Workers of the World Unite
Posted: May 2, 2013 Filed under: income inequality, worker rights | Tags: 401(k), diminishing real wage, Felix Salmon, Henry Blodgett, Income Inequality, Thomas Friedman whore 8 Comments
We continue to see abuse of labor from the horrible explosions in a West, Texas chemical plant to the collapse of a building in Bangladesh. US workers continue to get the shaft when it comes to working harder and more productively for less. It is a sad trend that just keeps reaching new records. The gap between incomes going to workers and profits going to owners–mostly passive stockholders–continues unabated. This gap does not reflect a lack of labor productivity. It appears to reflect mostly the ability of capital owners to gamble themselves into strong positions. Industrialists are force to drive down costs to attract capital and to do some very short sighted things. The rush to increase ROE with no thought to other factors is a very bad omen for this country.
Henry Blodgett provides some very depressing May Day graphs at Business Insider.
Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. If you’re a shareholder, that seems like good news (in the very short term, anyway). Alas, most people aren’t shareholders. And for folks whose investment horizon is longer than “this quarter” and “this year,” it’s actually bad news. Companies are under-investing in their employees and the future.
Normally, high profits are a good sign. What is disturbing is the the under-investing and the unequal increase in wages. Labor–in theory–should gain with productivity gains. This tends to stoke the growth of an economy and of a solid middle class. This trend means there is less purchasing power among the majority of households and more wage and job insecurity. This is Felix Salmon’s take.It’s May Day, and Henry Blodget is celebrating — if that’s the right word — with three charts, of which the most germane is the one above. It shows total US wages as a proportion of total US GDP — a number which continues to hit all-time lows. Blodget also puts up the converse chart — corporate profits as a percentage of GDP. That line, you won’t be surprised to hear, is hitting new all-time highs. He’s clear about how destructive these trends are:
Low employee wages are one reason the economy is so weak: Those “wages” are represent spending power for consumers. And consumer spending is “revenue” for other companies. So the short-term corporate profit obsession is actually starving the rest of the economy of revenue growth.
In other words, we’re in a vicious cycle, where low incomes create low demand which in turn means that there’s no appetite to hire workers, who in turn become discouraged and drop out of the labor force. Blodget’s third chart is one we’re all familiar with: the employment-to-population ratio, which fell off a cliff during the Great Recession and which will probably never recover. The current “recovery” is not actually a recovery for the bottom 99%, for real people who need to live on paychecks. And today is exactly the right day to point that out.
And yet that’s Tom Friedman’s column this May Day:
If you are self-motivated, wow, this world is tailored for you. The boundaries are all gone. But if you’re not self-motivated, this world will be a challenge because the walls, ceilings and floors that protected people are also disappearing. That is what I mean when I say “it is a 401(k) world.”
This manages to be both incomprehensible and incredibly offensive at the same time. I have no idea what Friedman thinks he’s talking about when he blathers on about disappearing protective floors; I can only hope that he isn’t making a super-tasteless reference to the recent disaster in Bangladesh. But it’s simply wrong that today’s world is “tailored” for anybody who happens to be “self-motivated”. Both the self and the motivation are components of labor, not capital, and as such they’re on the losing side of the global economy, not the winning side.
Friedman is a billionaire (by marriage) who — like all billionaires these days — is convinced that he achieved his current prominent position by merit alone, rather than through luck and through the diligent application of cultural and financial capital. His paean to self-motivation recalls nothing so much as Margaret Thatcher’s “there is no such thing as society” quote: “parenting, teaching or leadership that ‘inspires’ individuals to act on their own will be the most valued of all,” he writes, bizarrely choosing to wrap his scare quotes around the word “inspires” rather than around the word “leadership”, where they belong.
True leadership, in a society where the workers are failing to be paid even half the fruits of their labor, would involve attempting to turn the red line in Blodget’s chart around, and to spread the nation’s prosperity among all its citizens. Rather than telling everybody that they’re “on their own” and that if they’re not a success then hey, they’re probably just not “self-motivated” enough.
The ultimate Friedman kick in the balls, however, doesn’t come from his lazily meritocratic priors. Rather, it comes from his overarching metaphor: the idea that if you have a 401(k) plan, then you’re somehow in charge of your own destiny. Friedman might be right that we’re living in a 401(k) world, but if he is then he’s right for the wrong reason. In Friedman’s mind, a 401(k) plan is an icon of self-determination: you get out what you put in. “Your specific contribution,” he writes, italics and all, “will define your specific benefits.”
