. We love not being in the labor pool and we are both sorry we didnt
do this sooner.
thisguyoverhere
•Jan 21, 2017 5:38 PM
In the skilled trades there are many former welders, ironworkers, boilermakers and fitters,
over 60 years old, working as consultants. These men (and some women) command high rates, the
respect of their union halls or fellow tradesman because of their body of knowledge and
experience.
Much of that knowledge will not be passed on, will be lost because these experienced 'field
engineers' (the real thing, no bull$hit diploma) are sick of the politics and seeing the
honest labor of skilled workers being siphoned off while some spoiled brat takes a sallary in
'the office'.
I have a degree. I learned more usefull skills in 6 months than 4 years of school.
We have a structural problem within our framework of 'educating' the next generation.
The result, many today have the cultivated tastes, but no capital to purchase the lifestyle.
Son of Captain Nemo
•Jan 21, 2017 5:55 PM
"The problem is that unqualified applicants for these openings also are at a record high.
The number of jobs available that are not being filled because the skill set is absent is at
an unprecedented level - and this was an overriding theme in the latest edition of the Fed's
Beige Book."
Because U.S. corporations would rather spend the time and expense seeking the lowest labor
rate to do the job than retraining an existing workforce that has been dormant or obsolete
because of lack of work or "No work" at all...
This includes bending the rules for H1B and related visas... Even if we have a war on terror
and a Department of Homeland Security we've been waging since 2002 which places "very high
standards" on what moves in and out of the Country since 9/11!
Go figure!!!
Duc888
•Jan 21, 2017 8:03 PM
Speaking specifically of those aged 16 to say......30 Largely unemployable. Lord knows I've
tried to employ a dozen or so in the last few years.
Won't put down the gdamned smart phone.
Don't want to get their hands dirty.
Apparently they've spent so much time pushing buttons on a game controller while growing up
they skipped what young guys have done while growing up in the last 75+ years, you know,
taking shit apart, putting shit back together, screwing it up, modifying shit, putting it back
together a second time and generally learning how shit works.
Complete and total lack of knowledge of the use of common hand tools and rudimentary
pneumatic powered tools.
Absolutely no attention span.
Absolutely no common sense.
See know value in actually learning any skills involved in a trade, they want / need
instant gratification.
Absolutely no critical thinking skills, (If I do this...the likely outcome will be
A._______ B._________ or C.________
They have no training in creating some type of mental flow
chart in their head to have at least some basic predictive skills.}
9. They have more excuses for missing work than any ten guys I knew while growing up.
10. most do not have access to reliable transportation to get to the work site / job.
Seems like the feminization has worked wonderfully.
People are Choosing to Work Part-Time, Why Is that So Hard
for Economic Reporters to Understand?
It is really amazing how major news outlets can't seem to
find reporters who understand the most basic things about the
economy. I guess this is evidence of the skills shortage.
Bloomberg takes the hit today in a piece * discussing
areas where the economy is likely to make progress in a Trump
administration and areas where it is not. In a middle "muddle
through" category, we find "Full-Time Work Is Likely to Stay
Elusive for Part-Timers." The story is:
"Trump has highlighted the number of part-time workers in
the U.S. economy, saying 'far too many people' are working in
positions for which they are overqualified and underpaid.
While the proportion of full-time workers in the labor force
remains below its pre-recession high, it's made up most of
the ground lost during the downturn. But it hasn't budged
much in the last two years, even as the job market has gotten
tighter. Some economists point to the gig economy as the
driving force (pun intended) behind part-timers. Others see a
broader shift in the labor market that's left many workers
stuck with shorter hours, lower wages and weaker benefits."
Okay, wrong, wrong, and wrong. In its monthly employment
survey (the Current Population Survey - CPS), the Bureau of
Labor Statistics asks people whether they are working more or
less than 35 hours a week. If they are working less than 35
hours they are classified as part-time. The survey then asks
the people who are working part-time why they are working
part-time. It divides these workers into two categories,
people who work part-time for economic reasons (i.e. they
could not find full-time jobs) and people who work part-time
for non-economic reasons. In other words the second group has
chosen to work part-time.
If we look at the numbers for involuntary part-time
workers, it dropped from 6.8 million in December of 2014 to
5.6 million in December of 2016. That is a drop of 1.2
million, or almost 18 percent. That would not seem to fit the
description of not budging much. Of course Bloomberg may have
been adding in the number of people who chose to work part,
which grew by 1.4 million over this two year period, leaving
little net change in total part-time employment.
Of course there is a world of difference between a
situation where people need full-time jobs, but work
part-time, because that is the only work they can find and a
situation in which people work part-time because they don't
want to spend 40 hours a week on the job. Most of us would
probably consider it a good thing if people who wanted to
spend time with their kids, or did not want to full time for
some other reason, had the option to work part-time. This is
what in fact has been happening and it has been going on for
three years, not two.
Come on Bloomberg folks -- did you ever hear of the
Affordable Care Act (a.k.a. "Obamacare")? As a result of
Obamacare workers are no longer dependent on employers for
health care insurance. This means that many people have opted
to work part rather than full time. This has opened up full
time jobs ** for people who need them, even though it has
left total part-time employment little changed.
In total, the number of people involuntarily working
part-time has fallen by 2.2 million since the ACA has been in
effect, while the number choosing to work part-time has risen
by 2.4 million. The sharpest increase in voluntary part-time
employment has been among young mothers *** and older workers
**** just below Medicare age.
It is really incredible that this shift from involuntary
part-time to voluntary part-time is not more widely known. It
is a very important outcome from the ACA.
My impression here is that in this particular issue Dean
Baker is out of touch with reality.
Question: how many people in this 1.2 million drop because
they retired at 62 forced to take a half of their SS pension,
or left workforce?
Also, can you consider Wal-Mart or Shop Right cashier
working 36 hours for $7.5 an hour and without any benefits
(as he/she can't afford them) fully employed.
Single mothers are probably the most important category to
analyze here.
This is an example of how the libertarian and Republican
conceptions of liberty and freedom are so off the mark.
When people can afford to work part time instead of full time
to do things like raise children, attain higher education or
start companies, that is freedom. When the inaccessibility of
health insurance forces them to work full time when they
would otherwise prefer not, that is not enhanced freedom.
Julio
-> Peter K....
The main argument I've heard/read
against UBI is that getting money without working is immoral and it should be "to everyone according
to his work".
Aside from the obvious contradictions here (we accept heirs getting money without
working; and how do you measure anyone's work anyway?), I think this makes an assumption that
everything we have is what we produce.
The fact is that most of what we have is inherited collectively. Even the most successful "job
creator" types like Steve Jobs inherit a gigantic cart that they move a few inches forward.
This is not just concrete material wealth, but institutional wealth also, which we all contribute
to continually. Every person that wakes up in the morning and accepts that problems with his neighbor
should be resolved in court and not with a gun, is contributing to maintaining that inheritance.
From this perspective, a UBI that reflects your country's wealth is an inherited right.
This unstated assumption underlies many of our current debates. E.g. why does an American worker
have the right to a Us-standard wage?
"... Rising inequality, an unfair political system, and a government that spoke for the people while acting for the elites after the 2008 financial crisis created ideal conditions for a candidate like Donald Trump. American leaders who have mismanaged the process of globalization have only themselves to blame for the coming era. ..."
"... Obama/Reid/Pelosi set the table for Trump... ..."
..."Rising inequality, an unfair political
system, and a government that spoke for the people while acting for the elites after the 2008 financial
crisis created ideal conditions for a candidate like Donald Trump. American leaders who have mismanaged
the process of globalization have only themselves to blame for the coming era."
You may be right...but here's
a more damning quote directly from Stiglitz' piece:
"US President Barack Obama saved not
only the banks, but also the bankers, shareholders, and bondholders. His economic-policy team
of Wall Street insiders broke the rules of capitalism to save the elite, confirming millions
of Americans' suspicion that the system is, as Trump would say, "rigged."
She is
right. You were dishonest or mistaken about attributing it to Stiglitz. The authors don't write those little summation paragraphs at the beginning.
"... students schooled in Home Econ would cast a jaundiced eye on financing a six-figure college expenditure with debt bearing exceedingly onerous terms. College debt is precisely the sort of scam that well-prepared young people learn to take a hard-nosed look at. ..."
Your practical insights used to be imparted to high school students in Home
Economics.
But Home Econ sounded too, errr, blue collar to the aspirational upper
middle class. As well,
students schooled in Home Econ would cast a
jaundiced eye on financing a six-figure college expenditure with debt bearing
exceedingly onerous terms. College debt is precisely the sort of scam that
well-prepared young people learn to take a hard-nosed look at.
So for the greater good of all, Home Econ had to be phased out, so that its
subversive truisms would not interfere with the vital missions of higher
education and consumer upselling.
May not be married but what % are living at home or with roommates? So
people are still cohabitating to reduce overhead.
I wouldn't pick up something by a dumpster, but I frequent thrift stores and
estate/yard sales. Once I'm done with my thrift store clothes, they get
recycled to other projects. Can even cut small strips to tie up peas and beans
in the garden.
I agree with the no debt. Don't do it or you're screwed. I have two kids .
we've been very clear, come to us before hand, we'll help if we can, otherwise
you go without and if you ever do debt, you're on your own.
Of course, we told both adults not to marry like us. They both did. One
ceremony at a park the other signed papers at our house but no
parties/weddings. We've made clear we can't afford kids. One has one kid, the
other is considering it.
Managing money, house repairs, land mgmt etc are all electives. Very few
take them.
"... "A lot of the inequality in the U.S. comes from rent seeking. It comes from firms and industry seeking special protection or special favors from the government To the very considerable extent that inequality is generated by rent seeking, we could sharply reduce inequality itself if rent seeking were to be somehow reduced." ..."
"... "In all areas of economics, the rules of the game are critical-that is emphasized by the fact that similar economics exhibit markedly different patterns of distribution, market income, and after tax and transfers income. This is especially so in an innovation economy, because innovation gives rise to rents-both from IPR and monopoly power. Who receives those rents is a matter of policy, and changes in the IPR regime have led to greater rents without having any effects on the pace of innovation," said Stigltz. ..."
"... Other than the loss of income, he said, "many men in the Rust Belt in Appalachia have lost meaningful work and are unable to find another. People want work that provides them with some agency-they want a chance to prosper, to have the satisfaction of succeeding in something. They would also appreciate the experience of developing in the course of a career, to have self expression through imagining and creating new things. The good jobs in manufacturing offered these men the prospect of some learning, some challenges, and some attendant promotions. The bottom-rung jobs in retailing services that these men are forced to take do not. In losing their good jobs, then, these men were losing the meaning of their very lives. The rise of suicide and drug related deaths among Americans might be evidence of just that sense of loss." ..."
"... The last four decades of slow growth in the U.S., said Phelps, fit Alvin Hansen's definition of secular stagnation "to a tee." Phelps traced the roots of this secular stagnation, characterized by slower growth and loss of innovation, to a "corporatist ideology that had come to permeate the government at all levels" starting with the 1960s, and has "replaced the individualist ideology supporting capitalism" ever since. ..."
"... The gap between the elite professionals and the heartlands is so wide than only someone with unimpeachable credentials like his might penetrate their Panglossian bubble. ..."
"... I am not optimistic that the greed can be punctured ..."
"... Honestly, greed might just be so thoroughly baked into the makeup of base instinct that it is unreachable. My Father reminds me regularly that males are intrinsically sexually competitive, which drives them to acquire territory, resources, and access to females at whatever the cost. To ask humans not to be greedy is to be tinkering with deep biological drives tied to successful reproduction. ..."
"... The last thirty years have been all about "firms and industry seeking special protection or special favors from the government" while everyone has been talking about the opposite thing, "free markets". Why has it taken so long to notice this? ..."
"... "Eat People" ..."
"... The elites should worry the day when the mob turns from destructive introspection, to directed agency at an external foe. That foe being the rent seekers and economic manipulators of injustice. Propaganda and monopoly violence don't last forever, and the hysterical response of the bourgeoisie to this possibility is what we are witnessing. ..."
Trump's
unexpected Presidential win appears to have delivered a wake-up call to the economics discipline.
At a major industry conference, the annual Allied Social Sciences Associations meeting, a blue-chip
panel of four Nobel Prize winners, Angus Deaton, Joe Stiglitz, Roger Myerson and Edmund Phelps, was
in surprising agreement that capitalism had become unmoored and in its current form was exacerbating
inequality. These may seem like pedestrian observations, but the severity of the critique,
as reported in the Pro-Market blog , was striking.
No video of the panel is available yet; I hope one is released soon and will post it if/when that
happens.
Tellingly, even though the panelists also included a fall in innovation, globalization and secular
stagnation as contributing to inequality, the discussion focused on rent-seeking.
Deaton was blistering by the normally judicious standards of the academy. Recall that he and his
wife Anne Case performed the landmark study, published at the end of 2015, that showed that
the death rate had increased among less educated middle aged whites, due largely to addiction and
suicides . Thus the plight of economic losers is more vivid to Deaton than his peers, and he
sees the disastrous human cost as a direct result of rent-seeeking and untrammeled monopolies.
Key extracts :
"A lot of the inequality in the U.S. comes from rent seeking. It comes from firms and industry
seeking special protection or special favors from the government To the very considerable extent
that inequality is generated by rent seeking, we could sharply reduce inequality itself if rent
seeking were to be somehow reduced."
