McCain's Visit to Lima Ohio Today, and the Political Economy of America
After a town hall today in Lima, Ohio, John McCain is scheduled to meet with city officials about the clos ing of a DHL shipping site in nearby Wilmington, Ohio, which will put about 8,000 people out of work. These sorts closings are often terrible for small cities because when a major employer uproots an entire local economy can be endangered. For every job lost to a big company, two or three additional ones are likely to be imperiled in the local service sector -- retail, hotel, and restaurant employees, for example.
So why is DHL closing its shipping site? The answer tells us a lot about how our economy works, why global financial capital has taken prominence over American jobs and the places where Americans work and live, and also about the ways of Washington. It even tells us something about the McCain campaign.
You see, the shipping site that DHL is closing used to be owned by Airborne Express, an American company with roots in Ohio. But several years ago German-owned DHL decided to buy Airborne Express. Obviously, DHL has no particular connection with Wilmington or with Ohio or even with the United States. So it's no surprise that, a few years after the sale, DHL turned to United Parcel Service to move some of its packages, presumably at a slightly cheaper rate. UPS will send the packages through an airport in Louisville, Kentucky. That means DHL won't need its shipping site in Wilmington, Ohio.
Economists have a cold-blooded term called "social costs" to describe the effects on society of what might be otherwise a perfectly efficient transaction from the standpoint of the parties directly involved, such as DHL's decision to use UPS and close down its Wilmington, Ohio shipping site. Although some people may gain jobs in Lousville, Kentucky, it's likely that more jobs will be lost in Ohio (after all, DHL believes the change will save it money). In addition, lots of people in Wilmington and Lima, Ohio, will have to endure the cost and emotional pain of trying to find new jobs, perhaps even moving to another city in order to do so. Property values in Wilmington are likely to drop as a result of the job losses, making it even harder for people there to uproot themselves and move elsewhere.
Had Airborne Express remained the owner of the shipping site in Wilmington, these social costs might never have occurred. Airborne was rooted in Wilmington, Ohio. Presumably, its executives would have taken every possible step to keep it there. So here we have an instance in which global capital -- exemplified by German-owned DHL -- imposes social costs that might even be larger, in total, than any efficiency gains from moving the shipping center to Louisville.
Here's where politics comes in. Congress and the administration have certain powers to prevent foreign purchases of American airline and shipping firms, given the potential effects on American security. When German-owned DHL sought to buy Airborne Express, some members of Congress expressed concern. DHL then did what any firm, foreign or domestic, would do in these circumstances. It hired a Washington lobbying firm, to lobby Congress and get the deal approved.
Who, exactly, did the lobbying for DHL? According to the Associated Press, it was none other than McCain campaign manager Rick Davis.
So why is DHL closing its shipping site? The answer tells us a lot about how our economy works, why global financial capital has taken prominence over American jobs and the places where Americans work and live, and also about the ways of Washington. It even tells us something about the McCain campaign.
You see, the shipping site that DHL is closing used to be owned by Airborne Express, an American company with roots in Ohio. But several years ago German-owned DHL decided to buy Airborne Express. Obviously, DHL has no particular connection with Wilmington or with Ohio or even with the United States. So it's no surprise that, a few years after the sale, DHL turned to United Parcel Service to move some of its packages, presumably at a slightly cheaper rate. UPS will send the packages through an airport in Louisville, Kentucky. That means DHL won't need its shipping site in Wilmington, Ohio.
Economists have a cold-blooded term called "social costs" to describe the effects on society of what might be otherwise a perfectly efficient transaction from the standpoint of the parties directly involved, such as DHL's decision to use UPS and close down its Wilmington, Ohio shipping site. Although some people may gain jobs in Lousville, Kentucky, it's likely that more jobs will be lost in Ohio (after all, DHL believes the change will save it money). In addition, lots of people in Wilmington and Lima, Ohio, will have to endure the cost and emotional pain of trying to find new jobs, perhaps even moving to another city in order to do so. Property values in Wilmington are likely to drop as a result of the job losses, making it even harder for people there to uproot themselves and move elsewhere.
Had Airborne Express remained the owner of the shipping site in Wilmington, these social costs might never have occurred. Airborne was rooted in Wilmington, Ohio. Presumably, its executives would have taken every possible step to keep it there. So here we have an instance in which global capital -- exemplified by German-owned DHL -- imposes social costs that might even be larger, in total, than any efficiency gains from moving the shipping center to Louisville.
Here's where politics comes in. Congress and the administration have certain powers to prevent foreign purchases of American airline and shipping firms, given the potential effects on American security. When German-owned DHL sought to buy Airborne Express, some members of Congress expressed concern. DHL then did what any firm, foreign or domestic, would do in these circumstances. It hired a Washington lobbying firm, to lobby Congress and get the deal approved.
Who, exactly, did the lobbying for DHL? According to the Associated Press, it was none other than McCain campaign manager Rick Davis.
posted by Robert Reich | 11:49 AM
134 Comments:
Another example of why we need lobby reform. The lobby system and the electorial college are controlling democracy and skewing our culture towards ultra-capitalism at the cost of American society and values.
Most Americans don't get their vote counted and don't get the society they want. WE NEED CHANGE.
We don't need another shrub (McBush) in the White House.
Republicans are skewed towards corporate greed.
The Bush oil machine has killed too many people that were not connected in any way to terroism.
Bush has killed and wounded more Americans then the World Trade Center attack.
He is fighting the wrong war, with the worng people, for the wroong cause, using Republican, neo-conservative scare tactics. He is the Hitler of our times.
Dr. Reich,
There's nothing new about how the lobby system buys our politicians and completely breaks a healthy balance between societal interests and business interests. It's not new that for +25 years now we have done little about this systemic `me first´ cancer in our culture. It's not new that we are tragically a backward nation in social protections, worker retraining, unemployment compensation, health care, etc. for those who are the victims of the socalled "dynamic destruction" of capitalism -- the idea you have to destroy to rebuild and everybody must adjust to find his or her way under this reality. It's not new that the ruling ideal of the market economy is "survival of the fittest" where the weak must learn to fend for themselves. It's not new that we've forgotten the truly moral standards for governing our political economy and corporate behavior are concern for
first Employees,
Customers,
and then Shareholders ---
instead of the perverted other way around.
