Tag Archives: economy

Job Fail

As mentioned, I have spent the last few days on vacation. While there I got to do something I rarely do these days which is to read a fiction book from cover to cover in a few days. For this selection I chose a Tom Robbins book I haven’t read – it wasn’t recommended, I just got it at some sale a while back – the book is Half Asleep in Frog Pajamas.

It was amusing enough to hold my interest, I can’t really recommend it for great reading but there were several parts that really did intrigue me – especially because the copyright is eighteen years old and several of the ideas seem extremely contemporary (like the instability of the stock market system and how it’s being gamed by insiders).  I’d like to cite a passage here describing the lecture of the antagonist – a former stock broker star:

… in our society, jobs are an aberration, a flash in the pan…People have always worked, he explains, but they have only held jobs – with wages and employees and vacations and pink slips – for a very short time. And now, with the proliferation of cybernetics and robotics and automation of all types and degrees, jobs are on the way out again. In the context of history, jobs have been but a passing fancy.

Nowadays, he would have you believe, the state uses jobs, or rather the illusion of jobs as a mechanism for control. When there is a public outcry about some particularly vile instance of deforestation, wreckage, or pollution, the “pufftoads” hasten to justify the environmental assault by trumpeting the jobs it allegedly will save or create – and then the protests fade like the rustle of a worn dollar bill. Foreign policy decisions, including illegal and immoral acts of armed intervention, likewise are made acceptable, even popular, on the grounds that such actions are necessary to protect American jobs. Virtually every candidate for public office in the past seventy years has campaigned with the rubber worm of “more jobs” dangling from his or her rusty hook, and the angler with the most lifelike worm snags the votes, even though all voters except the cerebrally paralyzed must recognize that there are going to be fewer and fewer jobs as time – and technology – progresses.

I kept checking the date on this book. This is fiction from 1994.

Jobs are the magical trump card that politicians reach for time and again. Jobs are why we can’t say goodbye to destructive industry, jobs are why we rally at the advent of every new product – no matter the quality or usefulness. Jobs are why we can’t focus on health, safety, or the environment. Jobs are why our military has any civilian support; our military has become a bastion of the job based economy. Without the relatively superior pay and benefits, our all volunteer military would certainly dwindle to a fraction of its size. The military knows that a dependable, high quality work force is impossible without basic benefits of insurance, health, home security, education, retirement plans, and clear working contracts. For all that the military has not gotten right, the one thing it does get right is providing the basics for their employees and their families.

What “job” means in America is a package deal of temporary security – that could possibly lead to longer term security (but the likelihood of that constantly wanes). If someone has a “job” they have a position of usefulness secured for pay, as well as some other securities like the promise of more regular work, a semblance of safe conditions, reasonable shift lengths, healthcare options, retirement plans, building a knowledge or credibility base, as well as a social network of those in similar situations as yourself.  What has happened is that the previously agreed upon social contract of security and longevity is now void. With a global economy, American workers now compete with companies that have built their policy on not providing workers with safe and secure conditions for the short or long term. Our system of distribution and an assembly line that wraps around the globe means that tracing inhumane treatment is a lost cause for the average consumer. The likelihood that some of the workers that processed our food, clothing, shelter, retail goods, and even medical goods were mistreated or forced to work in substandard situations is extremely high. The American workforce has simply joined the legion of mistreated and exploited international workers in a globalized economy.

If we want a permanent solution to our own short term and long term security, our country must establish a minimum standard of living – kind of like the military did for an entry level recruit with a family. If someone goes through life trying, working, contributing to society, they should be able to afford a minimum standard of living – one that allows for dignity in our food, shelter, health, liberties, and pursuits of happiness. We know how to do it – the military is a part of our government – we just have to find the voice to claim that being American means having dignity and compassion, it means that we care about “strangers” because we have humane American standards.