While some forms of inequality could be linked to progress and innovation, said Deaton, inequality
in the U.S. does not stem from creative destruction. "A lot of the inequality in the U.S. is not
like this. It comes from rent seeking. It comes from firms and industry seeking special protection
or special favors from the government," he said.
Deaton highlighted a particularly salient example of rent seeking: the American health care
system which, he said, "seems optimally designed for rent seeking and very poorly designed to
improve people's health."
Deaton outflanked Stiglitz on the left. Stiglitz argued that taxes could help reduce inequality,
in concert with other policies to curb rent extraction:
"In all areas of economics, the rules of the game are critical-that is emphasized by the fact
that similar economics exhibit markedly different patterns of distribution, market income, and
after tax and transfers income. This is especially so in an innovation economy, because innovation
gives rise to rents-both from IPR and monopoly power. Who receives those rents is a matter of
policy, and changes in the IPR regime have led to greater rents without having any effects on
the pace of innovation," said Stigltz.
Deaton begged to differ:
"I don't think that rent seeking, which is incredibly profitable, is very sensitive to taxes
at all. I don't think taxes are a good way of stopping rent seeking. People should deal with rent
seeking by stopping rent seeking, not by taxing the rich," he said.
Deaton is clearly outraged by how opiate manufacturers (meaning Purdue Pharma) have profited by
killing poor whites:
"There are around 200 thousand people who have died from the opioid epidemic, were victims
of iatrogenic medicine and disease caused by the medical profession, or from drugs that should
not have been prescribed for chronic pain but were pushed by pharmaceutical companies, whose owners
have become enormously rich from these opioids," said Deaton, who later advocated for a single-payer
health care system in the U.S., saying: "I am a great believer in the market, but I think we need
a single-payer health care system. I just don't see any other sensible way to address it in this
country."
Mind you, the Case/Deaton study, despite its shattering findings, got front page treatment and
then the press and pundits moved on to the next hot news tidbit. Matt Stoller had a tweetstorm yesterday
on this issue, related to the impending revamping, which almost certainly means further crapification,
of Obamacare. You can read the whole tweetstorm staring
here . These were the linchpin of his argument:
... ... ...
Edmund Phelps, who leans conservative but is know for being eclectic, echoed Deaton's observations:
Other than the loss of income, he said, "many men in the Rust Belt in Appalachia have lost
meaningful work and are unable to find another. People want work that provides them with some
agency-they want a chance to prosper, to have the satisfaction of succeeding in something. They
would also appreciate the experience of developing in the course of a career, to have self expression
through imagining and creating new things. The good jobs in manufacturing offered these men the
prospect of some learning, some challenges, and some attendant promotions. The bottom-rung jobs
in retailing services that these men are forced to take do not. In losing their good jobs, then,
these men were losing the meaning of their very lives. The rise of suicide and drug related deaths
among Americans might be evidence of just that sense of loss."
The last four decades of slow growth in the U.S., said Phelps, fit Alvin Hansen's definition
of secular stagnation "to a tee." Phelps traced the roots of this secular stagnation, characterized
by slower growth and loss of innovation, to a "corporatist ideology that had come to permeate
the government at all levels" starting with the 1960s, and has "replaced the individualist ideology
supporting capitalism" ever since.
Even though the panelists disagreed somewhat on remedies, all were troubled by Trump's policy
proposals However, it's still telling that even if protectionism might not be a great remedy (or
would have to be applied surgically to yield meaningful net gains, something Trump's team appears
unwilling to game out), the group seemed constitutionally unable to accept that globalization had
made the working classes in the US worse off even when that is exactly what the Samuelson-Stopler
theorem predicted. For instance:
Phelps, for instance, criticized Trump's assertion that job and income losses among the American
working class were caused by trade and not by losses of innovation, and the President-elect's
"assumption that supply-side measures to boost after-tax corporate profits will bring generally
heightened incomes and employment to America," which he said runs the risk of explosion in public
debt and a deep recession.
The most hazardous, said Phelps, "is the assumption that by bullying corporations, such as
Ford, and stepping in to aid other corporations, such as Google, the Trump administration can
achieve various objectives that will widely boost employment."
Nevertheless, the very fact that a panel like this didn't even dispute the claim that rent-seeking
was the biggest contributor to the big jump in inequality is in and of itself a big step forward.
I wish Deaton would go a speaking tour of wealthy Democratic Party enclaves or become regular
on NPR (assuming the tote-bag carrying classes did not swiftly demand his removal). The gap between
the elite professionals and the heartlands is so wide than only someone with unimpeachable credentials
like his might penetrate their Panglossian bubble.
The gap between the elite professionals and the heartlands is so wide than only someone
with unimpeachable credentials like his might penetrate their Panglossian bubble.
Either these words, although I am not optimistic that the greed can be punctured, or class
violence, coupled with a decline and fall of Continental empire.
The US is the only remaining 19th century empire, all the others have fallen to self-determination,
and the EU appears to be falling apart for the same reasons.
I am not optimistic that the greed can be punctured
That is it in a nutshell. Greed. One destructive emotion has been elevated as the guiding principle
for our Western societies. The fail is baked into the cake. We are monkeys with nuclear weapons
and Donald Trump is the new leader of the Free World™. What could possibly go wrong?
Jane Goodall reported on a chimp who hit on the novel tactic of banging fuel cans together
to achieve alpha status. The noise scared his competitors witless. He didn't know what the cans
were, what they were for, or what they held, but it worked anyway. For a little while.
Honestly, greed might just be so thoroughly baked into the makeup of base instinct that it
is unreachable. My Father reminds me regularly that males are intrinsically sexually competitive,
which drives them to acquire territory, resources, and access to females at whatever the cost.
To ask humans not to be greedy is to be tinkering with deep biological drives tied to successful
reproduction.
Except we have millions upon millions of individual instances of US men over whom greed holds
no power, and scores of historical societies and even today a handful of countries so constituted
and evolved over time that there simply is no comparison on a scale of 'greed' with what goes
on in the US.
Greed obviously has a biological basis, as does everything else humans do, but culture
is quite capable of virtually erasing it.
But if you guys find a copy of this panel, also mentioned in the pro market article, please
post it.
"The Vested Interests Versus Rational Public Policy: Economists as Public Intellectuals,"
Stiglitz and Baker, along with James K. Galbraith of University of Texas at Austin, Stephanie
Kelton from the University of Missouri-Kansas City, and Lawrence Mishel from the Economic Policy
Institute discussed competition, trade, consumer protections, and how to reach effective public
policy. "We need to rewrite the rules of the market economy," said Stiglitz during the same
panel.
The last thirty years have been all about "firms and industry seeking special protection or
special favors from the government" while everyone has been talking about the opposite thing,
"free markets". Why has it taken so long to notice this?
Very effective propaganda and a complicit MSM. I will say it again: spend a day or two at any
statehouse in the country and you will see that the ENTIRE business of government is doing favors
for business people and their lobbyists. The notion that business people are in favor of small
or non-activist government is a big lie.
Which gets to a point that seems to get glossed over even by the better economists – that corporate
"investment" in lobbying generally has a way better ROI than real investment, often times on the
order of 1000-to-1 (for specific tax breaks).
I don't get what Deaton is saying about rent-seeking. Surely the return of the 90% tax bracket
for high incomes and estates would put a dent into modern rent-seeking. When he says, "People
should deal with rent seeking by stopping rent seeking, not by taxing the rich," what kind of
policies is he talking about? Does he mean single payer, and extended that kind of economic organization
to other industries? Once you get outside health care, that seems kind of radical for an economist.
The Mississippi Delta is just north of where we live. The "rent seeking" is mixed up with Paternalism.
Each feeds off of the other. What we have seen in our multi year search for affordable living
space has been an unending stream of overpriced habitats, and insularity.
The Paternalism encourages
an ethos of exploitation, the rent seeking finances it. At root, all these "base" motivations
are "rational." Thus, any "rational" critique undergirds the edifice of selfishness.
A corollary
of this is that any significant change requires a clean break with the past. An irrational ideology
needs must arise, if only for long enough to nurture a radical change. As with the present American
experience, an absurd excess is needed, and is looming. It sounds hardhearted, but a cleansing
fire must purge the dross from out the gold of the nations soul. Before we allow horrified sentiment
to deter us from this course, we must remember that the present system is itself the embodiment
of hardheartedness. Why else do many cultures have a myth of a Phoenix in their socio-cultural
tool kit? It has happened before. It will happen again.
As someone more erudite than myself likes to say; "Kill it with fire."
My only worry is that when mainstream economists start accepting the problem of rent seeking,
their solution is usually 'better, freer markets'. Its this logic which did so much damage to
the national electricity networks of Europe and the UK railway system and (my personal bugbear),
the domestic waste collection system in Europe. There is sometimes a fine distinction between
highly regulated markets which benefit both private companies and the consumer (for example, in
electricity generation and distribution), and manipulated regulated markets which benefit only
the seller, such as with medicines.
Plus, from what I am gathering from the summary, statements about how it was innovation that
destroyed jobs and not globalization seem to ignore the fact that the retraining and skills reeducation
that's supposed to happen after "disruption" has become rent seeking.
Education has become a massive, government controlled, rent seeking operation in the form of
student loans. Anyone seeking to better themselves with education now has become a victim.
Are taxes going to solve that, according to Stiglitz? As you say, is it going to be a "freer
markets" solution? I don't know.
Innovation destroyed jobs because Silicon Valley investors realized that corporations would
pay HUGE dollars for new processes that eliminated people. Human labor is an enormous cost, not
just in wages but in support (that useless HR team), benefits, and worst of all – pensions. The
goal of the modern corporation is to reduce head count, not to make better and more innovative
products/services. Once the investment community clued in on that, it was all about finding new
ways to eliminate jobs.
Andy Kessler's book "Eat People" is all about this topic.
I'm not an economist but even I can see that trade can increase average income while decreasing
incomes at the bottom of the distribution. Am I missing the point or are the Nobel laureates missing
it?
Do they think that some new industry will appear by magic to fill the void?
Wow! If this is what it takes to capture the attention of the American elites then I think
this society needs to think really hard about what's up with it.
I wish Deaton would go a speaking tour of wealthy Democratic Party enclaves or become regular
on NPR (assuming the tote-bag carrying classes did not swiftly demand his removal). The gap
between the elite professionals and the heartlands is so wide than only someone with unimpeachable
credentials like his might penetrate their Panglossian bubble.
You are never going to get the 10% to admit that their lifestyles are not possible without
the underlying economic conditions described at this website. All you have to do is look at Massachusetts
and see what "liberalism" has become there to understand this. The NIMBYism is rampant, and the
isolation of minorities and people of other classes is so obvious that no one can deny that it
happens. Most of the employment is so dependent on the rent seeking (Education, Biotech and Pharma,
Technology, Medical) that there is no way that they could be convinced of another way.
I believe you are right and the hysteria after the recent election demonstrates this resistance
to change (even if in the current case it may turn out to be bad change). The whole rationale
of our so-called democracy is to allow change at the top without resorting to violence which is
why attacks on the democratic process itself are the most sinister. Therefore the most interesting
story of 2016 may not be the dreary two year slog itself but what happened afterwards. One comes
to suspect that large portions of the "progressive" left have even less interest in democracy
than the Republicans do. If only those pesky proles could be kept down the comfortable middle
class of Boston could rest easy.
It's probably true that only when those middle class professionals themselves start to feel
economic pain that we will see more enthusiasm for leveling and social cohesion. A crash in the
stock market might do it or–god forbid–riots and chaos but it doesn't seem like there's a painless
way out.
Deaton highlighted a particularly salient example of rent seeking: the American health care
system which, he said, "seems optimally designed for rent seeking and very poorly designed
to improve people's health."
There is rent seeking even within sectors. Yesterday's Links had an article about large layoffs
at one of the premier academic cancer centers, driven by losses due to overruns in implementing
an electronic health records system.
Sh*t flows to the bottom and money floats to the top.
The elites should worry the day when the mob turns from destructive introspection, to directed
agency at an external foe. That foe being the rent seekers and economic manipulators of injustice.
Propaganda and monopoly violence don't last forever, and the hysterical response of the bourgeoisie
to this possibility is what we are witnessing.
We need a new term or word for the class of people dedicated to the spread of inequality. The
terms bourgeoisie, corporatists, capitalists, and fascists have been rendered ineffectual in raising
the consciousness of working people to their plight. Occupy brought the 1% into consciousness,
but there still is a lingering faith that somehow the business community can provide the necessities
for a good life, if only "something" can be done to "free" their creative potential. My take on
the Fake News phenomenon is yet another phase to keep the working population even more confused
and misdirected. It is a strategy to double down on propaganda. Propaganda questioning the validity
of propaganda.
In America, the psychic health of the nation is coming into question. Leadership that can provide
a vestige of calm amid the rising storm brought about by economic uncertainty will easily gain
followers. The crisis of leadership is daily becoming more acute.
Maybe a better strategy would be to come up with a new term for the 80% ruthlessly exploited
by the current system. A new term is needed because all others have been corrupted into impotence.
"In American, the psychic health of the nation is coming into question."
We are confused, in denial, projecting furiously Freud would have a field-day exploring our
cognitive dissonance. All this 'fake news' has begun to undermine our vision of ourselves as 'the
exceptional nation;' our mental pictures of soldiers handing out candy bars to starving child
refugees have morphed into drone operators taking out toddlers at wedding parties.