It's also not new that we continue to do nothing about these greedy, inhumanly, destructive values long poisoning and polarizing our culture into the Haves and the Have Nots, the Deadbeats and the Upbeats, the Insiders and the Outsiders, the Wal-Mart hourly masses and the Hedge Fund bonus elites, the Worker Force Outsourced and the MBAs Insourced, the Top 10% with 4 properties and all The Rest trying to hold onto 1 property, their home!
Welcome to the land of Opportunity!
---for some.
One view is that it's just competition: FedEx, DHL, UPS, Airborne are in the same market. When IBM sold off the Lexington, Ky, plants to LexMark, eventually Kentucy governor Martha Layne Collins wooed Toyota to build their plant in Georgetown, Ky and that became the new IBM. If there is not a second corporation to move into the Ohio area, then the good people have to find the nearest college and get into health care careers, practically the only jobs that will be left in the US.
Your book states Washington, DC, is awash with special interest groups and lobbying so that the voice of the middle class will never be heard. And you state it's because of the fierce competition between businesses. See paragraph one.
Ban lobbying seems to be one answer. Let businesses compete head-to-head with each other. No artificial mercenaries or gladiators.
Good posts from anonymous #1 and #2. I read on some blog the statement the Republicans have not raised taxes, thus, their goal is achieved. The Financial Times, Clive Crook and a scathing view of the US under Bush.
http://www.ft.com/cms/s/0/08667a1a-6176-11dd-af94-000077b07658.html
Even so, further aggressive fiscal easing at the federal level would be risky. If the budget outlook starts to scare the markets and interrupt the flow of foreign capital to the US, the dollar might fall abruptly – worsening the inflation risk and forcing the Fed’s hand on interest rates. The point at which fiscal easing becomes self-cancelling may not be far away.
It is worth remembering where the blame for this neutering of fiscal policy lies: squarely with the Bush administration. At the start of this decade, the budget stood in surplus to the tune of 2.4 per cent of GDP. On unchanged policy, this was expected to grow to a surplus of 4.5 per cent of GDP by 2008. This year’s actual deficit of 3 per cent of GDP therefore represents a worsening of more than 7 per cent of GDP, or roughly $1,000bn. Almost all of this deterioration is due to policy: to tax cuts, spending increases, and their associated debt-service costs.
That projected surplus was a priceless gift to the White House. It offered the Bush administration ample scope for outlays on homeland security and other unforeseen priorities, and moderate tax cuts as well, all within a budget balanced over the course of the business cycle. Instead, the administration knowingly opted for outrageous fiscal excess – adding insult to injury with its phoney tax-cut sunset provisions, designed for no other purpose than to disguise the long-term fiscal implications. Eight years on, this startling record of fiscal irresponsibility has all but taken fiscal policy off the table as an available response to the slowdown.
The US economy had better have luck on its side. Luck is about all it has left.
Add in Frank Donatelli and Charlie Black to Rick Davis, all significant Bush advisors, and you get a nice campaign ad that can highlight their collective sinister lobbying activities. lol
Well, that figures!
Interesting analysis.
Reminds me of when grain went up here because of an El Nino that drove sardines off the coast of Portugal. Apparently sardines, as well as grain, are fed to live stock. It both made and broke futures traders.
It's such a convoluted world.
tt
The local Idiot Scale has to be considered in context for Ohio. Ohio voted for Bush. Then it was interesting for me to see several months ago that Ohio led the US in bankruptcies. So they couldn't see that coming. Ohio as a red state swallowed hook, line, and sinker ever phoneme from Roger Ailes, Fox CEO, Rush Limbaugh, the Swift Boat Veterans for Bush in addition to being home to Diebold and whatever lunacy they perpetrated. That's one measure on the Idiot Scale.
I'll provide Kentucky's, Idiot Scale. Didn't Bush and Mitch McConnell carry Kentucky? I think they did. Thirty years ago, I had a group of friends; we graduated from university/graduate school at the same time. There was always a given that in Kentucky, a woman did not go into banking. The good ol' boys network was too embedded. Out of our group of friends two people went into banking. The male only had a 2 year degree in agriculture. He was hired immediately into a middle management position and was a bank vice president within 3-5 years. Granted, he was all-American: strawberry blond hair, blue eyes, great good ol' boy personality. Another friend, a woman, was an honor student and earned an MBA from the University of Kentucky. The bank hired her as a teller (swear on a stack of Bibles) so she could "work her way up." One of her early tasks was to count soaked money rescued from a fire at a gasoline station. As soon as she could, she looked around for another position and thankfully was hired by Toyota to lead a car painting team on second shift (went to Japan to train, came back, worked, and has recently taken early retirement to secure her pension).
Just one example to say you have to know much more about Ohio before you can really decide how to react to DHL relocating to Loiusville.
To: Robert Reich:
According to The Shock Doctrine: The rise of Disaster Capitalism Naomi Klein, 2007? 2008? The American Congress has swallowed Freidman economics and anything goes. The American people now must compete with the Chinese worker. If they can't compete with .40 cents an hour, tough.
There is a flip side to this according to her. Economic Disaster is the real target. When cities and people become so poor that they can not afford to survive, they go into bankruptcy or sell off all of their assets to the highest bidder, Wall Street. As a consequence, cities will sell their rights to Public properties, to public Roads, public everything. In Pensylvania, for example, the governor is trying to sell the Pennsylvania Turnpike. Other cities are selling their school systems, their water works, their prisons etc. Everything is up for sale these days.
The Friedman doctrine allows for disasters and encourages them. This is the role that Wall Street has played. They own everyone in Congress and they all have to play their game or they are out.
The other Day, Obama went to Israel to pledge his undying love for the Jews. He is reported to have wall street in his back pocket. His utterances have proven that he will do no different than what George Bush did. It's Lima today. Philadelphia tomorrow. No city is safe. No job is safe.
