Monday, June 20, 2011
The Great Recession and Corporate Boldness: Why no American company will sacrifice profit for employees
So it’s a Catch-22: You can’t get hired unless you have experience; but you can’t get experience unless you’re hired. With technology changing rapidly, workers need to know more, even as their skills-support systems weaken. There is no instant cure for today’s job mismatch, but it might ease if America’s largest companies were a little bolder. Surely many of them — enjoying strong profits — could make a small gamble that, by providing more training for workers, they might actually do themselves and the country some good.Yet, like every good "The Free Market Will Solve all ills" fiscal conservative, he fails to take in two important truths. First, private companies have NO responsibility to do the country any good, especially if it conflicts with their fiduciary responsibility to turn a profit for their owners. Quite the contrary, as we saw in the 2000's, companies need and want to maximize profits in the short term no matter the long-term sector damage. That way, the bosses can justify their big bonuses, which Ezra Klein points out are derived from part of our normal human psychology:
Study after study shows that people would prefer a medium-sized house in a neighborhood of small houses to a big house in a neighborhood of much bigger houses. What people really want isn't to have a big house, in other words, but to have a bigger house than their peers. Economists call products driven by this sort of status competition "positional goods." The less-technical term for this sort of behavior is "keeping up with the Joneses," and we all do it.
When you're talking about changes in CEO pay, you're not talking about changes in the money CEOs use to make ends meet. You're talking about changes in a compensation package that has long since become totally abstract. Making $50 million is nicer than making $40 million, but the things it's buying, and the things it's saying about you, are, at that point, positional: it's a display of worth, not the way you put food on the table. People sometimes ask what CEOs need with all this money. The answer is they don't need it. But they need to not be making less money than other CEOs. If they are making less, then what does that say about them?
Thus, nothing in these companies structure or economic function drives them to make the nation better by improving employment through training, hiring or anything else.
The second point Mr. Samuelson misses is that one key function of government is to overcome this mismatch between what a business needs to do to profit, and what society needs businesses to do to keep the economy flowing. One of the reason we have massive systems of public education (from pre-K to Graduate School through community colleges) is to train a workforce that can evolve to the needs of the changing economy. One of the reasons we have the Small Business Administration, and environmental regulations, and laws requiring the protection of jobs for military reservists is that history has shown that if companies are left truly unregulated, they will do things that physically harm their workers and our environment, and financially harm just about everyone, all in the name of profits.
So while I agree that it would be nice if those companies were a "little bit bolder." But they won't be, and nothing in our economy right now incentivizes them to be. And against that backdrop many conservatives, Mr. Samuelson included, want to continue to cut and eliminate those government functions that could actually remedy this situation.
This editorial in the Wall Street Journal emphasizes my point - Boeing wants to move plants, presumably to save costs. But as the writer notes, it sends a signal that the kind of complicated machining and engineering needed to keep our aviation industry ahead of the pack is not highly economically valued.
Most depressing of all, Boeing's move would send a market signal to those considering a career in engineering or high-skilled manufacturing. It is a message that corporate America has delivered over and over: Don't go to engineering school, don't bother with fancy apprenticeships, don't invest in skills. No rational person wants to take on college or even community college debt to come out and work on the Dreamliner —which should be the country's finest product—for a miserable $14 an hour. If a single story in the news can sum up the reasons for America's global decline, it's the decision to build a Dreamliner that will gut the American dream.
As long as American companies are willing to undercut their own workforces in pursuit of ever greater profits, Mr. Samuelson's ideal will never be considered, much less fulfilled.
Friday, June 17, 2011
His latest column for the New York Times takes the former squarely on, noting that the housing collapse that brought on the Great Recession was partially the fault of one DC outfit doing business the normal way:
Morgenson and Rosner write with barely suppressed rage, as if great crimes are being committed. But there are no crimes. This is how Washington works. Only two of the characters in this tale come off as egregiously immoral. Johnson made $100 million while supposedly helping the poor. Representative Barney Frank, whose partner at the time worked for Fannie, was arrogantly dismissive when anybody raised doubts about the stability of the whole arrangement.So just like we're not looking back on Torture, we won't prosecute this behavior - the lead up to the Great Recession was and still is the norm in our nation's capitol.
But the most devastating scandal in recent history involved dozens of the most respected members of the Washington establishment. Their behavior was not out of the ordinary by any means.
For that reason, the Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington.
And that is perhaps the greatest tragedy of the Great Recession, apart from the job losses, the foreclosures, and the national decline. Across party lines, over more then a decade, the "Leaders" in Washington decided it was acceptable to have this go on. and thus wa sthe GReat Recession born.
Friday, June 10, 2011
The Republicans swept November’s midterm election by making it highly ideological, a referendum on two years of hyper-liberalism — of arrogant, overreaching, intrusive government drowning in debt and running deficits of $1.5 trillion annually. It’s not complicated. To govern left in a center-right country where four out of five citizens are non-liberal is a prescription for electoral defeat.Just two problems - first, the Republicans can't lead anything - witness Newt Gingrich's campaign implosion, and Mitt Romney's "I really do believe the science of climate change but I'm going to run against everything else I ever did as Governor just because my record might anger the base." Second, all the Republicans are running on is the thin air of messaging as opposed to innovative ideas that will do anything for the country.