We have elders preaching the American virtues of 'self reliance,' 'personal responsibility,'
and the dangers of being coddled by an inefficient nanny state, while enjoying the benefits of
a guaranteed monthly social security check deposited into their bank accounts, and having their
hip replacements and open heart surgeries paid for by Medicare.
We are still entranced by our national narrative of 'go west, young man,' with acres of fertile
prairie and lush coastal valleys ours for the taking; all we need to follow is our sacred 'work
ethic' and success will be ours. Well, all the land is posted 'Private' and the water is in the
process of being purchased by faceless corporate entities. And the native Americans, whose land
we stole, are pissed and getting organized.
Spot on, Norb. We need new words, a new national narrative, a new vision of where we are, what
crimes we committed to get here, how we have managed to bring the planet to the brink of destruction
and, finally, how we can salvage what remains and forge a new identity, a better and more sustainable
story.
Until then, the next few years (decades?) will be messy. But filled with promise.
for all of the Media/Academia Left's obsession w/identity politics, the issues facing poor,
rural African-Americas are forgotten and "uncool" to address-just as with Appalachian whites.
Over several months many commenters have said something like the following: there can't be
any real deflation because prices keep going up. Food, health care, rents, etc. If there's deflation
why aren't prices coming down?
My opinion is you can have real deflation *and* increasing prices at the retail level if those
prices are determined by monopoly pricing power – price jacking and uncontrolled rent seeking,
which is what I think we have now. Iinstead of lowering prices for the little guy deflation increases
the profits for the monopolists and rentiers through lowered base costs for them coupled with
higher selling prices for customers, plus fees and other purely extractive costs. Monopolists
and rentiers have deformed various markets in a way such that deflation *and* higher selling/access
prices can co-exist, imo.
Longer comment lost in modland. Shorter: It's possible to have both deflation and rising sale
prices if monopolists and rentiers are setting the sale price. imo.
I keep hearing the idea that innovation can provide jobs: algorithms and robots consume many
more than they produce, AI is taking jobs from insurance agents in Japan, all seem to point the
other way. So the response is a basic minimum income, but with so much wealth off shored to tax
havens and the rest building bombs to replace the ones being dropped daily, where do the experts
see the money coming from? Sooner or later the mass' will have to stop buying the glossy widgets
which pays for the yachts and mansions.
Yves, thanks very much for this. Speaking for myself, I'd really appreciate more posts/guest
posts on this and related topics.
I'm currently reading Joe Bageant's Deer Hunting with Jesus, which addresses the desperation
of small-town northern Virginia – I knew Bageant's work (had read his essays), but the book is
great. Separate chapters, btw, on the mortgage scam in his hometown (for trailers, for heavens'
sake) and on the health care system and how that's working out in rural Virginia (it's not, and
it's a national disgrace).
It riffed off a piece by some person called Ben Shapiro, who was venting about health care
being a consumer product (he compared it to buying expensive furniture). I think I finally realized
that there are some people whose understanding of the value of human life and the basic rights
of man differ so much from my own that the divide cannot be bridged, ever. (He also sort of compared
sb who needs medical treatment but can't afford it to stealing bread. Made me wonder if he and
his physician-wife had recently caught a production of Les Miserables.) I was so appalled at his
thinking I couldn't even comment on the post.
I can't see how rent-seeking is to be reduced given the incoming regime, which appears to me
to be filled with rent-seekers of the highest order.
It's heartening to see renowned economists identifying these issues (poverty/unemployment/increasing
morbidity-mortality rates) as a genuine crisis – which it is, and it's only going to get worse;
in a few years, it won't be the lower and middle classes that are affected, but the white-collar
professional classes as well (i.e. the top 10%).
But as my Dad used to say, it's somehow "a day late and and a dollar short" – the Dems should
have been addressing this crisis years ago – if a humble citizen-observer like this commenter
saw it as a serious issue ten years ago, why didn't the professional policy guys?
I wouldn't just credit the Trump candidacy for shining the light on rent seekers, but kudos
to Yves for hosting economists who have also done this, among them Michael Hudson and (to a lesser
degree) Bill Black.
At the risk of seeming un-intellectual, I confess to having been also enlightened by library
reading the works of John Grisham – his theme is often how lawyers profit or do not profit from
big pharma medications that are introduced with great fanfare only to be discovered as the cause
of injury and/or death a few miles down the road. At which point the victims are rounded up by
low-income lawyers seeking a big windfall. One only has to be aware of certain tv commercials
to realize this is still happening, and it happens to low income people for the most part. In
the novels they are always the ultimate victims, no matter what the outcome of the lawsuits. The
money changes hands, but the poor get shafted.
juliana – I like Grisham a lot, too; the fact that he is himself a native of the "poor south"
(Arkansas, Mississippi) lends a gritty realism to his novels. More members of the credentialed
classes should read him, maybe they'd understand what's happening in the heartland better.
I've never much cared for his legal thrillers, but I was really impressed by his semi-autobiographical
novel, "A Painted House" set in rural east Arkansas in the 50s. My mother was from a small farm
in that area and I grew up not far away in Memphis and visited east Arkansas often as a kid in
the 50s and 60s. I am Grisham's age and the novel was spot on in my experience
Thinking out loud here, so take with a grain of salt: could IPR-related rents be fixed by switching
the "carrot" from monopoly on the IP to tax credits? Instead of "You are the only one that gets
to sell this for X years, unless others pay you a fee," the creator of the IP gets a tax credit
equal to a certain % of sales and/or profits that others make from use of said IP. This would,
of course, be a non-transferable right to the credit; some company cannot come along and buy it
out from the creator, nor can it be passed along to next of kin. Creator gets compensation, consumers
avoid the artificial rent cost, and by opening up the IP to the market, competition and refinements
can begin immediately.
shorter: current Bangladesh life expectancy is: males – ~ 70, females – ~73, total – ~71, world
rank – 99th.
The declining life expectancy for too many rural US populations, especially for females, is
caused by increased deaths in the 45-55 age range. Fewer are reaching the age of 60 or 70. Ergo,
these areas have lower than Bangladesh's overall life expectancy. These early US deaths are numerous
enough to lower the overall life expectancy of the US cohort, which is shocking.
adding: while the lowered overall US life expectancies are still above overall Bangladesh's,
in US counties with these large increased death rates in the 45-55 age cohort the the counties
life expectancy is lower than Bangladesh. There are so many of these US counties and such a large
percentage of the population that the overall US life expectancy has tilted down.
I suggest reading 'Deep South' by Paul Theroux for a scorching look at the day-to-day life
of the denizens of this area. That it might, in some areas, be compared to the 'Third World' is,
tragically, a compliment. How can these conditions exist in the richest country in the world?
And how can one be an American and tolerate this?
What were the economic conditions in Cambodia prior to Pol Pot and the killing fields? I'm
too young, but I that seemed to be a more modern tail of the 90% taking out the top 10%.
There has to be some shred of truth to drive people to eliminate an entire swath of their population
along economic lines only.
But the term "rent seeking" doesn't have much punch. To a moderately well educated reader,
It sounds like something we would all do in a "capitalistic" system and therefore, in some sense,
rational, and exempt from the jaundiced, deep consideration it deserves.
I believe that much of what ails us in the larger effort to make changes in (what's left of)
the Republic, is our more or less universal aversion to using the proper vocabulary to address
how one goes about "rent seeking," which is to engage in wholesale, long term and systematic bribery
of public officials who can (and will) enshrine our sought for "market" advantages.
When did "bribery" morph into "campaign finance"? There may have been a time and place in American
history when there could be fine distinctions, maybe even legitimate distinctions, drawn between
the two, but today? Any trip to "the Hill" or our state legislatures, to advocate for a policy
or law-unsupported by a major league checkbook-will convince a person that the Congress, etc.
has devolved into a massive "system" for soliciting money in exchange for agreeing to vote against
the public interest.
In short, I'd like to advocate that we bring back bribery into the "civic lexicon." The sooner
the better.
In a post-Reagan/Bush environment the third way Democrats simply adopted what seemed moderate
in relation to the zeitgeist. The failure of all those poor rural people to pick up and move to where the jobs were is a
choice which they must have rationally assessed the cost/benefit of and made decisions as autonomous
adults.
Their failure to educate and train for the jobs of the future was a choice. They were warned.
Like we are being warned now that we are redundant or soon to be, replaceable by peasants from
abroad or algorithms at home. I don't think we are going to get the Star Trek economy. I think we are getting the Logan's
Run, Aldous Huxley, Eloi vs. Morlock economy.
Today Jared Bernstein (see sidebar on right of this blog)
questions Paul Krugman's sudden concern about crowding
out. I agree.
In the first place, conditions have not
changed drastically in the last two months. Krugman's
would have more credibility on this subject had he voiced
similar concerns at any point before the election. I don't
remember him having any problems with Hillary's
infrastructure spending plan for example.
Also, looking at two of my favorite metrics for
underemployment -- Not in Labor Force but Want a Job Now,
and Part Time for Economic reasons -- are each about
1,000,000 above their numbers in the late 1990s and the
2005-06 peaks. Since the jobs situation is clearly
decelerating from its peak two years ago, I do not believe
this 2,000,000 shortfall is ever going to be filled before
the next recession.
In short, I really don't see the basis for a "crowding
out" argument at this time.
If we are below full employment (I think we are in part
for reasons you note) then concerns about crowding out are
indeed premature. But if we were at full employment (again
I have my doubts) then this issue should be part of (not
the end all) policy discussions.
A new study
published by the McKinsey Global Institute estimates the
U.S. holds between 54 million and 68 million "independent
workers," which it defines as "someone who chooses how
much to work and when to work, who can move between jobs
fluidly and who has multiple employers or clients over the
course of the year." It includes individuals working on
short-term contracts and those who rent or sell goods and
services.
"A full-time job with one employer has been considered
the norm for decades, but increasingly, this fails to
capture how a large share of the workforce makes a
living," the report said. "Digital platforms are
transforming independent work, building on the ubiquity of
mobile devices, the enormous pools of workers and
customers they can reach and the ability to harness rich
real-time information to make more efficient matches." ...
To me the "crowding out" argument put forward by Krugman
and conservative economists demonstrates a bias against
the government. They want monetary policy not fiscal
policy to be the means by which investment and employment
levels are managed by the government.
J.W. Mason has
interesting blog post about the Zero Lower Bound.
"In the dominant paradigm, this is a specific technical
problem of getting interest rates below zero. Solve that,
and we are back in the comfortable Walrasian world. But
for those of us on the heterodox side, it is never the
case that the central bank can reliably keep output at
potential - maybe because market interest rates don't
respond to the policy rate, or because output doesn't
respond to interest rates, or because the central bank is
pursuing other objectives, or because there is no
well-defined level of "potential" to begin with. (Or, in
reality, all four.) So what people like Gourinchas and
Rey, or Paul Krugman, present as a special, temporary
state of the economy, we see as the general case.
One way of looking at this is that the ZLB is a device
to allow economists like Krugman and Gourinchas and Rey -
who whatever their scholarly training, are aware of the
concrete reality around them - to make Keynesian arguments
without forfeiting their academic respectability."
What's shocking to me is that, according to 'liberal'
economists like PK and pgl, the goal of monetary and
fiscal policy is not just full employment but rising real
wages.
So far the economy has somehow managed to reach
low unemployment, though nowhere near maximum employment
(the Fed's mandate.) And real wages, except for
supervisory personnel, have yet to show real growth.
Nonetheless PK and pgl want to preempt any move to
maximum employment and rising real wages by advocating
that Trump avoid any fiscal stimulus!!!
Methinks that these 'liberals' are really conservatives
in sheeps clothing...or maybe working in New York has
given them too close an affinity to the Wall Street
worldview.
The common thread between your comment and Peter K's, I
think, is that there is intelligent deficit spending and
then there is counterproductive deficit spending.
It's
pretty clear that significant infrastructure spending,
like the building of canals in the 19th century (because
water transportation is so cheap in terms of energy
needs), doesn't crowd out, because of all of the growth it
produces. On the other hand, if government just gives away
money that will be parked unproductively, that will tend
to crowd out.
The bottom line is that Krugman's concern is premature.
There may be a hidden agenda, of course, that his real
concern is that the GOP wants big deficits in order to
"starve the beast" and attempt to justify cuts in programs
like social insurance.
Exactly. I prefer Bernie's approach: work with Trump if he
wants to improve the lives of ordinary Americans, oppose
him if he simply wants to enrich the wealthy.
Stimulus
that boosts employment and wages is still needed. Opposing
any stimulus now is not appropriate.
I expect enough Democrats will be readily available to
assist Trump. If not, there are parliamentary procedures
that can be used...procedures that Democrats refused to
sully themselves using for the common good.
"if government just gives away money that will be parked
unproductively, that will tend to crowd out."
I guess I
agree with you that government or private investment has
to be judged on the merits of each case.
But just look at the epic housing bubble. It would have
been better if the government had taken that money and
just gave it out to the average citizen to spend.
I think Krugman is basically lobbying for the Fed to
Volckerize any potential positive economic impact of Trump
spending with a big anti-inflationary rate hike, which he
& his party cronies can then blame on crowding out and the
"market" response to excessive government borrowing. They
want a quick hard recession that they can use to win
Congress in 2018. Remember that the orthodox BS about
monetary policy is that the Fed doesn't in any way set,
determine or engineer rates, but just uses
anti-price-stickiness nudges to help the market achieve
the "neutral" equilibrium rate rate it is in some sense
"trying" to get to on its own. So, if the Fed trashes the
economy, they & Krugman will say its hands are clean.