The whooshing sound that Perot spoke about is louder and louder. The situations is only being agravated by immigration and open door policies. A dark cloud is settling over America and everything is up for grabs. McCain, Obama...it does not matter. We need people like Ralph Nader or Al Franken to change things. Support them if you can but our leaders are incapable of helping. They are all compromised.
Kay abc
the Republicans have not raised taxes, thus, their goal is achieved.
The american people have paid for a war in Iraq and Afghanistan and secret wars all over the world. In addition, the american people paid for Baird Stern Bail out, oil hikes, Fanny Mae and Fredie Mack Bailouts, and all the money that has disappeared. And in this great democracy of our, none of us had a say in any of it.
One grandstander in congress asked Fed Chairman "Whose gonna pay for it all?" He demanded an answer. The guy turned around and said "We don't have the money!" "Well," he said, and vigorously demanded an answer, "Whose gonna pay for it?[Fannie May and Freddie Mac]"
In a low voice he said "the American people" [the taxpayer}
If that is not a tax via the back door, I don't know what it is.
You have to understand that the Government and Wall street hates you. They want you dirt poor and barefoot.
Wilmington near Lima?
It's about a 2 hour drive.
Dear whatshisface,
I haven’t read Naomi Klein’s book, so I can’t make specific comments about it. Yet I should note that if her book is anything like the interview/speech I heard from her, then my review would be similar to that of Joseph Stiglitz, who said that parts of the book were ‘overdramatic and unconvincing’.
Which is exactly how I would characterize some of your statements:
“Economic disaster is the real target” – it’s ok to disagree with Friedman’s strand of libertarianism, but to state the aforementioned, as if the proponents INTEND havoc, is nuts.
“This is the role that Wall Street has played. They own everyone in Congress and they all have to play their game or they are out” – I don’t doubt the massive influence that Wall Street, and the business world in general, have on the US government. Lobbyists have WAY too much power, and the original blog entry by Professor Reich is a great example. But to say that ‘they own everyone’ is again, way too ‘overdramatic’.
“His [Obama] utterances have proven that he will do no different than what George Bush did” – If you think that Obama’s policies will be no different than Mr. Bush’s, you either haven’t done your homework… or if you have, my friend, then you are on crack.
“You have to understand that the Government and Wall street hates you” – It would be ignorant to say that the government didn’t have representatives that lose sight of where their number one allegiance ought to be. But many people in government, believe it or not, are there to try and make a positive difference, and don’t lose sight of the big picture. And the same can be said of business people on wall street, many of whom work hard, and don’t harbor the malicious intentions you speak of. Yes, they love money, but aren’t necessarily willing to rob people for it.
If you want to really educate yourself on these issues, I’d suggest reading books by serious authors. Reich’s Supercapitalism was an excellent interpretation of where-we-are-how-we-got-to-this. If you like critics of 'neoliberalism', read Stiglitz. And I would suggest reading Friedman too; you may disagree, but he was much more brilliant than the author of the book you seem to be taken up with. Yes, he was DEAD WRONG on some things (too long to get into), but we must remember that his underlying intention was the complete freedom of the individual.
Lastly, and if I could scream this in your ear I would: “there’s no bloody conspiracy going on!”
aly k
aly K:
Naomi Klein has actually tried to posit a model of the new capitalism that has been practiced...disaster capitalism. She feels that Friedman's capitalism is insane but predatory. She argues that the new capitalism is based on waiting for or encouraging disaster so as to
effect change that benefits capitalist fat cats. I believe what she says and I have followed her arguements. I see the writing on the her wall. As an example, she explained the technique of getting congress juiced up to pass the new oil laws that have been in limbo for over 30 years. Suddenly, there is a lot of focus on new forms of energy that would benefit the big players but would definitely not benefit America. The game on wall street and speculation on the barrel has caused a disaster in America and in the world economy. Naomi argues that this is not accidental but planned in order to get congress to sell millions of leases for nothing to those capitalist waiting to take advantage. All of this may have been accidental, but she (and I) don't believe it. She also presented a similar argument in the two sunamis that hit Burma and India. Both appear to have been Acts of God but there are others who believe they were triggered by underwater explosions. Whatever the case may have been, there were opportunities created by those disasters that caused certain Banks and capitalists to profit by it. As for Burma, they would have nothing to do with The US. However, the disaster posed by Katrina was a windfall for policy and for the Right wing Republicans. I can not go into what George Bush got out of it but he appears to have orchestrated the disaster along with his "boy Brownie" and I believe he had a hand in it. Notwithstanding, I also believe he had a hand in the WTC bombing. Label me as a nut, but that is what I believe. I don't believe George has our best interest at hand and most of all, I don't believe anything he would say .
Like I said before, I am not an economist and don't want to be. I have Friedman's books and I understand vaguely his line of capitalism even if he talks in riddles. I don't like anything about him and I think he was absolutely evil. I won't go along with your assessment of him because I am basically a communist. I like capitalism but only unless its controlled like you would fission.
“This is the role that Wall Street has played. They own everyone in Congress and they all have to play their game or they are out” " This is not my arguement but comes from the mouth of Ernest "Fritz" Hollings, former senator of S.C.He says that Wall Street runs Congress. See his book, Making America work
“You have to understand that the Government and Wall street hates you” As regards my argument about American capitalism, I also have one about George Bush and the government that stood by him for 8 years as well as those since Nixon. I should have said who needs terrorists when you have them? More specifically, George Bush and our government not only have destroyed the Checks and Balances that made America a fairly stable social government, but they also destroyed our constitution. They one and all ignored the rule of law beginning with the laws of War which is crime if you do not know. How can anyone, even you, not know that we have been sent to the slaughtering house and there is nothing that can be done about it. The system you once knew is dust. It no longer exists. What you thought was America has been taken away using a magic trick.
whatshisface:
While this pains me deeply, aly k is right. Do you have any idea of the complexity that would be involved in the grand conspiracy theory you lay out?