We are learning more and more each day on how the finance industry games the kinds of investments available to you in those plans. We also know that mega corporations are getting congress to defund OSHA and any regulatory agency that watches over worker safety. Many investments are also subject to whacked performance because of excessive speculation that is encouraged by our tax laws. This has destroyed home values during the Great Recession and eaten up many folks retirement plans and savings. Frankly, it’s difficult to see how any one that relies on their sweat and has no rich family connections these days even crawls into the middle class. All of these things add up to major insecurities and risks. This is simply not the way things are supposed to work. But, it is the world that the Koch Brothers and others have carefully crafted by making politicians and pundits whores to their agenda of greed.
Pity the poor working man and woman.
Thursday Reads
Posted: May 2, 2013 Filed under: Barack Obama, corporate greed, hunger, income inequality, morning reads, net-neutrality, Reproductive Health, Reproductive Rights, science, The Bonus Class, the internet, U.S. Economy, U.S. Politics, War on Women | Tags: archaeology, cannibalism, CEO pay, Commerce Department, DOJ, emergency contraception, FCC, fracking, Jamestown Colony, JC Penney Co., North Dakota, Obama bundlers, Penny Pritzker, Plan B, Ron Johnson, Tom Wheeler 45 Comments
Good Morning!!
President Obama isn’t looking so “progressive” this morning (what else is new?). Yesterday, his “Justice” department announced they will ignore science as well as the health needs of women and girls by fighting a judge’s order to make Plan B emergency contraception available over-the-counter without age limits. NYT:
The appeal reaffirms an election-year decision by Mr. Obama’s administration to block the drug’s maker from selling it without a prescription or consideration of age, and puts the White House back into the politically charged issue of access to emergency contraception.
The Justice Department’s decision to appeal is in line with the views of dozens of conservative, anti-abortion groups who do not want contraceptives made available to young girls. But the decision was criticized by advocates for women’s reproductive health and abortion rights who cite years of scientific research saying the drug is safe and effective for all ages.
“Age barriers to emergency contraception are not supported by science, and they should be eliminated,” Cecile Richards, the president of Planned Parenthood Federation of America, said in a statement on Wednesday.
In December 2011 the secretary of health and human services, Kathleen Sebelius, blocked the sale of the drug to young girls without a prescription, saying there was not enough data to prove it would be safe. In doing so, Ms. Sebelius took the unprecedented step of overruling the Food and Drug Administration, which had moved, based on scientific research, to lift all age restrictions.
I could use some profane language here, but I’ll spare you for the moment. You may be mumbling to yourself too, after you read about Obama’s latest picks for the FCC and Commerce Department.
First the FCC. The New York Times reports: Telecom Investor Named to Be F.C.C. Chairman.
Tom Wheeler, President Obama’s pick to be the next chairman of the Federal Communications Commission, knows all about the most advanced telecommunications systems — of the 19th century.
In his 2008 book “Mr. Lincoln’s T-Mails: How Abraham Lincoln Used the Telegraph to Win the Civil War,” Mr. Wheeler, an investor in start-up technology and communications companies, documents how Lincoln was an “early adopter” of what has been called “the Victorian Internet.”
Lincoln’s championing and advancement of popular uses of the telegraph are not unlike the challenges Mr. Wheeler is likely to face as chairman of the F.C.C., which is waging an intense battle to keep Internet service free of commercial roadblocks and widely available in its most affordable, up-to-date capabilities.
Mr. Wheeler’s qualifications for “one of the toughest jobs in Washington,” Mr. Obama said, include a long history “at the forefront of some of the very dramatic changes that we’ve seen in the way we communicate and how we live our lives.”
“He was one of the leaders of a company that helped create thousands of good, high-tech jobs,” Mr. Obama said, referring to Core Capital Partners, the Washington investment firm where Mr. Wheeler is a managing director. “He’s in charge of the group that advises the F.C.C. on the latest technology issues,” adding that “he’s helped give American consumers more choices and better products.”
They look happy, don’t they?
But does all that qualify Wheeler to protect consumers at the FCC? From Ars Technica:
President Barack Obama today announced his choice to run the Federal Communications Commission. As reported yesterday, the nominee is Tom Wheeler, a venture capitalist who was formerly a lobbyist at the top of the cable and wireless industries, leading the National Cable Television Association (NCTA) and Cellular Telecommunications & Internet Association (CTIA).