Remember:
1. Krugman is a party hack in the first place;
2. Krugman represents the faction of the party that has
no solid ideas about how to fix what is wrong with our
country and our planet; so they can only succeed
politically if the other side fails worse;
3. Krugman is on record as believing that the US has
suffered something like a coup engineered by a conspiracy
between the FBI and Vladimir Putin. So at this point,
given the politically extreme circumstances he thinks
prevail, there is no reason to think he is beyond making
things up for the cause, as exigencies require.
Of course you are right, Krugman advocates different
economics depending on whether a Democrat or Republican is
in office.
But I am not strongly against the idea of the
Fed raising rates too quickly, despite the morale
shadiness of the idea.
They seem intent on doing it anyway even if Hillary had
won.
Yes ultimately I guess I would be in favor Yellen
"helping" Trump (or low wage workers) as Trump regularly
accused her of doing for Obama during the campaign.
It would improve workers' bargaining power and lives.
But a Republican loss in 2018 would also help.
Hobson's choice. Pick your poison.
More fundamentally, I think Krugman is pushing a
conservative view of economics which happens to line up
with mainstream academic economics.
"More fundamentally, I think Krugman is pushing a
conservative view of economics which happens to line up
with mainstream academic economics."
Yes, this is a real
problem. Krugman has a fundamentally conservative ("New
Keynesian") view of the economy and how it should work.
It's a free enterprise & market economy that generally
just needs some helpful stimulatory nudges from the
government: monetary nudges most of the time; fiscal
nudges when we're in the special circumstances of a
liquidity trap.
The problem is that by laying down all of these
orthodox, conservative markers, our ability to do anything
truly dramatic and socially innovative is damaged over the
long haul.
New Keynesianism was neither Keynesian
nor New Classical, but somewhere in between the two. It
modified the New Classical approach based on rational
expectations and efficient markets by accepting that
prices were sometimes sticky in the short run and markets
sometimes imperfect. Two of the leading figures of New
Keynsianism were Paul Krugman and Gregory Mankiw.
Ultimately, the differences between the New Classicals
and the New Keynsianians are relatively minor. Both accept
the long-run optimizing efficiency of a liberal capitalist
economy, but disagree only over how much government and
central bank gear-greasing is needed.
Krugman is not really an old-fashioned Keynesianism. He
was one of the creators of "New Keynesiansim". Also read
his introduction to Keynes's General Theory. He pours cold
water on the really important policy suggestions at the
end of the book in Book VI, which he mistakenly suggests
Keynes's did not seriously intend.
Even more
old-fashioned "Hicksian" Old Keynesianism is just one
version of conventional liberal macro, which is primarily
a tool for the countercyclical stabilization of our
day-to-day capitalist economy. That's not enough to fix
what is wrong with our planet or or domestic society, both
of which are facing deeper, more structural economic
crises that are very grave. We're going to have to be much
more radical and ambitious.
"One implication Paul
draws from these dynamics is that Republicans, motivated
not by improving the economy but by bashing Obama and the
D's, inveighed against deficits when we needed them and
are about to shift to not caring about them when deficits
– again, according to the model – could actually do some
harm.
But how reliable is this crowd-out hypothesis? It's
actually pretty hard to find a correlation between larger
budget deficits and higher interest rates in the data.
...
So is Paul making a mistake to continue to depend on
the model that has heretofore served him-and anyone else
willing to listen-so well? My guess is that deficit
crowd-out is not likely to be a big problem, as in posing
a measurable threat to growth, anytime soon, even if
deficits, which are headed up anyway according to CBO,
were to rise more than expected.
The global supply of loanable funds is robust and, in
recent years, rising rates have drawn in more capital
(pushing out the LM curve). Larger firms have enjoyed many
years of profitability without a ton of investment so they
could use retained earnings (the fact of unimpressive
investment at very low rates presents another challenge to
this broad model). And most importantly, while we're
surely closer to full employment, there are still a lot of
prime-age workers who could be drawn in to the job market
if demand really did accelerate.
(This, by the way, is the only part of Paul's rap today
that I found a bit confusing. He's a strong advocate of
the secular stagnation hypothesis, wherein secular forces
suppress demand and hold rates down, even in mature
recoveries. His prediction today seems at odds with that
view.)"
Bernstein isn't that radical. He was chief economist
for Joe Biden in the White House.
I think the epic housing bubble, financial crisis and
slow recovery are causing to people to push back against
the New Keynesian compromise and search for a better
economics, which just may be an older type of economics.
This is incorrect. Full Time employment has accelerated
after a slowdown earlier this year while part time
employment yry was noticeably lower in the 4th quarter.
That created the illusion of slowdown in NFP. The U-6 was
quite quite different.
This will probably reverse in the first half of 2017 as
yry full time employment growth goes ahead of 2016
boosting overhead NFP and continuing to lower U-6 down to
8.7-8% by June.
You are undermining your argument with those graphs. The
point is, NFP will likely reaccelerate unless there is
another slowdown. Most likely that gap will close in the
coming year.
I think need to let the inventory slump go. It was a
mistake and it being recorrected.
New Deal democrat -> John San Vant...
, -1
I hope I am wrong and you are right.
But ... If you
check out YoY growth in payrolls, it tends to be very
regular and in-noisy, peaking in roughly mid-cycle. The
only exceptions have been where we managed to avoid a
recession during a Fed tightening cycle.
YoY employment peaked at the end of 2014, and has been
decelerating ever since. So unfortunately I disagree with
you.
Krzanich grew up in San Jose, California, just miles from Intel headquarters. He didn't go to an
Ivy League school: He got his bachelor's degree in Chemistry from San Jose State University. The
prestige of a college's brand on a résumé doesn't impress him.
"I've told my daughters this; my older daughter's about to go into college. It doesn't matter
what college you go to. The thing that was great about San Jose State was, I got connected with
some very good professors," he said.
He did research for their projects on the side. "When I went into interviews, I could talk about
real work that I'd done, not just textbook stuff," Krzanich added.
That informs how he deals with job candidates today. "I ask real simple questions that just tell
me, does this person know how to think?"
Krzanich had some more advice. "The other thing I tell my daughters is, I've had to terminate or
fire more people for being difficult to work with than being dumb."
... ... ...
Fortt Knox is a weekly podcast from CNBC anchor Jon Fortt. Previous broacasts of the
program
can be found
here
.
Rock
4 hours ago
On Small Business
21 percent of CEOs are psychopaths............one in five chief executives are
psychopaths. At least, that's what was found by a recent study of 261 senior
corporate professionals in the United States..........................
"Typically psychopaths create a lot of chaos and generally tend to play people off
against each other," Nathan Brooks, a forensic psychologist and the lead researcher
of the study said in this report from The Telegraph. "For psychopaths, it [corporate
success] is a game and they don't mind if they violate morals. It is about getting
where they want in the company and having dominance over others."
PU
4 hours ago
I have worked for him, his way or the highway...very difficult to work for.
Bill
4 hours ago
I worked with BK in the 90s and he was not the easiest guy to interact with, but creative
people usually aren't. He was a good engineer though.
Backlash
37 minutes ago
I had a very rewarding career at Intel and much my success I attribute to the
mentoring I received from Andy Grove. He was a visionary second to none and believed
that constructive confrontation cut through all the crap and expedited the
identification of problems and the rapid implementation of solutions.
He knew how
to get your attention, provided you the tools to get your job done and expected you
to deliver on your commitments. Bob Noyce and Gordon Moore had a softer approach but
they too could get your attention and make it very clear what you had to deliver.
These founders of one of America's most successful corporations personal and
professional legacies set a high standard for the coming generations.
Michael W
2 hours ago
Would have been interesting to know what the actual problem was and the solution. From the
term "Copy Exactly" it looks like he had issues with transferring the technology from one
place to another and allowed "improvements" on a working process.
Key
2 hours ago
Copy exactly is the death of Intel as we know it. It stifles innovation in manufacturing
processes to reduce cost an increase productivity. This is a typical over reaction from
disconnected management that has made Intel into a company that can only increase its
revenue by laying off workers.
For that agenda to gain a hearing at the apex of economic policy-making is evidence of the shifting
ground in matters of public economic debate. It is also reminiscent of the last time inequality was
so high: then, as now, it sparked a sea change in the economics profession, including both the mainstreaming
of labor exploitation
as a subject of economic research and
the founding of the American Economic Association .
The key arguments in the CEA's paper draw on the evidence of
rising inequality in firm-specific wages I referred to in
my last ProMarket post . A key determinant of earnings is which firm a worker can gain access
to, and a strategy for consolidating earnings at the top of the income distribution is outsourcing
labor to subordinate firms so the circle of workers who get paid by the most profitable ones narrows
to high earners, who are thus earning more than they have in a century. Interfirm inequality and
firm-specific wages are canonical evidence of an uncompetitive labor market. After all, if workers
were able to move freely between firms, that should equalize the pay workers of similar experience
and education obtain across firms within an industry or geography.
And yet,
the further into the labor market you drill down , to workers in narrowly defined skill and experience
groups, the more residual inequality is apparent-until you take into account the firms where they
work.
Declining labor mobility is further evidence of monopsony, especially given that it seems to be
driven by
the declining arrival rate of outside job offers and
flattening earnings-tenure profiles .
In
my article on the subject with Mike Konczal , we showed that declining 'dynamism' is not driven
by restrictions on labor supply like occupational licensing, but rather by slack labor demand-the
classic symptom of monopsony power. And the consequences are concerning: not just rising inequality,
but stagnant earnings over the course of careers and declining entrepreneurship and employment growth
at young firms.
The CEA brief focuses on the most obvious manifestations of unequal power in the labor market
to come to light in recent years: noncompete clauses, which have extended their reach into sectors
where they once were unknown.
To teachers
in charter schools , for example, which otherwise pride themselves on introducing competition
into public education. Evidence suggests
noncompete
clauses deter worker job search , which is critical for wage gains over the course of a career.
And they are imposed by employers
even where
they are legally unenforceable -in other words, the threat is what matters, and unlike in a competitive
labor market, these restrictions on worker autonomy are not compensated by higher wages or any other
compensating differential. The very fact that they are used and affect behavior where they have no
legal basis is evidence for monopsony, because that implies wage and compensation indeterminacy within
an employment match.
The CEA brief also draws attention to the mere fact of concentration in the economy in general
and in the share of employment in the largest firms. But those summary statistics in fact bely the
reality of labor market monopsony, because there is a wage premium attached to the largest firms-though
that premium
has been declining for the lowest-paid workers , suggesting that the threat of outsourcing labor
is disciplining the wage demands of workers at the greatest risk of being outsourced. Some suggest
the fact of a large-firm wage premium is prima facie evidence against monopsony, but that interpretation
ignores the strategic behavior around who gets to be part of the firm and who is pushed out.
Studies of labor
outsourcing events show that they do little other than reduce wages-thus employer power manifests
precisely by excluding workers from firm-earnings premia.
The brief also brings up the issue of occupational licensing, which the CEA
covered in a previous report and which adds a similar anticompetitive flavor to the labor market
as monopsony. The problem is that it goes in the opposite direction: the supposed threat of occupational
licensing is that it accrues too much power to incumbent, licensed workers, increasing their wages
at the expense of employers and would-be competitors. My
aforementioned
paper presents evidence against occupational licensing as having a major impact on the labor
market-very possibly because the larger problem of monopsony counteracts its effects.
"... reduced competition can also give employers power to dictate wages-so- called "monopsony" power in the labor market. ..."
"... While monopoly in product markets and monopsony in labor markets can be related and share some common causes, the latter has some distinct causes and policy implications. ..."
"... This issue brief explains how monopsony, or wage-setting power, in the labor market can reduce wages, employment, and overall welfare ..."
A growing literature has documented several
indicators of declining] competition in the United
States, and economists have begun to explore the
links between these trends and rising income
inequality (Furman and Orzag 2015). While recent
discussions have highlighted rising concentration
among producers and monopoly pricing in sellers
markets (The Economist 2016), reduced competition
can also give employers power to dictate wages-so-
called "monopsony" power in the labor market.
While monopoly in product markets and monopsony
in labor markets can be related and share some
common causes, the latter has some distinct causes
and policy implications.
This issue brief explains how monopsony, or wage-setting power, in the labor market can reduce wages,
employment, and overall welfare...
It seems the lightning speed spread of contingent labor in
the 2010s should be evidence of this. Contingent labor as
in being "on call" for positions such as retail clerk. A person
who must be available for uncertain hours loses the opportunity
to find a second job. The employer demanding contingent labor
is essentially demanding uncompensated work hours.
In any event, the practice seems to have become near universal
by a couple years ago, suggesting a level of employer market
power far in excess of what one would think by looking at
numbers like the official unemployment rate. It may also suggest
that labor market monopsony may exist at quite small employer
size.
What you describe is in general not due to monopsony. There
is still a substantial number of independent retail and other
companies that are not (explicitly) coordinating their actions
and job function designs.
It is just regular supply and
demand dynamics, in combination with social feedback (actors
observing what "peers" are getting away with and trying the
same, and after a while it works its ways into a new normal).
In corporate lingo it is known as "best practices" - don't
innovate process, just copy what has worked elsewhere.
retail and other companies that are not (explicitly) coordinating
"
Although they have an app for coordinating plus incentive
to coordinate, they fully understand that by the time they
begin coordinating the game is over. The game for brick and
mortar retail is now hanging by a tread.