No doubt most all are out there seeking monetary gain but that doesn't support some clandestine, organized, interrelated grand plan. There are not enough emails or file tranfers in the world to pull off the scenario you posit.
You would be correct to suggest, "Follow the Money", but it would lead down a variety of paths and few of them would be interconnected.
This is worryingly anecdotal and pro-protectionism. As you know better than almost anyone, to run an economy, you have to go with the best overall model that benefits the most people the most. I believe, and I think that most economists would agree, that that is free trade.
There are shades of gray and governments should place parameters around free markets to limit excesses and abuses, but protectionism as a core principle will make (and is making) the whole world poorer.
Professor Reich, the Obama campaign will likely look to you and your protegees for guidance on the economy should they win the election. It is vital for so many people's lives (in the USA and abroad) that your guidance is clear and correct in these areas. IMHO, there is too much subjective language in this post from someone that needs to be (and is) the knowledgeable voice of reason in an era that is too prone to hyperbole and to extracting a single situation to make a point that is not supported by the overall weight of data.
I fully agree with Jonathan. Protectionism is the most inefficient way to go, yielding short term gains and long term losses. There are scores of other examples that show the benefits a region accrued when a new industry or business moves to town. Moreover, I do not think that there has ever been a single presidential candidate who is squeaky clean. Or does not have the “people owe me” mentality. (See the multimillionaire Hillary getting angry because the voters do not pay off her debt. I would think basic dignity could suggest a painless trip to her bank.)
Back to the topic. I have seen protectionism at its worst in Greece where the country is drwning into a choking debt because it chose to protect Olympic Airways, the public railways system, the public bus system, the thousands of useless public employees who sit around passing paperwork (literally), and thousands of private businesses going bankrupt by “encouraging” public banks give them loans that might not ever be paid back. The mentality that grows out of this is that the state has an obligation to keep you at work. I don't have to explain the perils of that. (Friends in Europe were mystified when Enron collapsed and the government did not compensate the employees).
The second more dangerous side effect (seen very strongly also in France) is that the state eventually hampers free market forces with its intervention (see this Herald Tribube article. Accordingly, many entrepreneurs simply choose not to open shop. A brain drain of serious dimensions has occurred and Sarkozy won the elections advocating less control of the market. But the mentality of the "state-protector" is strong in many European countries and partially is to blame for their horrendous social security deficits. (At the same time it is the extent of the free market that the EU adopted that ensured peace and the kind of prosperity one sees. But it is a free market under a far stricter centralized control and this is why innovating entrepreneurs want to leave.)
That does not mean I am insensitive towards those who are going to get hurt. However, the world is flat, we all know it, and young people have a responsibility to equip themselves with diverse skills and knowledge. And this is why I fail to understand why so many young people in the western world, although they know darn well the demands of globalization, choose to flip burgers instead of working their butts off at school.
Re: Offshore Drilling
Offshore drilling should be considered if nationalized or organized as a non-profit enterprise. Proceeds should go to the poor; food, medicine, clothing and housing. And if advocates are correct, the middle-class will benefit with lower costs for oil, gasoline and diesel.
I sit amazed at this post of Prof Reich. Let's see if I can get this is one sentence...because of lobbying (and somehow involving McCain) a company was allowed to be sold, that should have been government protected (why isn't honestly explained) because the foreign owner made a business decision to allocate capital more efficiently and close down the center. So what you're saying, with all due respect, is that the government should step in to prevent this? That this isn't a free market after all, but simply because this buyer was not US-based, the sale should have been prevented? What makes you think that if another US-based company acquired this it wouldn't have made the same determination?
Frankly the reasoning exhibited here scares me to death. You are certainly capable of better analysis than this, and I expect better. I also expect that the discussion about this would be in economic and use of capital terms, as plant closings have an emotion aspect that is far too easy to play to. And play it you did at the expense of the rational discussion.
Jobs started leaving Ohio in droves during the Clinton administration, so let's keep that in perspective.
Which is not to defend Bush.
(Kerry would be probably be president if his east cost yuppie staffers had understood unions.)
Lima is nowhere near Wilmington. Lima has been more blue collar and has lost more jobs, but some of that goes way back to its days as a locomotive center.
Lima did receive a contract this week to rebuild wrecked M1A1 tanks. Mixed blessing i guess.
Amen, Mark.
Dr. Reich is playing to American xenophobia, when it is quite possible that a U.S. based company could have made the same purchase and center closing decision.
We've seen this before during periods of time when non-U.S. economies and currencies were outperforming. The hysteria of it all is mind numbing for its small mindedness.
"The Japanese just purchased Rockefeller Center. They own Hawaii. It's like they're taking over our country," they said.
There was never a rational argument made for why this is a bad thing, except for some vague notion about national security or the breathless, but unsubstantiated accusation that our country would become subserviant to its foreign owners. This is, at best, xenophobia and, at worst, something more akin to racism.
Besides, this happens in both directions. Speaking personally, my company recently purchased a competitor and, as part of the integration effort, closed down some operations in Canada and China. Some of those positions ended up being reconstituted in facilities we have in Massachusetts, Ohio and Kentucky. I guess we're all OK with that one, though.
We may all disagree on policy and I think it is excellent to have that debate in an open and free way, but this kind of stuff is unseemly and offensive.
Anonymous matt
Mark said...
"I sit amazed at this post of Prof Reich. Let's see if I can get this is one sentence...because of lobbying (and somehow involving McCain) a company was allowed to be sold, that should have been government protected (why isn't honestly explained) because the foreign owner made a business decision to allocate capital more efficiently and close down the center."
Implicit in the essay is the notion that companies not rooted in the community may be more prone to make business decisions that have undesirable social consequences. He tossed in some politics…we do have an important election coming up after all…but the underlying point is meant to be instructive, i.e., that corporate behavior has consequential social implications and that policy should be developed with this in mind. Nothing more should be inferred from his thesis.
Matt:
...but this kind of stuff is unseemly and offensive.
What the hell kind of language is that for an executive, especially an accounting one?