The nomination continues the parade of lobbyists becoming government officials and vice versa, a trend that has favored moneyed interests over the average American citizen and consumer time and again. One can take solace in the fact that Wheeler will be tasked with implementing the communications policies of President Obama, who says he is eager to fight on behalf of consumers and to maintain thriving and open Internet and wireless marketplaces.
But the same President who said “I am in this race to tell the corporate lobbyists that their days of setting the agenda in Washington are over” when he was running for office has given the FCC’s top job to a former lobbyist. Wheeler donated $38,500 to Obama’s election efforts and helped raise additional money for Obama by becoming a “bundler,” arranging for large contributions from other donors after hitting legal limits on personal contributions.
Not surprisingly, the cable and telecom companies that Wheeler springs from are ecstatic about the nomination.
Gotta get rid of those nasty regulations that protect Americans from price gauging, internet censorship, and all that bad stuff.
Penny Pritzker
Next up, behold Obama’s nomination for Commerce Secretary, old pal Penny Pritzker.
Making official what many Democrats have expected for weeks, President Obama plans to nominate Chicago business executive Penny Pritzker, a longtime political supporter and heavyweight fundraiser, as his new Commerce secretary on Thursday morning.
Pritzker’s nomination could prove controversial. She is on the board of Hyatt Hotels Corp., which was founded by her family and has had rocky relations with labor unions, and she could face questions about the failure of a bank partly owned by her family.
With a personal fortune estimated at $1.85 billion, Pritzker is listed by Forbes magazine among the 300 wealthiest Americans. She is the founder, chair and CEO of PSP Capital Partners, a private equity firm, and its affiliated real estate investment firm, Pritzker Realty Group. She played an influential role in Obama’s rise from Illinois state senator to the nation’s 44th president, serving as Obama’s national finance chair in his first campaign for the White House and co-chair of his reelection campaign.
The president is expected to make the announcement at 10 a.m. at the White House.
If confirmed by the Senate, Pritzker would take charge of the administration’s efforts to build relations with business leaders who were often on the sharp end of the president’s first-term rhetoric.
Sigh . . .
This next story is guaranteed to make your blood boil. Bloomberg reports:
It’s been almost three years since Congress directed the Securities and Exchange Commission to require public companies to disclose the ratio of their chief executive officers’ compensation to the median of the rest of their employees’. The agency has yet to produce a rule.
So Bloomberg decided not to wait around any longer and figured out the ratios for us. See the chart at the above link. More:
CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law
Former fashion jewelry saleswoman Rebecca Gonzales and former Chief Executive Officer Ron Johnson have one thing in common: J.C. Penney Co. (JCP) no longer employs either.
The similarity ends there. Johnson, 54, got a compensation package worth 1,795 times the average wage and benefits of a U.S. department store worker when he was hired in November 2011, according to data compiled by Bloomberg. Gonzales’s hourly wage was $8.30 that year.
Across the Standard & Poor’s 500 Index of companies, theaverage multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, the data show. The numbers are based on industry-specific estimates for worker compensation.
Almost three years after Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remain unknown. As theOccupy Wall Street movement and 2012 election made income inequality a social flashpoint, mandatory disclosure of the ratios remained bottled up at the Securities and Exchange Commission, which hasn’t yet drawn up the rules to implement it. Some of America’s biggest companies are lobbying against the requirement.
“It’s a simple piece of information shareholders ought to have,” said Phil Angelides, who led the Financial Crisis Inquiry Commission, which investigated the economic collapse of 2008. “The fact that corporate executives wouldn’t want to display the number speaks volumes.” The lobbying is part of “a street-by-street, block-by-block fight waged by large corporations and their Wall Street colleagues” to obstruct the Dodd-Frank law, he said.
Are you angry yet? These greedheads are going to keep pushing the envelope until Americans wake up and take to the streets with pitchforks and dust off the guillotines.
My birthplace, North Dakota is changing rapidly–and maybe not in a good way. It turns out the state’s oil is even more plentiful than anyone has realized up till now.
The sea of oil and natural gas underneath North Dakota is far larger than first thought.
There are 7.4 billion barrels of recoverable oil in the western part of the state and extending into Montana, according to the latest estimate by the U.S. Geological Survey.
That’s more than twice the oil the USGS estimated could be recovered five years ago. What’s more, the USGS has nearly tripled its estimate of the natural gas available in the area.