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A 1%er’s Opinion

The 1% – are they really that much different than the rest of us? Income disparity is obviously a huge issue in this country but at least one 1%er feels proud, justified, and like everyone else – especially art history majors – are doing it wrong. Edward Conrad -a Bain Capital retiree – is not just a 1%er but an .1%er, his wealth is estimated to be in the hundreds of millions and he is ready to evangelize his theory of economics in his soon-to-be-published new book, ““Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong”. He sat down with Adam Davidson at the New York Times to explain. From the article:

In a competitive market, all that’s left are the truly hard puzzles. And they require extraordinary resources. While we often hear about the greatest successes — penicillin, the iPhone — we rarely hear about the countless failures and the people and companies who financed them.

A central problem with the U.S. economy, he told me, is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money.

Conrad sees tons of solution to problems and not enough investors willing to take risks like he did and does:

“It’s not like the current payoff is motivating everybody to take risks,” he said. “We need twice as many people. When I look around, I see a world of unrealized opportunities for improvements, an abundance of talented people able to take the risks necessary to make improvements but a shortage of people and investors willing to take those risks. That doesn’t indicate to me that risk takers, as a whole, are overpaid. Quite the opposite.” The wealth concentrated at the top should be twice as large, he said. That way, the art-history majors would feel compelled to try to join them.

Conrad tries to give cover to 1%ers, claiming that they are benefactors for rest of us – measuring in dollars. He claims that for every $1 invested by a risk taker, the public reaps up to $20 in returns! He uses the example of the tapered in part of the soda can at the top and how it saves everyone so much money:

“It saves a fraction of a penny on every can,” he said. “There are a lot of soda cans in the world. That means the economy can produce more cans with the same amount of resources. It makes every American who buys a soda can a little bit richer because their paycheck buys more.”

It might be hard to get excited about milligrams of aluminum, but Conard says that we live longer, healthier and richer lives because of countless microimprovements like that one.

Conrad has a point that there are limitless potential “improvements” and investments, but he doesn’t measure anything except in terms of the market. He may be an admitted devotee to “The Market” as God/moral guidance as was described in Monday’s post, True Religion of the Free Market, his characterizations certainly fit into that pattern. He does not consider for a second that soda is not healthy and that consuming more creates more problems, or that creating more cans adds to the waste stream. In fact, these are the trickle down jobs he would likely point to in that scenario – more work for dentists! more work for nutritionists! more diet pills and programs can be sold! more psychologists will be hired to help people deal with obesity!, more XXL clothes to be made! more doctors will be needed for the host of issues that addiction to high fructose corn syrup can create.

Conrad acts self righteous about the fact that folks like he are willing to take risks that benefit society and society owes the 1%ers even more. He does not mention the costs to society for all of the industriousness of business. He doesn’t recognize that the rest of us have no choice but to assume the health, financial, environmental, and security risks that are created by industry.

Conrad even applied a market based formula to choosing his wife complete with evaluating demographic data, calculating probabilities in geography, calibrating the quality of women available, selecting and ending up with your best statistical probability.

The author notes that Conrad has a mean streak at times even during the interview. He disparages the table of twenty-something strangers that were socializing at a cafe at 2:30pm:

“What are they doing, sitting here, having a coffee at 2:30?” he asked. “I’m sure those guys are college-educated.” Conard, who occasionally flashed a mean streak during our talks, started calling the group “art-history majors,” his derisive term for pretty much anyone who was lucky enough to be born with the talent and opportunity to join the risk-taking, innovation-hunting mechanism but who chose instead a less competitive life.

He is also irritated with Warren Buffet and sees his charitable contributions as arrogant and meddlesome in his view of proper economics:

During one conversation, he expressed anger over the praise that Warren Buffett has received for pledging billions of his fortune to charity. It was no sacrifice, Conard argued; Buffett still has plenty left over to lead his normal quality of life. By taking billions out of productive investment, he was depriving the middle class of the potential of its 20-to-1 benefits. If anyone was sacrificing, it was those people. “Quit taking a victory lap,” he said, referring to Buffett. “That money was for the middle class.”