You sound more like a frustrated parent castigating a child.
What happened to, "financially absurd" and "an affront to free enterprise"?
Art:
You are forgetting my age. I AM a frustrated parent...and the mouthiness of my kids...well.
As for the affront to free enterprise, I thought that was self evident in the original post.
AM
Matt
Just to add on the "hysteria" part of your argument.
You remeber what was the reaction when there was an effort in 2006 to have a United Arab Emirates-based company run some American seaports?
All hell had broken loose... I am not going to remind you of the arguments ... from legislators of both parties.
I copy part of the arguments from a CNN report:
"Critics say the takeover raises security concerns, noting that two of the hijackers in the September 11, 2001, attacks on New York and Washington came from the UAE and that the hijackers drew funds from bank accounts in Dubai, the financial center of the Persian Gulf."
As if Mohhamed Atta did not have an account here in the US. Or, even worse, as if a brillian employee of INS did not renew his visa by mistake after his death... (we are talking about gross incompetence!)
Now, what escaped everyone, was that this particular company had a comparative advantage in running seaports due to experience.
While the US media, legislators from both parties, and public had ZERO problem when the sea ports were run by a British-based company. A country that has hosted and nurtured a good number of terrorists. Home-grown stuff.
Why was a Middle-Eastern company held to a different standard?
I just could not believe the myopia...
Brad DeLong has a link to the Ohio Democratic ad tying McCain to the closing of this plant. Brutal stuff.
DHL incidentally started as a US company in 1969 and opened an Asian affiliate in 1972. One of the earliest IRS wins over transfer pricing where section 6662 penalties were involved involved the transfer of intangible assets to DHL Asia for an amount far below fair market value.
notsofast:
Right on!
I'm not big on foreign ownership of American companies but except for national security purposes, an issue that Dr. Reich did bring up, there seems to be little to be done about it.
I guess the first thing that all the astounded posters here should do is define the ultimate goal. Jonathon makes a stab: As you know better than almost anyone, to run an economy, you have to go with the best overall model that benefits the most people the most.
A typical Millian approach to economic Valhalla. First problem is that free markets, especially in a time of free worldwide trade, do not necessarily benefit the "most". Generally it is the "few" who benefit. I guess one can argue that making $.40/hour is a windfall if you were used to scrounging for food with no income but that seems scant praise for free trade or free markets.
To some extent the issue gets back to the age old economic argument regarding the purpose of production. Does production exist to provide jobs or to produce goods to be sold, serving a market need. Simplistically the answer is obvious. But what happens if goods are not produced? The people adjust and get by, albeit with perhaps less convenience. What happens if no one buys the goods? The people get by and the production company goes belly up.
To your point: Forgetting about communities that spring up around large employers, when a new employer sets up in a community, all kinds of infrastructure spending commences. In today's world, communities promise improved infrastructure to lure new business but even years ago, new, especially large employers, set in motion a need for better roads, for extensions of water, sewer, electrical utilities. Employees of the new comany often moved into the area which meant new housing, increased police and fire services, more administration. Feeder businesses pop up adding population and more infrastructure needs.
Although hectic, all is well and works out fine until a change in location is on the table. Then all hell breaks loose, especially, often the case, if that large employer is the only one in the area. All of the sudden the entire local economy is at risk. Even day to day living experiences undergo drastic change. Huge unemployment with no local alternatives creates additional pressure. To Dr. Reich's point, folks have to start looking to move to where jobs are. This impacts all real estate values, seldom favorably. It can be devastating for those remaining.
What to do? Disallowing a shutdown or a move is undemocratic and silly. Companies would just bleed the operation until there was no other choice. The answer might lie in establishing formulas for calculating the social costs over a ten year, or more, period and the company would have to reimburse the locality for those social costs. That would not even be uncapitalistic. If a company cancels a lease they must negotiate a payout; same principal. It is not uncommon for companies to have to post surety bonds and if required at the outset, with annual adjustments, this could protect the town from shenanigans by the company.
Since most all business decisions are cost/benefit related and, of course, benefit is a polite term for profit, the reimbursement of social costs would now have to be considered in the cost side of the equation, frequently negating plans.
We bean counters would be happy to open up that additional frontier for our profession, although in fact it would be more actuarial in nature and that's not a normal bean counting function. We are, however, if nothing else, creative and teachable.
Now we'll get a bunch of howling about this proposal but again, define for me the ultimate goal. Unbridled freedom for more and more profits without responsibility? Or the general welfare of a community and a people that most companies would have been nurturing for years?
Matt:
Primarily the only self evident things in life are; ...that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness...
All other things are assumed.
Art:
Thanks to Schoolhouse Rock (yes, those of us in our late 30s had this when we were children), I can say...We the people, in order to form a more perfect union, establish justice and ensure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity, do ordain and esstablish this Constitution of the United States of America.
AM
The “logic” Mr. Reich employs in this post would suggest that we would have been better off to stick with an agrarian economy driven by one blade plows pulled by a single horse (except that this level of productivity improvement also stole jobs).
ALL productivity improvements involve economic disruption and/or dislocation.
DEAL WITH IT!
In this case, everybody who ships or receives anything via DHL or any of their competitors BENEFITS from the deal through lower costs to ship and receive. Those who receive LASTING benefit from the deal FAR outnumber those who suffer the TEMPORARY economic disruption and/or dislocation.
Notsofast,
Your comment: "Offshore drilling should be considered if nationalized or organized as a non-profit enterprise.
Any drilling offshore within US territorial waters is automatically the Property of the US (i.e., US Taxpayers). Drilling and subsequent finds in offshore waters beyond US territorial waters is a whole other legal morass.
Point is that in either case, but without question in the first place, the US -- after offshore drilling exploration confirms a commercial find -- must have the right to substitute lease contract for a 50% Ownership position in the venture with its investment being the oil-gas site Land Contribution. The oil firm is the other 50% Partner with its Contribution being all the Investment and Operational capital required to explore and develop the commercial find.