16% of retail is now intertube orders being shipped out
by USPS, Fedex, Amazon airship drone & UPS. For the next 2
years the 16% will double each year then slowly expand toward
the 99% asymptote. Sure!
When you ski at Aspen you will see old-time-y shops for
retail, shops that only the wealthy will use for more than
window-shop. Plenty time for best practices but
cm,
"companies that are not (explicitly) coordinating their actions
and job function designs."
That happens by default.
Wall-Mart dominates retail (5K stores I think out of over
11,593 stores and clubs in 28 countries) and it is a very
cruel company. Other companies copy Wall-Mart practices.
They have no "social conscience" at all and try to drive
their labor as hard as possible paying as little as possible.
In other words, they can be viewed as a corporate psychopath.
Fund Managers: Do fund managers from less wealthy families
have better performance (as compared to fund managers from
wealthier families) because they have higher competence
levels (the implication of the study supported by Taylor)
or because they are willing to take on more risk (the
implication of being less wealthy). I find the latter
explanation more convincing: those growing up in wealthy
families learn capital preservation, while those growing
up in families with less wealth learn capital creation. Or
not. Today, so-called alternative investments have become
the norm, even (or especially) among not for profits, made
famous by Yale's David Swensen. But Swensen was following
a trend, a trend established among very wealthy families
who pooled their wealth in search of higher returns
necessitated by an increasing number of heirs to support.
What otherwise rational people forget is that only in Lake
Wobegon can everyone be above average. Everyone chasing
the elusive higher return requires an increasing level of
risk; hence, the emphasis on higher asset prices (i.e.,
speculation) and the risk of financial crises.
I don't know specifically for fund managers, but generally
people from wealthier families have better social
connections, allowing them to stay in jobs while not
performing at par, or be hired into higher level positions
as a favor to somebody.
That doesn't necessarily mean
they are better or worse, only that they get better
observed outcomes.
Somebody not well connected will probably be fired more
quickly for underperforming or committing a blunder, and
find it more difficult to be hired or promoted into
"visible" positions to begin with.
"how to mirror the cultural cues of
customers and hiring managers"
I generally recognize these cues (of the genuinely cultural as
well as the "probing/confirming social status differential" type - and perhaps not their meaning
but their presence), but I have always found it difficult to tell the point where it goes from
politeness and reasonable accommodation to servility, flattery, and general phoniness. So I have
stayed more conservative in the "mirroring" or matching, which is of course not doing me any
favors.
And social behaviors are not necessarily "not rational" just because they cannot be described
succinctly in a formal theory.
Most social behaviors are about determining (assuming the presence of "cheaters" or "posers")
whether the other side is trustworthy, in the sense of conforming to expectations and being able
to deliver their part of a transaction. This requires that they are complex and not easily
formalized, so they cannot be easily gamed by calculating manipulators.
Primates are basically tribal, with trustworthiness being strongly associated with
group-belonging.
It seems the lightning speed spread of contingent labor in
the 2010s should be evidence of this. Contingent labor as
in being "on call" for positions such as retail clerk. A
person who must be available for uncertain hours loses the
opportunity to find a second job. The employer demanding
contingent labor is essentially demanding uncompensated
work hours.
In any event, the practice seems to have become near
universal by a couple years ago, suggesting a level of
employer market power far in excess of what one would
think by looking at numbers like the official unemployment
rate. It may also suggest that labor market monopsony may
exist at quite small employer size.
What you describe is in general not due to monopsony.
There is still a substantial number of independent retail
and other companies that are not (explicitly) coordinating
their actions and job function designs.
It is just
regular supply and demand dynamics, in combination with
social feedback (actors observing what "peers" are getting
away with and trying the same, and after a while it works
its ways into a new normal).
In corporate lingo it is known as "best practices" -
don't innovate process, just copy what has worked
elsewhere.
retail and other companies that are not (explicitly)
coordinating
"
Although they have an app for coordinating plus
incentive to coordinate, they fully understand that by the
time they begin coordinating the game is over. The game
for brick and mortar retail is now hanging by a tread.
16% of retail is now intertube orders being shipped out
by USPS, Fedex, Amazon airship drone & UPS. For the next 2
years the 16% will double each year then slowly expand
toward the 99% asymptote. Sure!
When you ski at Aspen you will see old-time-y shops for
retail, shops that only the wealthy will use for more than
window-shop. Plenty time for best practices but
cm,
"companies that are not (explicitly) coordinating their
actions and job function designs."
That happens by
default.
Wall-Mart dominates retail (5K stores I think out of
over 11,593 stores and clubs in 28 countries) and it is a
very cruel company. Other companies copy Wall-Mart
practices.
They have no "social conscience" at all and try to
drive their labor as hard as possible paying as little as
possible. In other words, they can be viewed as a
corporate psychopath.
Fred C. Dobbs :
As observed, Dems don't like deficits
when GOPsters do them, and the GOP doesn't like them unless they do them.
PK: 'And meanwhile I
and other Keynesians are getting mail accusing us of being the hypocrites: "You were for deficits
when Obama was in, now they're bad!"
But as I just said, the situation has changed.' ...
As even I have noted, deficits are *useful* when employment is down and infrastructure needs building.
We haven't done enough of that lately, for sure.
It may not be overwhelming in its effect, but he did DO something, and had an effect, made
an example.
Gee, what a terrible thing to do.
What the Wall Street Dems have done is feel the average worker's pain, hand out some questionably
progressive programs like the Heritage Foundation's ACA, and explain why it was all necessary
in the name of free trade and globalization.
>" Remember when the "Wall Street
Dems" saved the ENTIRE US-branded auto manufacturing industry?"
Did not they save their friends
investment portfolios (and some saved their own). Collapse of auto sector means plunge of S&P500,
because of interconnection with other sectors. the lowest point of S&P 500 during this period
was around 670. I think they have no other options.
"... On Thursday, at a rough estimate, 75,000 Americans were laid off or fired by their employers. Some of those workers will find good new jobs, but many will end up earning less, and some will remain unemployed for months or years. ..."
"... In an average month, there are 1.5 million "involuntary" job separations (as opposed to voluntary quits), or 75,000 per working day. ..."
"... Krugman refuses to admit the possibility that Trump may actually have shifted the cost-benefit of moving jobs abroad. Now corporations will have to weigh the cost of being condemned in the court of public opinion for moving jobs abroad...negative publicity that they can ill afford. ..."
The Age of Fake Policy, by Paul Krugman, NY Times
:
On
Thursday, at a rough estimate, 75,000 Americans were laid off or
fired by their employers. Some of those workers will find good new
jobs, but many will end up earning less, and some will remain
unemployed for months or years.
If that sounds terrible to you..., I'm just assuming that Thursday
was a normal day in the job market. ...
In an average month,
there are
1.5 million "involuntary" job separations
(as opposed to
voluntary quits), or 75,000 per working day.
Hence my number.
...
assuming that Thursday was a normal day in the job market.
... In an average month, there are 1.5 million
"involuntary" job separations (as opposed to voluntary
quits), or 75,000 per
"
Bless your fat bones pK!
At last you have saved the day!
Tell me something! How many of the 75,000 were fired
because their employer figured he could stay in business
longer if he didn't have to raise their wages by virtue of
the *minimum wage regulation*?
How many of such lost jobs could have been saved had
our governmental gals and guys opted for maximum wage
regulation instead? For example a maximum wage regulation
that would have cut your fat salary in half to reduce the
inequality in this fair city? A maximum wage regulation
would require less overhead in light of the fewer wage
earners at the top of the heap but generate more of wage
dispersion since there is more fat to cut at the apex of
the pyramid than fat to gain at entry level salaries.
Can't you just see it now? pK and his wealthy
colleagues staging a violent demonstration? An objection
from the mob? pK heaving industrial strength cherry bombs
at innocent constables?
Just in case you are an honest broker and just not
actually aware of the policy preference differences
between Republicans and Democrats (and between someone
like Kudlow and someone like Krugman) - one of these key
policy difference is that Democrats have a policy platform
to raise, rather than lower, the top marginal rate (the
amount of money that triggers the highest tax rate on all
dollars earned after reaching that point). A higher
marginal rate, usually any rate that exceeds 70%, is in
practice a maximum wage.
Also - the minimum wage is really low in historic
value. It isn't likely to be what causes job loss.
JohnH :
, -1
Krugman refuses to admit the possibility that Trump
may actually have shifted the cost-benefit of moving jobs
abroad. Now corporations will have to weigh the cost of
being condemned in the court of public opinion for moving
jobs abroad...negative publicity that they can ill afford.
By contrast, Obama had eight years to use the bully
pulpit...but could never figure out what it was...
Now if Krugman and Democrats only had a plan for saving
jobs. Sadly, they can muster nothing more than a 'just
suck it up,' because the jobs are gone for good...
ilsm -> JohnH...
, -1
jumped shark, a lot of folks took a few days off from
embarrassing themselves after the crooked neocon was
beaten.
Where is Democrats' War on Climate Change? Where is
Krugman's?
[Of course, pgl, the 'progressive liberal' mocks job
creation potential of solar power...just like Trump.]
Instead of bashing Trump 24/7, Democrats and Krugman
would be better served promoting a green, high employment
future.
anne -> pgl...
, -1
Important point.
Knowing how large infrastructure
spending will be relative to the size of an economy is
important. Chinese planners will be spending $860 billion
between 2017 and 2020 on alternative energy and high-speed
rail projects or $360 and $500 billion respectively.
The $860 billion comes to $215 billion yearly or 2.6%
of current Gross Domestic Product taken in simple dollar
terms.
While facts are correct the move was probably stupid. He could transfer to less expensive
collage or just finish community collage first. you can't replace collage experices. and
sutudents often matter more then professors. KSU has reasonable fees (less then $6K for 16
credits a semester) See Tuition and Fees
and
k-state.edu
He would be better off by returning, especially if the company he joins pay to tuition or at
least part of it.
Notable quotes:
"... "cost of inflation is relatively small compared to the cost of college over the last 30 or so years. I mean, it really is ridiculous how the cost of college has gone up." ..."
"... In 1980, the average cost of tuition, room and board, and fees for a four-year course was over $9,000. That cost now is more than $23,000 for state colleges. If you want to go private it's more than $30,000. ..."
"... In the post Willson also cited higher education debt as a reason to leave university and enter the work place. Students in the United States are estimated to be in around over $1.2 trillion of loan debt with 7 million borrowers in default. ..."
Billy Willson received a 4.0 grade point average, the equivalent to straight A's, for his
first semester at Kansas State University. He decided that it would also be his last.
In a strongly worded Facebook post, Willson uploaded a photograph of himself standing outside the
university's sign, holding his middle finger up to it. In the accompanying text he wrote:
"YOU ARE BEING SCAMMED. You may not see it today or tomorrow, but you will see it some
day,"
"You are being put thousands into debt to learn things you will never even use. Wasting 4
years of your life to be stuck at a paycheck that grows slower than the rate of inflation.
Paying $200 for a $6 textbook."
His post, which has been shared more than 10,000 times in little more than a fortnight and has
provoked a vigorous debate in the comments, appears to have struck a chord with other young
adults who are wondering if pursuing higher education is worth the time and money.
Willson, who was on an Architectural Engineering undergraduate course told BBC Trending that the
"cost of inflation is relatively small compared to the cost of college over the last 30 or so
years. I mean, it really is ridiculous how the cost of college has gone up."
He's backed up by data. According to the US Department of Education the average annual increase
in college tuition in the United States, between 1980-2014, grew by nearly 260% compared to the
nearly 120% increase in all consumer items.
In 1980, the average cost of tuition, room and board, and fees for a four-year course was
over $9,000. That cost now is more than $23,000 for state colleges. If you want to go private
it's more than $30,000.
... ... ...
In the post Willson also cited higher education debt as a reason to leave university and
enter the work place. Students in the United States are estimated to be in around over $1.2
trillion of loan debt with 7 million borrowers in default.
2017 started off badly, with
the death
of Tony Atkinson
– the most important economist working on inequality,
poverty (in affluent societies), the economics of the welfare state, and
'optimal taxation'. Academics who have known Atkinson have lost one of the most
humane, wise and gentle of their colleagues, who was genuinely caring about
other people in his work as well as in his interactions with them.
The world
at large has lost a wise welfare economist who was the Godfather of modern
inequality analysis and therefore (and for other reasons)
should have received the Nobel Prize
. Without his work, inequality metrics
and knowledge on social security mechanisms wouldn't be what they are now; he
continued working on normative welfare economics throughout the decades in
which it wasn't fashionable at all (I am not sure it is fashionable again, but
at least I hope that the recent hugely popular and influential work by Thomas
Piketty has improved the status of inequality analysis among economists.)
Atkinson's work on how to effectively protect the poor and decrease
inequalities will be badly needed in the years to come, so luckily he has left
us a goldmine of scholarly papers and academic books, including most recently
Inequality: What can be done?
which doesn't require an economics
degree to be understood.
For Thomas Piketty's obituary of Atkinson, see
here
.
Tabasco
01.03.17 at 11:08 pm
Yes he should have won the Nobel and others less deserving won it the past
5-10 years when he could have won it. But that's the way it goes. It's a
nice obit by Piketty. I liked how he called Atkinson, "a citizen of,
respectively, the United Kingdom, Europe, and the world", which is a direct
shot as the Euro nationalists and their enablers.