Many more interesting tidbits like this sprinkle the article. It is assumed that he wants to help his former Bain Capital partner with his election campaign, but some of the statements are so outrageous that he may do just the opposite by affiliating himself. Take this gem:

“God didn’t create the universe so that talented people would be happy,” he said. “It’s not beautiful. It’s hard work. It’s responsibility and deadlines, working till 11 o’clock at night when you want to watch your baby and be with your wife. It’s not serenity and beauty.”

What Conrad does not figure into any of his equations is humanity. He seems to have very little empathy and obviously puts making money as a top priority. He doesn’t seem to understand that people are not obligated to create wealth for others – those “art history majors” have every right to do what they enjoy, and building community with a group of friends not only has value in the warm fuzzy category, but it could even be argued that it builds security – financial or otherwise. When you’re down and out, who will lend you a hand, come help you with car troubles, or give you a ride to work. Conrad doesn’t recognize the value of community at all. Perhaps because his community – Bain Capital – endorses a community of like minds that are focused on money over time with friends, family, serenity, beauty, love, caring, discovery, health or peace. Like other financial “conservatives” (what does that even mean anymore?) Conrad is supremely obedient to the value of authority and his authority is “The Market”.

In my personal opinion, I feel a bit sad for Conrad. I wonder if he’s seen joy in a child’s eyes after discovering something, or if he can enjoy a simple walk in the woods? Does he ever go dancing with his friends, offer a shoulder to cry on, or have one offered to him if he needed it? Making and modifying widgets will eventually fill this planet with garbage (if they’re not biodegradable), production is not always the answer to prosperity and value is not inherent simply because large dollar figures are being exchanged.  I’ll close with this quote from Adam Davidson, Conrad’s interviewer after spending some time with him:

This constant calculation — even of the incalculable — can be both fascinating and absurd. The world Conard describes too often feels grim and soulless, one in which art and romance and the nonrenumerative satisfactions of a simpler life are invisible. And that, I realized, really is Conard’s world.

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Greed is not Good (or God)

Graphic of socialism's "takeover" of the market by The Atlantic.

In America, the cheerleaders of capitalism are happy with the socialist measures and regulations that protect them – like the police that protects their property, the legal system that supports their contracts, the infrastructure that educates their employees, the roads that allow their products to be shipped, the water quality they process with, the airwaves that deliver their commercials, the subsidization of business, the inspections that protect their goods from tainted goods, the military that (literally) fights for them, the public clean up of their pollution, the people dealing with health complications from their poisons, the fire departments that will assist them – then any measures that smack of socialism that do not further their money making or power status are demonized. “Socialist!”, is the current red scare tactic.

Mortgage companies, banks, retailers, service businesses, Wall Street, Ayn Rand, Republicans and conservatives all line up behind the same idea – the idea that the consumer will protect their own interest in financial matters. This principle is pretty much the only imposed moral in the capitalist system – that everyone looks out for themselves and it is a dog eat dog world. It follows a supposed economic law that matches the natural law “of the jungle” – which is kill or be killed (for a visual illustration you can see a video here in a post). If everyone started with the same opportunities, this principle would work better – and everyone will never have the same opportunities – but there is a more serious failure of logic in this basic principle. Gaining money is not the same as surviving, humanity does not figure into the capitalist equation.

In true natural law, some very basic animalistic impulses are in operation – fight or flight insticts, the need for food and water, the need to rear and protect our young, the need for shelter, and conserving energy to insure completion of all of the above before any other activities. Every mammal on the planet acts on these survival principles, humans included. While money may be one method to secure basic survival, it is not always the most efficient means. All of the above survival needs can be met in ways that do not involve money. As we are seeing in the recent upsurge of homesteading and wilderness survival skills popularity, food, shelter and water can be gained without monetary transactions taking place. Bartering can figure in to many goods and services. Co-operatives can be formed that may be comprised of many resources in which money is only one of them. Capitalists cheerleaders operate on the principle that our desire to accumulate money will provide all the regulation needed to keep our capitalist system honest. Obviously they are wrong.