An alternative structure is that any initial lease contract upon a successful exploration find will be substituted into a ROYALTY FEE arrangement that reflects the INHERENT COMMERCIAL VALUE of the oil or gas discovery.
NORWAY and other nations have pursued either of these quite normal business courses with oil firms. Therefore, our government should be equally intelligent in striking a 50% Partnership or appropriate Royalty Fee arrangement for offshore drilling finds.
How the funds generated from a US Ownership or Royalty Fee arrangement are used for our society is a whole other matter. The options are many, a few of which you allude to. The funds could also go to Infrastructure Investments, Stimulation of Alternate Fuels, Education ...if my idea of selling "Invest In US Education Bonds" to general public has no traction.
All other conditions I mentioned (in Dr. Reich´s prior essay) for oil firms to qualify for more immediate exploration drilling of a specifically highly promising offshore acreage site or sites are extremely IMPORTANT.
Athena:
I have lived through a period when one might posit that "protectionism" was at its best. The America of the 40s through the 70s. It was far from perfect, greed was rampant but tempered. There was a general sense of equity and fairness. It was not all altruistic. Labor unions played a big roll in keeping exectuive salaries from drifting too far afield from average worker wages. For the most part a reasonable and fair disparity was at play. Unions also secured safer working conditions and multiple benefits for their members, which seeped into the general nonunion workplace as well. Businesses flourished, entrepreneurs innovated all over the place. We truly were close to a system that benefitted the general welfare.
We even had a government bailout of a huge private company (Chrysler) which worked out very favorably.
It often is not the concept that is bad but the execution.
It wasn't until Reagan unleashed the idea of "trickle down" that everything started downhill. Greed became good because excess wealth was going to "trickle" back down to the masses in the form of more and better paying jobs. It was to be heaven on earth. It turned out to be an out of this world phenomena but at the other end of the spectrum.
The last thirty years of US economic history has substantiated that laissez-faire capitalism is not only not the answer it may be the worst answer.
This country was founded on the idea of creating a system that benefitted all the people not all the businesses or entrepreneurs.
sbvor:
Your understanding of economics is baffling.
Now on the oil question you wail and cry about supply and demand being the sole predicator of prices. Why would that be different in the air freight business.
DHL and Airborne, before the buyout, and many other small services offer lower prices because they offer less service and they have no market impact. Fedex and UPS can drive market pricing to some extent because of their size and control of the market. They also don't work real hard at grabbing market share, each being relatively happy with their individual share.
I can tell you from experience that when a company's finances get tight they don't say use DHL instead of Fedex, they say stop all air freight and overnight delivery.
If you think that cost savings always end up as lower prices your knowledge of business is even less than your knowledge of most other things. DHL has no chance of seriously affecting the market shares of Fedex or UPS. Should they even make a serious attempt they would be buried. They muddle along with their share and cut costs wherever possible to increase profits not to reduce prices.
God! Take a class in basketweaving or something where your talents might have a chance to improve.
In the interest of productivity enhancement, I hereby offer The Communist Manifesto as an equivalent substitute for all of the comments (and posts) from the usual Leftists at this blog.
SERIOUSLY!
Read it and you will find the EXACT SAME ARGUMENTS!
Now, will all you Proletarians kindly get back to work doing something PRODUCTIVE!
Matt:
No doubt as masterful a proclamation as man has ever produced.
Be sure and read it carefully and tell me where any of the wonderfully stated goals of the preamble have been achieved. Back a few decades ago we were getting there but the backsliding has been occurring at breakneck speed.
Keep in mind also that the original concept was flawed, in that, slavery was considered a part of "domestic tranquility".
Aha!
sbvor has the answer. When you lack the capacity for logical, reasoned argument you can always win by calling them Communists. The fear of government knocking on the door will shut them up.
What he fails to appreciate is that in it's purest final form, Communism is a beautiful system. Alas, the final form can never be achieved, primarily because it is contrary to the nature of man. As a theory it has merit.
What he also fails to comprehend, among a whole plethora of things, is that perhaps the best, ultimate system is a recipe of different parts from different isms. That is where we are today and it is a work in progress.
A democratic process that allows unbridled capitalism is surely not utopia.
Linking McCain’s top campaign advisors with parasitic lobbying activities is a safe way to go after him but also a strategy that can be fairly easily defended. Far more devastating and one that would destroy him, is the strategy of persuading people that he has cognitive impairments which will likely diminish his judgment. Medical professionals call this “mild cognitive impairment.” It has some of the same characteristics as dementia but is far less severe. Symptomatology can be poor memory, poor attention to detail, perceptual flaws and reduced higher-order executive cortical functioning. This last one creates the most concern. The medical research is convincing that this phenomenon is widespread but we only have to look to our own empirical observations to know how extensive it is.
The trick is how to do this without getting the pc police to swarm and without alienating voters over age 60. Bringing up his frequent “gaffes” is too subtle and doesn’t really get at his presumed underlying condition. Dems need to pump some fear into the hearts of voters much like Rove and his crew did getting Bush reelected. Can’t go to a gun battle armed with a knife. lol
Frank Thomas said...
"All other conditions I mentioned (in Dr. Reich´s prior essay) for oil firms to qualify for more immediate exploration drilling of a specifically highly promising offshore acreage site or sites are extremely IMPORTANT."
While respecting your knowledge of the current status of drilling legality, I have to overwhelmingly reject your conclusion that for-profit oil firms should be involved if additional drilling is allowed. These companies have enough. Any future arrangements need to benefit those most in need. It shouldn't be that diificult to set things up with this mind.
Art sez:
“Communism is a beautiful system”
Well, I guess beauty is in the eye of the beholder.
Any others who view Communism as “a beautiful system” care to fess up?
Remember! Confession is good for the soul.
Whatshisface, Athena and others,
I seem to be agreeing with some of Art’s posts on here more than with some others; a clear sign that the world is coming to an end.