The revised totals could make the North Dakota field the greatest oil and gas find ever in the continental United States, topping the fabled East Texas field that made Texas synonymous with oil wealth. And it would put North Dakota second to Prudhoe Bay as the largest oil producer in U.S. history.
And even this estimate may have to be “revised upward”:
“We think it’s even a little bit conservative,’’ said Ron Ness, president of the North Dakota Petroleum Council.
The new estimate will give fresh momentum to an economic boom within the state that has made it the fastest growing in the nation in both population and incomes. Per capita income has risen to $52,000 a year, sixth-highest in the nation, and once quiet farm towns have been overwhelmed by oil field workers, creating shortages of housing and services.
The USGS said the drilling of 4,000 wells since 2008 in what is known as the Bakken formation has given geologists a better idea of the riches underground. The new analysis also highlights the rapid ascent of North American oil and gas production driven by the advent of the technique known as hydraulic fracturing.
I guess I’m happy about the new jobs and population growth, but it will be sad if North Dakota no longer has clean air and vast open spaces.
Four shallow chop marks on the top of the girl’s skull, evidence of cannibalism during the “starving time” over the winter of 1609-1610. (Smithsonian Institution / Don Hurlbert)
You may have heard about this fascinating story–it was up toward the top of Google News much of yesterday. Archaeologists have found strong evidence that Starving Settlers in [the] Jamestown Colony Resorted to Cannibalism. From Smithsonian Magazine:
The harsh winter of 1609 in Virginia’s Jamestown Colony forced residents to do the unthinkable. A recent excavation at the historic site discovered the carcasses of dogs, cats and horses consumed during the season commonly called the “Starving Time.” But a few other newly discovered bones in particular, though, tell a far more gruesome story: the dismemberment and cannibalization of a 14-year-old English girl.
“The chops to the forehead are very tentative, very incomplete,” says Douglas Owsley, the Smithsonian forensic anthropologist who analyzed the bones after they were found by archaeologists from Preservation Virginia. “Then, the body was turned over, and there were four strikes to the back of the head, one of which was the strongest and split the skull in half. A penetrating wound was then made to the left temple, probably by a single-sided knife, which was used to pry open the head and remove the brain.”
Much is still unknown about the circumstances of this grisly meal: Who exactly the girl researchers are calling “Jane” was, whether she was murdered or died of natural causes, whether multiple people participated in the butchering or it was a solo act. But as Owsley revealed along with lead archaeologist William Kelso today at a press conference at the National Museum of Natural History, we now have the first direct evidence of cannibalism at Jamestown, the oldest permanent English colony in the Americas. “Historians have gone back and forth on whether this sort of thing really happened there,” Owsley says. “Given these bones in a trash pit, all cut and chopped up, it’s clear that this body was dismembered for consumption.”
There’s much more at the link.
Now it’s your turn. What are you reading and blogging about today? Please post your links on any topic in the comment thread, and have a great day!
The Current State of Op Ed Writing or Things that Belong in a Hello Kitty Diary
Posted: May 1, 2013 Filed under: The Media SUCKS, We are so F'd | Tags: David Brooks, Maureen Dowd, Op Ed criticism, op ed writers 12 Comments
Okay, so I was torn between using Hello Kitty Diary and Hello Kitty Litter Box in the title of this thread because I am so tired of seeing hacks get money and column space in what used to be the world’s great papers. Let’s face it! My cats’ litter box is a better use of a newspaper that’s filled with the inane ramblings of the likes of Ross Douthat, Maureen Dowd, David Brooks, George F. Will, and well, you get my drift. There were op ed writers with whom I disagreed but whose arguments, evidence, and writing style made for compelling reading and arguments. The group that’s left to us now should still be doing penmanship exercises in second grade.
So, obviously I was inspired to write this. I use the world ‘inspired’ loosely because it was more like I was influenced by the painful awareness of cats screeching in the alley looking for attention from other heat-seeking cats. The primary source of screeching came from MoDo today who Charlie Pierce promptly diced and sliced in “In Which MoDo Loses A Fight With James Madison” in his Esquire blog
Maureen Dowd has fashioned herself another Chronic Ward of a newspaper column today on her now-regular theme of what a wimpety-wimp-wimp Barry Obama is, and why she never should have let him take her to prom instead of the hunky Andrew Shepherd from The American President who, while admittedly fictional, never would take this guff from actual human beings like John Boehner and Eric Cantor and Louie Gohmert, to which latter we give the benefit of a considerable doubt on this score. From the available evidence (again), and for all the relevance her insights have on what’s actually going on in American politics, Dowd once again seems to be writing from an assisted-living facility on the far side of a world Beyond The Planet Of The Ultra-Vixens. First of all, she, along with Jonathan Karl, seems to be overly concerned with the condition of the president’s “juice,” which she seems to feel is less fortified with essential vitamins and iron than the juice of a president should be. And, somewhere in the Beyond, Freud gives up the business entirely and opens a cigar store.