A slightly odd note was Piketty's use of the euphemism, "a long illness",
which many obit writers use when they mean cancer, but can't bring
themselves to write the c-word. It's odd coming from Piketty who normally
doesn't mince his words.
Am I reading too much into the fact that the
Financial Times
published an obituary before the
Guardian
did ('has yet done' at the
time of my comment)?
derrida derider
01.04.17 at 2:14 am
A sad loss of someone who, as Piketty notes, centred his work around the
insight that economics was before all else a branch of applied moral
philosophy. And at a personal level the epitome of an old fashioned scholar
and a gentleman.
Anthony B. Atkinson passed away in the morning of January 1st 2017, at the age of 72, after
a long illness. This leaves us with an invaluable loss.
Anthony " Tony " Atkinson
occupies a unique place
among economists. During the past half-century, in defiance of prevailing trends, he placed the question
of inequality at the center of his work while demonstrating that economics is first and foremost
a social and moral science.
Tony was born in 1944 and published his first book in 1969. Between 1969 and 2016, he wrote over
forty
books
and more than
350 scholarly articles
. They have brought about
a profound transformation in the broader field of international studies of inequality, poverty and
the distribution of income and wealth. Since the 1970s, he has also written major theoretical papers,
devoted in particular to the theory of optimal taxation. Atkinson was always interested in practical
issues of public policy and social justice, and understood that marrying theoretical analysis with
a careful look at the actual data was the most powerful way to make progress.
Atkinson's most important and profound work has to do with the historical and empirical analysis
of inequality, carried out within a theoretical frame that he deploys with impeccable mastery and
utilizes with caution and moderation. With his distinctive approach, at once historical, empirical,
and theoretical; with his extreme rigor and his unquestioned probity; with his ethical reconciliation
of his roles as researcher in the social sciences and citizen of, respectively, the United Kingdom,
Europe, and the world, Atkinson has himself for decades been a model for generations of students
and young researchers.
Together with Simon Kuznets, Atkinson single-handedly originated a new discipline within the social
sciences and political economy: the study of historical trends in the distribution of income and
wealth. Of course, the question of distribution and long-term trends already lay at the heart of
nineteenth-century political economy, particularly in the work of Thomas Malthus, David Ricardo,
and Karl Marx. But these writers could draw only upon limited data, and were frequently obliged to
limit themselves to purely theoretical speculation.
It was not until the second half of the twentieth century and the research of Kuznets and Atkinson
that analyses of distribution of income and wealth could actually be based on historical sources.
In his 1953 masterwork,
Shares of Upper Income Groups in Income and Savings
, Kuznets combined
the first systematic records of American national income and property (records that he himself had
helped to create) and the data produced by the federal income tax (established in 1913, in the aftermath
of a prolonged political battle), to establish the very first historical account of year-by-year
income distribution.
In 1978, in
The Distribution of Personal Wealth in Britain
, a fundamental book (co-written
with Allan Harrison), Atkinson outstripped and overtook Kuznets: he made systematic use of British
probate records from the 1910s to the 1970s to analyze in magisterial fashion the extent to which
different economic, social, and political forces can help us understand the developments observed
in the distribution of wealth, a distribution that was particularly under scrutiny during this period
of exceptional turbulence. As compared to Kuznets' book, which was mostly concerned with the construction
of the statistical database, Atkinson's book goes a step further, in the sense that it better articulates
the data collection with the historical and theoretical analysis.
All subsequent work on historic trends in income and wealth inequality to a certain extent follow
in the wake of Kuznets's and Atkinson's groundbreaking studies. In particular, the " World Wealth
and Income Database " (
WID.world
) can be viewed as a mere continuation
of the Atkinson-Kuznets agenda.
At a more personal level, I was very fortunate to meet Tony when I was a young student at the
London School of Economics in the fall of 1991. His many advices, always delivered with infinite
care and kindness, had a decisive impact on my trajectory. Soon after I published
Les hauts revenus
en France au 20
e
siècle
, in 2001, I had the chance to benefit from his enthusiastic
support. Tony was the first reader of my historical work on inequality in France and immediately
took up the British case (where historical income data had not been exploited yet) as well as a number
of other countries. Together, we edited two thick volumes that came out in 2007 and 2010, covering
twenty countries in all. These works are at the origin of the database
WID.world
, and also of my 2014 book " Capital in the 21st century
", which could not have existed without the support of Tony.
Leaving aside his historic and pioneering writings, Atkinson has been for decades one of the leading
international specialists doing comparative investigations on the measurement of inequality and poverty
in contemporary society. He has also been the tireless architect of projects for international cooperation
on these subjects.
In his most recent book published in 2015,
Inequality: What Can
Be Done?
-wholly focused on a plan of action- he provided us with the broad outlines of a
new radical reformism
based on his many decades of research analyzing inequality and public policy.
Witty, elegant, profound, this book brings us the finest blend of what political economy and British
progressivism have to offer.
Atkinson was a generous and rigorous scholar, a unique source of inspiration for all of us. He
was also the kindest of mentors. Although he had been fighting a long illness in the last years of
his life, he remained extremely active until the very end, continuing work on several big projects,
and exchanging with his colleagues and friends even in recent weeks. Atkinson dies as inequality
has become probably the most pressing issue our societies are facing. His life has been about creating
the tools to measure, understand and tackle inequality. His work will live as we continue confronting
the problem of inequality. We will miss him deeply.
Fake News on Germany's Unemployment Rate at the New
York Times
Alright, that is not entirely fair, but when the NYT
told readers * that Germany's unemployment rate is 6.0
percent it seriously misled readers. The issue is that
this figure refers to Germany's unemployment rate as
calculated by Germany's government. This measure counts
workers who are employed part-time, but want full-time
jobs, as being unemployed. By contrast, the standard
measure of the unemployment rate in the United States
counts these workers as being employed.
This would be reasonable if the German government
measure was the only one available, but it isn't. The
Organisation for Economic Co-operation and Development
calculates a harmonized unemployment rate that is
essentially the same as the unemployment rate generally
used for the United States. By this measure ** Germany's
unemployment rate is just 4.0 percent.
The NYT can be partially forgiven since this was a
Reuters story that it made available on its web site. (I
don't know if it ran in the print edition.) Still, it
would not be hard to add a sentence either explaining the
difference or alternatively including the OECD measure.
In this same vein, and it's a new year, let me also
harp on the practice of printing other country's growth
rates as quarterly figures. While the rate of GDP growth
is always expressed as an annual rate in the United
States, most other countries express their growth as a
quarterly rate. Typically this raises the U.S. growth rate
by a factor of four. For example, a 0.5 percent quarterly
growth rate translates into a 2.0 percent annual rate. (To
be precise, the growth rate should be taken to the fourth
power. For low growth rates this will typically be the
same as multiplying by four.)
Anyhow, articles often appear in the NYT and elsewhere
that just print the growth rate as a quarterly rate,
frequently without even pointing out that it is a
quarterly rate. This gives readers an inaccurate
impression of the growth rate in other countries.
It really should not be too much to expect a newspaper
to convert the growth rates in annualized rates. After
all, the reporters are more likely to have the time to do
this than the readers. And, this is supposed to be about
providing information to readers, right?
New York Gov. Andrew Cuomo has unveiled a proposal to offer free tuition for lower-income New
Yorkers attending state-run colleges, an idea embraced by last year's Democratic presidential contenders.
The plan announced Tuesday – called the Excelsior Scholarship – would grant full-rides to students
from families earning less than $125,000 a year, as long as they attend one of the state's public
two- or four-year colleges.
The plan announced Tuesday – called the Excelsior Scholarship – would grant full-rides to students
from families earning less than $125,000 a year, as long as they attend one of the state's public
two- or four-year colleges.
Speaking at LaGuardia Community College in New York's Queens borough, the Democratic governor said
his proposal could allow students from some 940,000 families to attend college, which is key to scoring
about 70 percent of jobs in the state, Reuters quotes Cuomo as saying.
"College is a mandatory step if you really want to be a success," Cuomo told the crowd.
Joining the governor, Vermont Sen. Bernie Sanders cheered the proposal.
... ... ...
Cuomo's proposal, which would apply only to New York residents, iwould cost about $163 million
annually and be in place by 2019 – that's if it passes the state's legislature,
The New York Times reports.
"... Moreover, although the evidence is murky it seems that an increasing proportion of charters
are being run on a for-profit basis, even in cases where formal structure is non-profit. Given the failure
of the for-profit model in general, the prospects for the future are not good. ..."
"... On the other hand, an analysis based on prices falls down badly in the attempt to describe
education as a market transaction. All the terms of the Second Lesson are relevant here. Education is
characterized by market failure, by potentially inequitable initial allocations and, most importantly,
by the fact that the relationship between the education 'industry' and its 'consumers', that is between
educational institutions and teachers on the one hand and students on the other, cannot be reduced to
a market transaction. ..."
"... The result is that education does not rely on market competition to any significant extent
to sort good teachers and institutions from bad ones. Rather, education depends on a combination of
sustained institutional standards and individual professional ethics to maintain their performance.
..."
"... One subject which is not taught in school or Universities, is to control greed, which is the
biggest malaise in the world today, as it was thousands of years ago ..."
"... "an increasing proportion of charters are being run on a for-profit basis, even in cases where
formal structure is non-profit" ..."
"... You may want to make clear that this can be done by buying services from for-profit companies
owned by the management of the charter schools. ..."
"... "In a modern society, education is the most important single factor determining a person's
life chances." ..."
"... Is this perhaps overstated? I'd have thought that the most important factor is the socioeconomic
status of one's parents. ..."
"... Ask any affluent parent about the best school districts in their county, or the best schools
within their school districts, and you'll get confident and well informed answers. ..."
"... And of course these parents act on this knowledge by spending money by buying houses in neighborhoods
with good schools. Given local funding, in the US we get a nasty positive feedback loop that creates
huge inequalities at the expense of less affluent parents -- better schools mean higher real estate
prices which means higher assessed values which means more tax revenues for funding the better schools
which means they get even better. The less affluent are steadily priced out of this market, and their
choices dwindle -- they're stuck with crappy schools. ..."
Here's another excerpt from my book-in-progress, Economics in Two Lessons . As usual,
praise is welcome, useful criticism even more so. You can find a draft of the opening sections
here .
In the section over the fold, I'm looking at education.
In a modern society, education is the most important single factor determining a person's life
chances. The average who holds a professional or doctoral degree earns more than twice as much as
someone without a four-year college degree, and is virtually assured of being employed (at a time
of deep depression in 2011, only 2.5 per cent of higher-degree holders were unemployed). In economic
terms, the education sector is one of the largest in the economy.
However, this statistical analysis seriously underestimates the economic importance of sector,
because it ignores the First Lesson. The true cost of education comprises not just the salaries of
teachers and the cost of running schools and universities, but the opportunity cost of the time spent
in education by students.
The failure to take proper account of the First Lesson is a big problem in understanding the economics
of education. But the failure to understand the Second Lesson has been much more of a problem for
policy.
Simple-minded analyses based on a simplistic reading of the First Lesson have driven the irsteducation
debate in the US and other English-speaking countries for the last few decades. The dominant idea
is that education is a product like any other and that the best guarantee of good education is market
competition between providers. The villains in this story are public goods and, especially, teacher
unions.
To make education more like a private good, advocates of he First Lesson tried to change the conditions
of both supply and demand. On the demand side, the central proposal was that of education 'vouchers',
put forward most notably by Nobel Prizewinning economist at the University of Chicago, Milton Friedman.
The idea was that, rather than funding schools, government should provide funding directly parents
in the form of vouchers that could be used at whichever school the parents preferred, and topped
up, if necessary by additional fee payments.
As is typically the case, voucher advocates ignored the implications of their proposals for the
distribution of income. In large measure, vouchers represent a simply cash transfer, going predominantly
from the poor to the rich. The biggest beneficiaries would be those, mostly well-off, who were already
sending their children to private schools, for whom the voucher would be a simple cash transfer.
Those whose children remained at the same public school as before would gain nothing.
On the supply side, the central idea was the introduction of for-profit schools and colleges to
a sector traditionally dominated by public and non-profit educational institutions. For-profit educational
institutions had a spectacular rise and fall.
The most notable entrant in the US school sector was Edison Schools. Edison Schools was founded
in 1992 and was widely viewed as representing the future of school education. Its plans were drawn
up by a committee headed by John Chubb, the co-author of the most influential single critique of
public sector education in the United States (Chubb and Moe 1990). For-profit schools were also introduced
in Chile and Sweden.
At the university level, for-profit enterprises proliferated with the University of Phoenix was
the most notable example. For-profit trade and vocational schools also expanded in the US, and, even
more dramatically in Australia, where a poorly-designed subsidy scheme produced a spectacular expansion.
The story was much the same everywhere: an initial burst of enthusiasm and high profits, followed
by the exposure of poor practices and outcomes, and finally collapse, with governments being left
to pick up the pieces.
Edison Schools, launched on the stockmarket with a flourish in 1999, lost most of its value and
was subsequently taken private. At its peak, Edison ran hundreds of schools throughout the US. It
has now faded into obscurity under the name EdisonLearning.
Sweden introduced voucher-style reforms in 1992, and opened the market to for-profit schools.
Initially favorable assessments were replaced by disillusionment as the performance of the school
system as a whole deteriorated. Scores on the international PISA test plummeted
By 2015, the majority of the public favored banning for-profit schools. The Minister for Education
described the system as a 'political failure', Other critics described it in harsher terms.