Whatshisface – I would love to comment on some of strange & offensive beliefs that you harbor, but I fear that you are way past the boundaries of rational discussion. Originally, I was going to send you a talk that more or less summarizes Milton Friedman’s ideology (in his own words). You could take a snapshot of that, compare it to today’s government, as well as recent policy, and conclude that reality and Friedman’s ideology are of two different worlds. But because of your assumptions that the ‘sunamis that hit Burma and India’ were ‘not accidental’, that Bush ‘orchestrated’ Katrina, and that the WTC was a conspiracy… I feel no need to make any comments, except for this, which is dedicated to those in love with idea of electoral democracy: how does it make you feel that ‘whatshisface’ has as much voting power as you?
That said, we turn to Athana, who I felt the need to react to (as a student) because she is a Professor, and I believe she is dead wrong. She states (at the end of a recent blog post) that “the world is flat, we all know it…”. Well, Athena, apparently I didn’t know it, so I looked up how much the world had changed over the last little while. I applaud the circumstances and efforts that have been mobilized to increase peoples standard of living (some of which are a direct consequence of what is called ‘globalization’), but don’t lose sight the present:
• Nearly 3 billion people lives on less than $2 a day
• The poorest 40 percent of the world’s population accounts for 5 percent of global income
• George Bush is the President of the most powerful country in the world
Additionally, I don’t have the statistic handy, but roughly 200-300 people control half the world’s wealth. I believe a handful of people control about 5 trillion dollars in the financial markets. And of course, there are many other statistics, but I’m too lazy to look them up, because the point is simple.
To say that world is flattening, from its HIGHLY mountainous state (a challenging argument to make), is one thing. But how anyone, ESPECIALLY a Professor, can conclude that the world IS flat, is beyond my comprehension. You sound like a nice person, but I think it was (unintentionally) arrogant for you to state that “we all know it”. Thomas Friedman may think he knows it, you may think you know it, but there is nothing self-evident about it, or even factual for that matter.
For those of who want to read an excellent critique specifically addressing Thomas Friedman’s book titled ‘The world is flat’ (which rips Friedman’s thesis to pieces), download the following link
http://www.uclaforecast.com/reviews
/Leamer_FlatWorld_060221.pdf
aly k
Art and Athena,
Art,
Your answer to Athena was a GEM and reflects a lifelong piece of my soul about America's best and now LOST times.
The ultra-conservative "Trickle Down" theory first preached by Reagan has been one of the Greatest political-economic frauds on American society. I think my TABLES of our government's historical factual financial performance confirm this conclusion ... as well as what we are in virtual reality experiencing today.
Athene,
I applaud your efforts to show the excesses of the European system as a way to set the record straight of how proud you are of America's system. But at times your enthusiasm and claims carry you a bit too far for this American from Maine who has experienced the European way in depth for over 30 years.
To quote you: "But the mentality of 'State Protection' is strong in many European countries and partially is to blame for their Horrendous Social Security Deficits."
You obviously had a bad experience in Greece. But Greece, Italy, to a lesser extent Spain and France are not the prime examples of European social-economic effectiveness (although Spain is making real progress as is France under Sarkozy).
The Social Security systems in Scandinavia, Germany, Holland, Austria, Switzerland, and perhaps to lesser extent UK are all on SOLID grounds and have been for decades. They are not experiencing "Horrendous Deficits", as you claim.
That France and rest of Europe for that matter, make it difficult to fire people, provide strong legal protection, demand retraining and costly financial rewards for dismissal of employees simply reflects a European Humanistic Culture ... where these social norms are as natural as having thee mid-noon in London.
Such values correspond in spirit to Art Layman's beautiful requiem on our US values long ago of fairness and protection of worker rights ... exemplary traditional Edmund Burke conservative concerns for the community and individual in times prior to Reagan's time.
Lastly, Europeans do not yet have the same geographical movement flexibility to move to another country if they are out of work for any reason in their country of birthright. In the long term, this may change but not in the very near future. This inflates the pressure for a system of economic fairness and worker protection.
Fundamentally, the European social protection systems are based on helping those who fall through the cracks in good and bad times ... because this is the right thing to do in the interest of family security and happiness. I think this cultural sensitivity was born from the experiences of hundreds of years of horrendously destructive wars ... culminating in World Wars I and II.
These indescriable experineces with human evil have made Europeans humble about the pain of the weak, broken down or temporarily troubled, while at the same recognizing the need to provide a workable environment for the adventuresome and risk takers ... perhaps not in the same dimension as the US but sufficiently for a pleasantly balanced lifestyle for the Mainstream as well as the Upstream.
And the innovation gap with America is now closing fast! Europe remains a society that is more broadly and trade skill well educated than the average American performance ... how hard that may be to accept or believe. In this process, however, Europe will remain the society of "We" rather than "M", not unlike Canada by the way.
This is "wakeup time" for America on many fronts and it does no good for us to deny this reality.
Athena,
Correction:
...Europe will remain the society of "WE" rather than "ME," not unlike Canada by the way.
Frank
The "we" approach in my mind translates into building a stronger community through integration, and encouraging people to work and innovate. Not through exclusion, and not through a system that can be easily taken advantage of.
In France for example, if you get fired you may get 57% of your salary for 23 months. I copy from France pays price of liberal jobless benefits
"CAMILLE Grimault-Queret was fired in June as director of the 18-hole golf course in Saint-Germain-les-Corbeil, south of Paris. She wants to find more work — as long as it's the perfect job.
Grimault-Queret, 31, can afford to be picky. She will collect a monthly unemployment check worth 57 per cent of her former salary for up to 23 months, and says she won't look at anything that isn't "attractive" until November."
When we were living in Belgium, I was getting very upset having to pay more than 40% of my income to support people like Camille. (And being a foreigner I was enjoying certain tax breaks). No, I did not mind supporting those truly in need, but Camille? Who was going to wait until she found something attractive? At my expense?
But it is even "better" in Scandinavia. I copy from Forbes
"In Norway the unemployed get 87.6% of their previous salaries for 500 days and in Finland they receive 85.1% of their previous salaries for one year."
The article does mention that in some of these countries the unemployment rate is very low but so is their growth. In France however it is quite high.