Start with Obama’s abysmal stewardship, root it in his out-of-touch social-democratic ideology, and win. That would create the strongest mandate for conservative governance since the Reagan era.
Relaxed regulatory climate that's good for business -tried that under the last Republican President and it left us with the worst Recession since the Great Depression. Lower marginal tax rates and get more economic growth - tried that under Reagan, and it took 8 years of Bill Clinton to change that course of the ship back to prosperity and surplus. Let private insurers run the healthcare system without government intervention or price control through negotiations? Tried that under Medicare's Drug benefit, also a Republican idea, and that single change led to the biggest jump in the national debt and deficit in my lifetime.
So sorry, Charlie, but your party is not offering me anything I want, need or can use. Its not offering the American People anything new, or worth retrying. Its not offering to actually do anything, other then preserve the jobs of the people whose backsides you prefer to kiss instead of coming up with an original idea.
The saddest thing of all, however, is that the Democrats are just as bad.
Wednesday, June 8, 2011
Barrasso gave fellow Republicans a one-pager at their policy lunch Tuesday — with the heading "Mismatched: John Bryson & the Commerce Department" — citing his founding of the "extreme environmental organization" the Natural Resources Defense Council and his support of the cap-and-trade bill House Democrats passed in 2009.
"Instead of appointing a truly an economic leader, he has appointed an environmental extremist," Barrasso told reporters after the lunch.
Apparently Mr. Bryson's current stint as chairman of the board of BrightSource Energy, former as well as his former employment as president of the California Public Utilities Commission and as the former chairman, president and CEO of Edison International don 't qualify him as a businessman. In addition, with the National Oceanic and Atmospheric Administration (NOAA) making up approximately 65% of the Department of Commerce's budget in years we don't take the Census, having someone with environmental familiarity wouldn't be a bad idea either.
Of course, there's little love lost between NOAA and Republicans on the Hill these days, since NOAA administers the Endangered Species Act in marine waters of the U.S. Exclusive Economic Zone, and many Republican politicians want to ditch the ESA.
Still, you have to wonder why a politician wants to ditch someone whose actually qualified to lead both parts of the organization. Actually you don't - this is all about sticking it to President Obama.
H/t Ezra Klein at Wonkbook
Tuesday, June 7, 2011
And here’s the shocker: Our government spends more on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada or Switzerland.Sadly, since both Parties are so invested in their own positions, and more concerned with poking each other to death then real public service, I do not see this trend changing, no matter what "The President proposes and Congress disposes."
Think about that for a minute. Canada has a single-payer health-care system. The government is the only insurer of any note. The United Kingdom has a socialized system, in which the government is not only the sole insurer of note but also employs most of the doctors and nurses and runs most of the hospitals. And yet, measured as a share of the economy, our government health-care system is the largest of the bunch.
And it’s worse than that: Atop our giant government health-care sector, we have an even more giant private health-care sector. Altogether, we’re spending about 16 percent of the GDP on health care. No other country even tops 12 percent. Which means we’ve got the worst of both worlds: huge government and high costs.
Monday, June 6, 2011
Wednesday, June 1, 2011
Want to be the best cook you can be? Following Mindy's recipes is a great way to start!
The right of photographers to take pictures in public places has been a point of contention virtually since the invention of the camera. But the disputes have become more frequent — and more contentious — since the terrorist attacks of Sept. 11, 2001, which prompted police to challenge individuals who take photos or video of public infrastructure as potential security risks.As it turns out, not only were the cops trying to detain the man for violating MTA policy (as opposed to breaking an actual law), but the MTA is not sure its policy is Constitutional:
Civil libertarians and rights advocates say police have been given no new powers to curb photography since 9/11. In many cases, they say, police are making up laws and rules on the spot and issuing orders they have no right to give.
John Wesley, a spokesman for the MTA, said the agency would have no immediate reply to the allegations in the ACLU letter.So, the ACLU, which is about to sue the MTA over this and other incidents, basically has an MTA official on record saying the officers, sworn to uphold the law, may well be violating the Constitution by seeking to enforce a policy that has no weight of law behind it. In addition, the MTA wants anyone who might ever take a picture in one of its stations to get permission first?
Wesley said MTA policy, as spelled out in its media guide, asks members of the public to seek permission before filming.
"If you film, photograph or interview customers on MTA property or film any MTA property or stations, please make your request through the Office of Communication and Marketing," the policy reads.
"It doesn't say what the consequences are if you don't," Wesley said. Asked whether the policy would pass legal muster, he said "I'm not sure whether or not it's constitutional."
Leaving aside the enormous logistical issue of insisting every person who ever snaps a photo in an MTA station to ask beforehand (there go all those spontaneous Friday night going to a party photos and vacation pictures), how does MTA reasonably expect that it, a public agency, funded by taxes, has the right to limit what taxpaying citizens and visitors can do in public spaces?
Its stuff like this that makes my blood boil. As a citizen, you used to have a basic right to take pictures of public facilities, public spaces, and public transit without anyone batting an eye. Now you are presumed to be a terrorist. That, dear readers, is as clear an erosion of civil liberties as I can think of.