Pierce offers this more succinct explanation.
Look, I make the same criticism of the president from time to time, but mine is based on what I believe is the obvious empirical fact that the Republican party has gone insane and that the president has been painfully slow in coming to realize that he is dealing with lunatics. I don’t find this “professorial” or “high-minded.” I just find it wrong. But, then again, I don’t measure politics by the inseam, either.
What is it about reality that most of the op ed writers don’t appear to get these days? Well, I stumbled across an equally good take down and explanation over at NY magazine written by Jonathan Chait called “David Brooks and the Role of Opinion Journalism”. David Brooks is the nearly the best example of an op ed writer that is a waste of good reading time. He has the dial set to 11 for vacuity nearly every day.
Brooks likes to veer frequently from the beaten path of topicality. He wants us to associate this habit with intellectual honesty. But why should we? One could just as easily think of it as an evasive tactic designed to spare him from confronting the uncomfortable pathologies of his own side.
Brooks goes further, smuggling into his schema notions not merely unrelated to but actually at odds with intellectual honesty. The detached writer, he argues, “sees politics as a competition between partial truths.” Well, yes, sometimes it is. On the other hand, sometimes politics is not a competition between partial truths. If you’re committed a priori to always seeing politics as a competition between partial truths, you will render yourself unable to accurately describe the times when it’s not and find yourself writing things that are provably untrue. Writing things that are provably untrue — rather than, say, being irritating — ought to be the central thing to avoid.
It’s a shame Brooks has done such an injustice to the topic, since the question of standards for opinion journalism is a pretty important and underexplored one. Straight news reporters tend to lump opinion writing of all forms into the same bin — punditry, essays, agitprop — and to therefore shy away from holding it to any defined standard. (This is why, for instance, the Washington Post blithely lets George Will misstate facts about climate science on its op-ed page.)
So, I would like to say that the standard for op ed “journalism” is there is no honor among thieves, but given their platform, it’s hard to just write off 
99.99% of them as hapless hacks and ignore them. Chait actually offers up some common sense advice on how to make an argument instead of publishing your dreamy-eyed Potomac platitudes. Most of them are common sense like don’t set up and attack straw men and avoid reflexive equivocation and black-and-white moralism. These last two are staples of op ed pages today. Douthat is a lousy writer who specializes in his own specious form of black-and-white moralism to the point that I wonder if he ever leaves his house or was actually weaned by his mother. This glib last bit from Chait sums up the state of op ed writing today for me. I’ve edited it to what it should be.
If you’re going to write
a guide toopinionwritingthat’s completely self-aggrandizing, you should probably own up to it.
Not only should you own up to it, you should stop pretending it’s anything else but self-aggrandizing twaddle. I’m tired of seeing endless self-pleasuring in high circulation papers. I am so not into that!!!
But, I see this as the main stay of today’s opinion writers. It is always about them and never about their topic, the actual good of the country or an idea, or the greater search for truth. WAPO and NYT excel at placing free range WATBs on their op pages who only engage in self-aggrandizing and who never see the world outside the thunderdomes of Manhattan and the DC beltway. Most of them are so comfortably snuggled into their socio-economic status they probably couldn’t tell a homeless person from a fireplug.
Thankfully, there are now blogs and there are blogger/writers like Pierce and Chait or I would be one very depressed Kat who would consider reading Romance Novels or Pop! Star Magazine in lieu of David Brooks or Maureen Dowd. They are all about on the same level of intellectual discourse and reality. And for that, the NYT put up a paywall and WAPO wants to still think of itself as the paper of investigative journalism. Douthat belongs on the pages of Catholic Voice or maybe some nice rag promoting the return of The Inquisition. None of these folks are the serious human beings they presume themselves to be.
Here kitty, kitty!!! I just changed your litter box and its nicely lined!!!
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