Although a full analysis has not yet been undertaken, it seems likely that the for-profit schools
engaged in 'cream-skimming', admitting able and well-behaved students, while pushing more problematic
students back into the public system. The rules under which the reform was introduced included 'safeguards'
to prevent cream-skimming, but such safeguards have historical proved ineffectual in the face of
the profits to be made by evading them.
Similar processes took place in Chile, under the influence of the Chicago-trained reformers whose
policies were implemented by the Pinochet dictatorship. There were glowing initial reports, but the
eventual outcome was to amplify inequality without improving performance. Chile banned for-profit
education in 2015
The for-profit university sector followed a similar trajectory. The University of Phoenix epitomised
the process. Enrolments peaked at 600 000 in 2010, but had fallen to 142 000 by 2016 as the US government
cracked down on shady enrolment practices. Other for-profit universities closed altogether or converted
to non-profit status
Perhaps the most spectacular boom and bust took place in my native Australia. From tiny beginnings
around 2007, a scheme to provide loans-based funding for vocational training grew into a full-blown
educational and budgetary disaster. Even more than in the for-profit US university sector, the companies
involved found it profitable to exploit the weaknesses of the funding system, and the fact that students
could not judge the quality of education in advance, rather than to do the hard work of providing
improved education.
The results speak for themselves. By the time a conservative government radically restricted the
scheme in late 2016, the estimated losses to the budget ran into the billions of dollars, while thousands
of students were left with unrepayable debts and worthless qualifications. Meanwhile, the public
system of Technical and Further Education, which had worked well for decades had suffered grave and
possibly irreparable damage.
The failure of full-scale privatisation left the field open to the main remaining alternative
'charter' schools. The idea of charter schools was originally put forward by Albert Shanker, the
president of the American Federation of Teachers. His idea was to encourage schools where teachers
had more opportunities to try out innovative approaches, and where the student body would be more
diverse, both economically and racially.
In the hands of the education reform movement, however, charter schools took on a very different
tone and purpose, much closer to that of the for-profit model that failed with Edison. While some
independent charter schools have pursued innovation along the lines suggested by Shanker, others
are part of chains relying on services like management companies, including for-profits like EdisonLearning.
Charter schools have been, and remain, politically popular with Republicans and Democrats alike.
The only problem is that, according to the empirical evidence, they don't work. Charter schools
have not failed spectacularly, as for-profits have done, but they have not yielded any significant
return for the money and political effort that has been poured into their expansion.
Nationally, there is very little evidence that charter and traditional public schools differ meaningfully
in their average impact on students' standardized test performance.
Moreover, although the evidence is murky it seems that an increasing proportion of charters
are being run on a for-profit basis, even in cases where formal structure is non-profit. Given the
failure of the for-profit model in general, the prospects for the future are not good.
Why has market-oriented reform of education been such a failure? Every part of the Second Lesson
is relevant here. On the 'production' side, education is, in many respects similar to other industries.
Prices send signals about the cost of providing particular courses of study in particular ways, and
of the rewards of one kind of employment or another. Institutions and educators respond to those
signals. Students try to weigh the cost and the likely monetary benefits of continuing education,
or of seeking employment, along with less tangible costs and benefits, and decide accordingly.
On the other hand, an analysis based on prices falls down badly in the attempt to describe
education as a market transaction. All the terms of the Second Lesson are relevant here. Education
is characterized by market failure, by potentially inequitable initial allocations and, most importantly,
by the fact that the relationship between the education 'industry' and its 'consumers', that is between
educational institutions and teachers on the one hand and students on the other, cannot be reduced
to a market transaction.
The critical problem with this simple model is that students, by definition, cannot know in advance
what they are going to learn, or make an informed judgement about what they are learning. They have
to rely, to a substantial extent, on their teachers to select the right topics of study and to teach
them appropriately.
Moreover, any specific course of education is a once-only experience in most cases. Students may
judge, in retrospect, that particular teachers, courses or institutions were good or bad, but in
either case they are unlikely to return, so that there is no direct market return to high quality
performance.
The result is that education does not rely on market competition to any significant extent
to sort good teachers and institutions from bad ones. Rather, education depends on a combination
of sustained institutional standards and individual professional ethics to maintain their performance.
The implications for education policy are clear, at least at the school level. School education
should be publicly funded and provided either by public schools or by non-profits with a clear educational
mission, as opposed to corporate 'school management organisations'.
Post-school education raises more complex problems, regrettably beyond the scope of this book.
But the key element should be to make high quality post-school education available, and affordable,
for all young people.
With very little education, I,am hardly qualified to comment on this topic.
I do consider that
education should be available to all students irrespective of their parents wealth, by the government,
and if the higher educated earn more, then they should pay more taxes so that the government have
the funds to provide free education.
One subject which is not taught in school or Universities, is to control greed, which is
the biggest malaise in the world today, as it was thousands of years ago
You might also mention the big picture idea that there is a lengthy history of educational
policy entrepreneurs, whose ideas become fads and then fail. These are just the latest.
jdkbrown 12.29.16 at 3:38 pm
"In a modern society, education is the most important single factor determining a person's
life chances."
Is this perhaps overstated? I'd have thought that the most important factor is the socioeconomic
status of one's parents.
Olle J. 12.29.16 at 4:14 pm
As someone that reads the newspaper, the occasional report, and works with the "products" coming
out of Swedish secondary education (i.e. what used to be called students), it might be worth noting
that the introduction of vouchers and free choice are not the only thing that have been accused
of causing the declining school results (and increased inequality).
Other purposed causes include the decentralization of schools from the state to the local municipalities;
educational reforms that have introduced modern pedagogy ("flumpedagogik", hippie pedagogy, is
the derogatory term); teachers spending more and more time documenting things for different forms
of evaluations instead of teaching or preparing classes; as well as the declining status, class
room autonomy, and salaries of teachers (resulting in deskilling and that better students shuns
from becoming teachers). The jury is still out on what, or rather which combination, caused the
declining test results in Pisa (and Timms; although results both are up again this year).
Don't underestimate the political goal of the right to undermine teacher's unions and to turn
public goods into profit streams.
engels 12.29.16 at 6:53 pm
In a modern society, education is the most important single factor determining a person's
life chances.
Prince Charles seems to be doing a fair bit better than me and he's only got a couple of O-levels
(as well as being a certifiable fuckwit). I think Thomas Piketty had something to say about this
atrange and hitherto unnoticed phenomenon
Then you have cherry-picking of failures, but completely ignore private school successes, like
say, Korea.
The theoretical criticism is silly: "The critical problem with this simple model is that students,
by definition, cannot know in advance what they are going to learn, or make an informed judgement
about what they are learning."
This proves too much: it is something that would be true for for-profits as well as for non-profit
private systems. Yet in the USA, the private universities are consistently the top universities.
You don't have to know Quantum Physics before judging if a university has a good or bad physics
program.
The sentence is also a criticism of school choice in general, yet the middle classes in the
US have no problem in figuring out where to buy houses to get away from failing schools.
There is a valid point to be made, namely that the institutional design of private-public partnerships
needs to focus intensely on avoiding the gaming of the system. Bureaucrats with only vague interest
in designing a successful system often don't do that. But they only have to get it right once.
Running a public system well means getting things right year after year - at some point, they'll
fail, and if success is somewhat sticky, failure is even stickier.
But the author of the chapter has no interest in expanding on the valid point, preferring to
make overshooting and incorrect generalizations.
It might be worth re-visiting the three excruciatingly long threads (Harry) posted on charters/vouchers
a couple weeks ago.
In the home state of the nominee for Secretary of Education, 80% of charters are now for-profit.
I suspect the statistics for all states are available if one looks by state. There has been a
pretty full assessment of Detroit's charter school results to date, and they're not very encouraging
overall.
@MPAVictoria:
re: Duncan, I suspect this was JQ's note to himself to reference Arne Duncan, Obama's Education
Secretary and Former Chancellor of Chicago's Public School System. Duncan was/is a proponent of
charters – in this area, it's very much a case of "both sides do it."
One aspect of the interminable discussion on Harry's threads was the inability of commenters
to agree on "who's the client" for public schooling. Commenters were divided between "the students"
(the recipients) and "their parents" (i.e. the payers).
I never saw it that way. A public good has by definition one client: the public, the polity
itself. To my mind, it behooves the polity to (a) establish standards and (b) ensure these are
met to the greatest extent possible given limited resources.
For-profit charters and vouchers (used mostly for private religious schools) are not the ideal
vectors for serving the polity's education goals for its citizens.
The reasons are legion; again, Harry's three threads say a lot about them.
Sebastian H 12.29.16 at 7:44 pm
Its been a long time since I read the first few chapters, so I apologize if I'm missing the
thread about your point here (do you have an easy set of reference links so we can easily go back?).
Talking about education system in terms of market failures is going to strike as very tone
deaf for US audiences because the very tiny experiments with charters came about in *response*
to pervasive and long term failures of the already public education system. This has always been
my frustration with the discussion–that the anti-market people want to criticize market failures,
and the pro-market people want to criticize government failures, but they talk past each other.
No one really analyzes what makes for pervasive and long term government failure from the market
critique position, and no one really analyzes what makes for government success from the government
critique position. So outsiders to the academic world feel like no one is really analyzing it
from a point of view where we can get useful non-dogmatic information about when government failures
can be corrected with markets, and when market failures might need to be left alone anyway.
Anyway I might be asking that you write a book other than the one you're writing which isn't
really fair.
'have driven the irst education debate'
I see what you did there.
'for-profit enterprises proliferated with the University of Phoenix was the most
notable example'
I don't see what you did there. Either the ' with' should be a ';' or the 'was' should be an 'as'.
Jonathan McNamee 12.29.16 at 10:33 pm
You state:
As is typically the case, voucher advocates ignored the implications of their proposals for the
distribution of income. In large measure, vouchers represent a simply cash transfer, going predominantly
from the poor to the rich. The biggest beneficiaries would be those, mostly well-off, who were
already sending their children to private schools, for whom the voucher would be a simple cash
transfer. Those whose children remained at the same public school as before would gain nothing.
Do well off parents get vouchers to send their kids to private schools? I'm not aware that
they get vouchers in the US. Parents who send their children to private schools are subsiding
the public school because they pay property taxes. Indirectly they also help to provide vouchers.
A wrote an undergraduate thesis apply Chubb and Moe's theory to Sweden, and am now pursuing a
doctorate and study (among other things) how schools respond to competition.
I generally agree with your take, but I think your argument would be more interesting if you
gave a little more credence to the charter school movement. In cities, they are better, on average,
particularly for poor students and students of color, and even for ELL students (CREDO). More
importantly, it is interesting, and relevant to your argument, that (to my knowledge) all the
most successful charter management organizatinos are non-profit, and highly mission driven. It
is worth it to unpack why they succeed, while for-profit ventures literally founded by the folks
who developed the most persuasive theory of action for market principles (Chubb) fail.
A final point worth considering is the extent to which any of these organizaitons feel "competition".
Successful CMOs are buffered by large donations from venture philanthropists, and Bridge has received
large investments from folks like Mark Zuckerberg. This certainly adds dimensions to the story.
Collin Street 12.30.16 at 1:14 am
You might also mention the big picture idea that there is a lengthy history of educational
policy entrepreneurs, whose ideas become fads and then fail. These are just the latest.
But - again - there's nothing special about education here. All sectors of the economy
have these clouds of too-clever-by-half people, the vast majority of whom are deeply misguided.
In established private-sector industries and in bureaucracies alike the bad ideas get largely
excluded; it's when things are broken down - nationalisations the same as privatisations -
that the daft ideas can get in.
[which means: gradualism, I guess. And throwing the baby out with the bathwater is bad, but
so's leaving the baby in the bath until it dies of hypothermia because you're so paralysed by
the fear the baby will fall down the plughole.]
Looking forward to the book. I work in education, and have a couple thoughts
Unless you already address it elsewhere, you might want to spend at least a few paragraphs
on the metrics of determining school effectiveness/success, and the ways individuals and schools
have tried (in various cases, illegally and/or merely shadily/unethically) to figure out ways
to juke the stats.
To the best of my knowledge, the frequency and scale of these incidents has risen dramatically
as education "reform" became a movement in the 80s and 90s. In my experience, as education is
increasingly treated as simply another business, it is attracting more and more non-educators
whose experience is in "leadership" and "management" rather than education. Unsurprisingly, this
has led to more educators focusing more on their end-of-year metrics, rather than their students'
best interests, educational or otherwise.
I know there's already plenty out there about the ed "reform" movement in general, and your
focus is specific, but I think some reference to these issues might be warranted and might connect
to some of the other chapters. Frankly, a lot of people I talk to at both the school and district
level feel like many of these reforms are solutions in search of problems. Not that there aren't
problems – educational outcomes' strong correlation with parent income, for one – but that the
solutions on offer seem to be unable/unwilling to engage them.
I also remember seeing on a previous post a recommendation that you explore who, in the case
of schools, is even the "consumer," in the first place, and whether their judgment of school effectiveness
is the yardstick anyone should use when judging school quality. It's an interesting question,
and one not given enough space in the discussion, from what I've seen.
I'm really enjoying this series, and would like to chime in on this installment as I work in
higher ed. jdkbrown brings up something very important; college education is associated with better
life outcomes, sure, but being able to complete college depends on family resources (and book
smarts, which are
associated with
family resources .) This relationship is so predictable that UCLA's Higher Education Research
Institute has posted an
interactive graduation
rate calculator .