The disasters that capitalism create, especially as legalese and complexities of format escalate, are massive. The mortgage crisis, the banking bailouts, the World Bank, the IMF, oil speculation, Wall Street bonuses rewarding failure, massive layoffs – these are all examples of how capitalism fails humanity (and the list could go on).

Exercise is needed for all of us to survive, if we don’t move around, we atropy and get sick (not to mention that we would then need help getting sustenance). Some of us humans are excellent at exercising: we may be natural athletes, choose to train, have an active lifestyle, or become fit as a by product of a life of survival. Some of us humans are very bad at getting exercise: we may have a sedentary lifestyle, have a poor diet which hinders energy/movement, hate exercise, or be injured/ill. Imagine for a moment if physical fitness was substituted for economic fitness, and Wall Street bonuses were distributed according to physical fitness tests, how unfair that might seem to those with extra poundage, or asthma, or disabilities. Ironically physical fitness is actually much more tied to our literal survival than accumulating numbers in an account.

Very few of us have trained to be elite economists or have the natural ability to be masterful with our finances. Most of us have only taken high school level consumer education (if that) and almost none of us are educated in the legal acrobatics involved in “creative” mortgages or finances. Like the exercise metaphor, most of us do the minimum amount of effort required to keep things running smoothly – that actually applies to pretty much everything that isn’t a personal passion. Only those with a passion for capitalism do well in a capitalist system.

Lots of folks would apparently rather gaze lovingly at a pile of cash than go to a little league game, they’d rather count their coins than help a friend in need, they don’t see the point of having a rich life when they could simply be rich – they’re the Hoarding Horde. For them, greed is good, greed is God. There is no calling in life above making money and they have no sympathy for those of us that have to prioritize things – like the survival of our family – to be more important than figuring out the latest tricks of the marketplace. They have convinced themselves and been supported with the likes of Ayn Rand, Ronald Reagan, and the Republican leadership that holds up economic Darwinism as a model. If they can’t see or accept that a purely capitalist system is extremely cold hearted (foolish babies would rather eat a quarter than spend it), they might need to join the ranks of the other sociopaths that are screwing the world up for the rest of us (which I wrote about here).

America is already a mix of socialism and capitalism. It is American to regulate, it is American to tax, it is American to care about those around us, it is American to succeed through your own work – all of these ideas can live together in harmony. We can tolerate those bits that aren’t our favorites – like paying taxes or keeping social programs we don’t use – because they come in the parcel that is America and it means we have the freedom and liberty to do some other things we really like. When one idea gains too much power and acts as an authoritarian force, we stop acting like America. Right now the capitalist forces are in power – Republicans are proud of it, Dems try to hide their ties, but the capitalists are winning. Because capitalists are on top, they use their position to cry “socialist!” at the slightest suggestion of collective negotiating power.

It’s time to stop. Socialism is not a bad word, democratic socialism means putting policies in place due to the wishes of the people, not a dictator. As George W. Bush lamented several times, the Presidency is not a dictatorship, and even if the President wanted to command us to implement socialism, our political system does not work that way. Governing policies must make their way through Congress which implies a tacit approval from the people.

Some of us have better things to do than fuss over money; we just need to make sure the bills are paid so that we may continue with what really counts for us. A different economic class of people choose to manipulate other people’s money and the rules surrounding them so that they can rake in more for themselves. The people in group A don’t want to be like the people of group B and it is pretty callous to insist that they should rearrange their priorities in order to “make it”, that is in order to have a decent job, shelter, and a nurturant environment for our families.  That is why the concept of the living wage was developed, so we could have an understanding of what is decent in our capitalist society, because “the market” doesn’t care about hunger, shelter, sickness, or families. Money in the bank is not the same as a full, rich and virtuous life; choosing a life that does not focus on money does not make you unAmerican or immoral; it makes you human.

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