Also, the number of "good" jobs is not increasing. Expanding access to college hasn't expanded
career opportunities; in fact jobs from accounting to legal research to X-Ray reading are getting
automated or offshored to low-wage countries.
Far from being happy to take anyone with a college degree, employers have become far more
choosy , and less willing to invest in training. So the same few college people that used
to get the good jobs still get the good jobs, and the rest settle for jobs that
used to go to high school grads .
Expanding access to college without addressing poverty and job market realities is not
going to increase social mobility.
You are exaggerating about Prince Charles. He got two A-levels, a B in History and a C in French.
And is really doing better than you? I don't know how how your career has gone, but he is 68
years old and still an intern.
reason 12.30.16 at 10:40 am
One thing that is missing here is the clear case that the biggest problem with public education
in the US is local financing. Sebastian H. has a valid point here. I don't necessarily see the
issue of public versus private as the dominant factor here. Why is Finland so consistently successful
compared to almost everywhere else, at least in results for the typical student (and I'm not sure
that I know of league tables for elite student performance). And as I pointed out in your previous
thread, I think many of the main issues are orthogonal to this issue (issues that are regarded
as important in Germany for historical reasons like furthering democratic values and social inclusiveness
for instance).
re – Libertarianism and education – isn't the more fundamental point here that Libertarianism
doesn't really cope with the case of children very well in the first place.
Children just don't fit in the Libertarian world view, they have limited rights and limited
responsibilities and are viewed simply as consumption goods rather than actors in their own right.
engels 12.30.16 at 12:43 pm
Just 35 percent of the Forbes 400 last year were raised poor or middle class, compared to 95
percent of the broader public, as (reasonably) defined by UFE.
Twenty one percent
inherited enough money to join the 400 without lifting a finger , what UFE calls being "born
on home plate." Another 7 percent inherited at least $50 million or a "large and prosperous company,"
12 percent inherited at least a million bucks or a decent-sized business or startup capital from
a relative, and 22 percent were "born on first base," into an upper class family or got a modest
inheritance or startup capital
There's a lot here, John, but for the moment some comments about for-profit universities in the
US. First, I am not sure the numbers have declined in the way implied by your language - I'd need
to check, but last I read they were still thriving in terms of numbers and income. And I expect
them to expand with the new administration. Second, you might want to say something about their
graduation rates - they are spectacularly low. Basically, they gobble up huge amounts of public
resources without showing much at all return. Third, though, its worth remembering the the US
lacks any kind of systematic vocational/job training/retraining system. Someone wants to retrain
as a welder, they go to a community college or a for-profit university, usually taking a Pell
Grant with them (the majority of Pell Grant recipients are not the 18-22 year old students it
was designed for, but older workers seeking retraining). In fact it is really expensive to train
a welder, so the institution (whether public, or for-profit) creates all sorts of additional requirements
that are cheap to provide, but which cost the same for the student - and the student ends up taking
lots of classes he's not interested in and dealing with a labyrinth of requirements, with very
little counseling. There's a lot of bad behavior, from both for-profits and public institutions
in the space in which they are serving (which is not traditional, start-of-adulthood, 4-year degrees).
Worth reading Bowen and McPherson, Lesson Plan, which is a quick and informative read.
engels 12.30.16 at 2:59 pm
In a modern society, education is the most important single factor determining a person's
life chances.
You are exaggerating about Prince Charles. He got two A-levels, a B in History and a C in
French.
And is really doing better than you? I don't know how how your career has gone, but he is
68 years old and still an intern.
What say you then of the head of the firm?
harry b 12.30.16 at 11:04 pm
engels
@11 - depends where you are. IN the US a PhD earns you more (over the life course) than a Bachelor's,
but less than a Master's or a Professional degree. But that's presumably because people taking
Masters and Professional degreea do so for the purpose of getting a more lucrative job whereas
presumably people doing PhDs do so for other reasons (my students choosing between a PhD and a
Law degree know which is going to earn them more money).
@Engels For the moment, the statement you are concerned about is true for the majority of the
population – I don't think the average reader would take it as referring to Prince Charles or
Paris Hilton.
But, as Piketty suggests, and as I've pointed out before, it's ceasing to be true.
IN the US a PhD earns you more (over the life course) than a Bachelor's, but less than a
Master's or a Professional degree
Harry – is that limited to certain masters' degrees that are either purely professional (MBA,
MPA, some accounting degrees, some engineering degrees, etc.)? (Maybe also a JD, if that's how
you want to consider it.) I'd be very surprised if it applied to, say, someone with an MA in English
or History or Philosophy or many other fields (Or even to MFAs). (I'd even be surprised if a masters
in, say, social work or education, or educational psychology typically lead to earning more money
than a Ph.D., but I'm not sure. Even with an MPA, I'd be a bit surprised.) I'm not sure if it
makes that much difference to the over-all argument, but I suspect that the number of masters
degrees that typically lead to making more than a PhD is pretty limited.
"In a modern society, education is the most important single factor determining a person's
life chances."
This isn't true depending on what you mean about life chances. If you define that as happiness
and wellbeing, then family life and your mother's mental health when you are growing up, and your
own emotional wellbeing by age 16 are critical defining factors, more important than educational
qualifications.
I wrote on John Quiggin's blog recently I saw some interesting research on Facebook posted
by the World Economic Forum, about the factors that influence whether someone is happy and has
a high wellbeing score. Copying from that comment, this research says that inequality isn't the
most important thing and also that educational qualifications aren't the major factor in deciding
an adult's life satisfaction, but Emotional Health at age 16 is the major factor. Family income
contributes higher to someone's Qualifications (0.16) , but the major contributor to Emotional
Health is not family income (0.07), but their mother's mental health (0.19). The conclusions are
that family life and the quality of schools, and also physical and mental health, are more important
for someone's life satisfaction, than inequality is. Not that I am saying high levels of inequality
isn't a problem, but I think the research is interesting nonetheless.
Hawaii doesn't have local financing for schools. We have a statewide DOE. In possibly related
news, we have the highest rate of private school attendance in the nation.
Matt - I'm sure you're right - -the stat is for all people with Masters degrees (but not PhDs)
compared with all who have only Bachelors degrees and all who have PhDs.
Thing is the vast majority of people with Masters degrees do not hold them in traditional academic
disciplines. But, also, in many professions, just having a Masters raises your salary (in those
professions PhDs often do as well, but not by enough more to be worth the investment and risk
of non-completion). Also we're talking lifetime expected earnings here - someone with a PhD might
earn more in a year than someone with a Masters, but they have foregone several more years of
earnings.
The most important individual predictor of getting eaten by lions in first century Rome was being
a Christian. However, with hindsight I don't think improving everyone's access to Pagan worship
would have been the best way of helping those people
engels 12.31.16 at 4:12 pm
Another stat I saw recently which I can't now find is that the income boost from education
varies massively across capitalist countries. The 'return' on a college degree (e.g.) is much
higher in US iirc than it is anywhere else.
Anyway, I'd love to live in a world in which good public education and proper mental health
care were provided to all as a universal right, and not because they improve their chances of
not dying on the streets. That isn't an objection to the main (pro-public-ed) thrust of the post,
most of which I agreed with.
I think you need to work on the last part. If we look at education as an market transaction it's
the parents who are the customers, not the children. Parents make the decisions and pay the costs,
and it seems wrong to suppose they necessarily do this without access to information about the
quality or worth of the 'product' they are 'purchasing'.
Ask any affluent parent about the best school districts in their county, or the best schools
within their school districts, and you'll get confident and well informed answers.
And of course these parents act on this knowledge by spending money by buying houses in
neighborhoods with good schools. Given local funding, in the US we get a nasty positive feedback
loop that creates huge inequalities at the expense of less affluent parents -- better schools
mean higher real estate prices which means higher assessed values which means more tax revenues
for funding the better schools which means they get even better. The less affluent are steadily
priced out of this market, and their choices dwindle -- they're stuck with crappy schools.
In short, prime facie the market model actually works for primary and secondary education for
the reasonably wealthy. What makes it work, however, guarantees it won't work for the less wealthy.
It's easy to see the attraction of schemes promising 'school choice' to those who as things stand
don't have it.
Harry 12.31.16 at 5:12 pm
"Another stat I saw recently which I can't now find is that the income boost from education
varies massively across capitalist countries"
Yes: roughly speaking, the flatter the income distribution, the smaller the return on additional
years of education (in terms of income - not, though, access to positions, which still carry with
them all sorts of non-pecuniary benefits, including better health and longer life though, again,
in more egalitarian countries these benefits are less too, and because health and longevity are
better at the lower end).
"engels @11 - depends where you are. IN the US a PhD earns you more (over the life course)
than a Bachelor's, but less than a Master's or a Professional degree. But that's presumably because
people taking Masters and Professional degreea do so for the purpose of getting a more lucrative
job whereas presumably people doing PhDs do so for other reasons (my students choosing between
a PhD and a Law degree know which is going to earn them more money)."
At the risk of thread derailment, they likely don't, since they don't know the salaries, and
don't know the odds.
Thanks, Harry – I hadn't been considering the effect of extra years spent in school, but that's
surely relevant (and not just for more "professional" degrees, I assume. Someone who leaves a
history/philosophy/english PhD program w/ an MA after two years and then gets a job will probably
earn more than someone who spends 8+ years in the program and then several years w/ questionable
employment, maybe w/o a TT job on the other side, and no more, perhaps less, qualified than the
person w/ the MA.)
Ok - my students know which is more likely to earn them more money. And I am using 'my' more
restrictively than I should - I try to ensure that students with whom I discuss their futures
have at least the information I do about the prospects associated with the different trajectories.
And for most of them who are actually choosing between a disciplinary PhD and Law degree, I
am pretty sure the probabilities in terms of income favor the Law degree: why do you think
the contrary?
Kurt Schuler 12.31.16 at 11:37 pm If India is enough of an English-speaking country for you,
you may wish to consider the demand for private schooling there, even among the poor.
The number of students involved dwarfs Sweden or Chile or most anywhere else. A place to start
is James Tooley's book The Beautiful Tree.
Harry 01.01.17 at 6:08 pm For anyone interested, College Board produces a nice report on how
higher ed pays off in the US: last edition was 2013, and it here:
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Lindsay Hill Nick 7 months ago I hadn't thought about it in the context of working from home. Makes total sense - gives you that physical cue to switch between 'work mode' and 'home mode'
For the last couple of years, employment growth has been falling on trend, by both measures. But currently, establishment-survey employment is growing at 1.6% per year, and household survey employment is growing at 1.0% per year. The latter number is a lot closer to 0.8%. The establishment survey is what it says - a survey of establishments. The household survey is a survey of people. The advantages of the establishment survey are that it covers a significant fraction of all establishments, and reporting errors are less likely - firms generally have a good idea how many people are on their payrolls. But, the household survey has broader coverage (includes the self-employed for example) of the population, and it's collected in a manner consistent with the unemployment and labor force participation data - that's all from the same survey. There's greater potential for measurement error in the household survey, as people can be confused by the questions they're asked. You can see that in the noise in the growth rate data in the chart.
This chart looks at the ratio of household-survey employment to establishment-survey employment. Over long periods of time, these two measures don't grow at the same rate, due to changes over time in the fraction of workers who are in establishments vs. those who are not. For long-run employment growth rates, you should put more weight on the household survey number (as this is a survey of the whole working-age population), provided of course that some measurement bias isn't creeping into the household survey numbers over time. Note that, since the recession, establishment-survey employment has been growing at a significantly higher rate than household-survey employment.
Here, focus on the last year. LFPR is little changed, increasing from 62.9% to 63.0%, and the same is true for EPOP, which increased from 59.8% to 60.0%. That looks like a labor market that has settled down, or is close to it.
So, by this measure the labor market is at its tightest since 2001. Job openings are plentiful relative to would-be workers.
In the chart, U3 is the conventional unemployment rate, and U6 includes marginally attached workers (those not in the labor force who may be receptive to working) and those employed part-time for economic reasons. The U3 measure is not so far, at 4.7%, from its previous trough of 4.4% in March 2007, while the gap between current U6, at 9.2% and its previous trough, at 7.9% in December 2006, is larger. Two caveats here: (i) How seriously we want to take U6 as a measure of unemployment is an open question. There are problems even with conventional unemployment measures, in that we do not measure the intensity of search - one person's unemployment is different from another's - and survey participants' understanding of the questions they are asked is problematic. The first issue is no worse a problem for U6 than for U3, but the second issue is assuredly worse. For example, it's not clear what "employed part time for economic reasons" means to the survey respondent, or what it should mean to the average economist. Active search, as measured in U3, has a clearer meaning from an economic point of view, than an expressed desire for something one does not have - non-satiation is ubiquitous in economic systems, and removing it is just not feasible. (ii) What's a normal level for U6? Maybe the U6 measure in December 2006 was undesirably low, due to what was going on in housing and mortgage markets.
This measure is still somewhat elevated relative to pre-recession times. However, if we look at short term unemployment (5 weeks or less), this is unusually low:
As well, the insured unemployment rate (those receiving unemployment insurance as a percentage of the labor force) is very low:
To collect UI requires having worked recently, so this reflects the fact that few people are being laid off - transitions from employment to unemployment are low.
According to standard Friedman Phillips-curve logic, we should see a negative correlation in the chart, but the correlation is essentially zero.
1 comment:
Avraam J Dectis March 21, 2017 at 7:58 AM
What a bunch of morons !!!