A strong safety net translates into fewer incentives to get a job. And also invites more abuse of the system. Ususally the abuse is by the poor, who most of the times are the immigrants. Which translates into an unprecedented growth of anti-immigrant resentment in Europe. Thus, the rise of the extreme right.
The leader of that party, in your country, Pim Fortuyn, was assasinated. Despite his despicable ideology, he was voted as the greatest Dutchman of all ages, beating William of Orange,the founder of the modern Dutch state.
"We" in Europe has come to mean "We, the white-non immigrants."
Notsofast,
You misinterpret what I said about offshore drilling conditions.
I sited 6 or 7 technical operational and contract term conditions that US oil firms should meet, especially concerning Floating Production Systems using Drill Ships (no pipelines nor platforms) and Joint Ownership between US oil developing firm and the US Government ...or a Royalty Fee arrangement between parties that reflects the inherent value of the offshore discovery. Current LEASING arrangements result in a rather stupid Give Away of most of the cashflow proceeds to the oil developing company.
If the key conditions Are Not met by any US contract developing oil firm, then a foreign contract developing oil firm would be offered the same joint Ownership or Royalty Fee arrangements and technical operational conditions. There's nothing wrong with this as a last resort option, as the goal is to get an unusually promising field discovered and into production quickly. This development structure occurs often in offshore drilling ventures.
The key is that the US Government gets its fair share of the cashflows for contributing the offshore land site (0wned by US Taxpayers) like the Government of Norway has done with its offshore discoveries.
Remember also one of the key conditions I mentioned is that all the oil flows will be delivered to the US for sale and not to foreign countries (unless the discovery is bigger than our domestic consumption which is not going to happen ... but did happen for Norway. Norway is exporting, I believe, up to 400,000 barrels a days, all making their nation's Treasury very, very, wealthy.
Wow. Hope all you McCain trolls got lots of points today for your posts!
What are they gonna send you, a tire gauge?
Athena,
The social systems in the mature European countries are well run and tightly controlled. Year in and year out abuses are systematically eliminated as well as cutting benefits that are no longer affordable. So you will note the employment rates in same countries are very respectable.
Your mixing up the discussion by going into race discrimination in Europe is a whole separate issue. Haven't time to go into this. I was only addressing your generalization that the mature European countries are running huge deficits with their social systems which is simply not true. If there are shortfalls, they raise taxes to cover them as people in general want the social protections for reasons mentioned. Norway can be very benevolent with dismissal payments because it is a very rich country with its offshore oi-gas reserves which are 50% owned by the Government of Norway.
Here's the LATimes URL: 40,000 jobs lost. Unbelievable
http://www.latimes.com/news/printedition/asection/la-na-campaign8-2008aug08,0,4031248.story
Now, its business in a tailspin, DHL wants to combine operations with rival United Parcel Service and close its huge hub here. If the merger goes through, community officials and union leaders warn, staggering job losses will eviscerate the economy and the social fabric of nine struggling counties in southeast Ohio.
"Never before have so many people been abandoned at once," said Houghtaling, who runs a local hospice. "It is inconceivable to think about losing 10,000 jobs in the first wave, and the estimates run in the 30,000 range as the wave continues."
Bush raised lotsa moolah from Lima accordng to a Googel search on Lima Ohio. Lose your job, your home, your health. Republicans don't care.
yes
yes
yes
DHL's big mistake was in believing that it's a business instead of a jobs program. Apparently its former employees in Ohio can't find or think of anything productive to do with their time, and it's all cruel, inhuman DHL's fault!
Here's a thought: Professor Reich and his supporters here could put up their own risk capital and buy the Ohio operation from DHL and run it for the benefit of the employees. How about it Professor? What's in your wallet?
Ponder this:
http://www.citytowninfo.com/places/ohio/lima
Political Inclinations
In 2004, George W. Bush garnered more political contributions ($12,942) in Lima than did the other Presidential candidates. The Republican party was the top fund-raiser among political parties in the city.
Let's see what George W Bush gives Lima in return, before he gets ready to leave Washington, DC, on his golf cart.
I have been having problems posting
ords).
Aly K[at]:?
I would love to comment on some of strange & offensive beliefs that you harbor, but I fear that you are way past the boundaries of rational discussion.
I suppose that the mark of a man is not his sanity but his integrity. Integrity can be undermined by insanity and other things like faith: these factors skew every discussion like mine.
Notwithstanding, the war in Iraq marked the leaders of this country for their callous disregard for the truth. Our leaders have been proven to be serial liars. More importantly, his cabinet of liars constantly repeated his lies in public forums. Colin Powell himself lit the world up at the UN with a pack of lies. How could anyone trust him after his two minutes of world fame? It goes to your argument that I am way past the boundaries of rational discussion?
To undermine the integrity of our leaders, we could wonder what happened in the Valerie Plame affair. The President and his men targeted her because her husband exposed his fraud regarding the lie that Sadaam had ordered yellow cake from Niger. Out of sheer revenge, he targeted her and ruined both their lives. When Libby was prosecuted, he pardoned him. Also undermining the integrity of the President was his disregard for the rules of law on the international arena as well as here in America. Not only did he violate the law of War, but he told Putin in his face that the ABM treaty was outdated and he was not going to honor it. Now he is positioning new weapons in the sky and on Russia’s borders.He ignored our treaty with N. Korea and threatened them with Nuclear war. He now threatens Iran. As a casual observer, I have discovered that he has not honored any law that bothered him. These behaviors and many more sinister behaviors that have been laid at his doorstep mark him as an evil man.
To further this irrational? Discussion, was it not George Bush who spied on the entire nation, blamed the head of FEMA for the failure of his administration in New Orleans when it was proven that he was knowledgeable before the hurricane. Was he not involved in the firing of many District Attorneys and responsible for the new laws that re-wrote the Geneva conventions on torture. And, was it not Geoge Bush who assassinated Sadaam Husein and used weapons of mass destruction {depleted uranium weapons} against civilian populations in Iraq and Afghanistan? But most of all, was it not George Bush who frustrated the efforts of the 911 commission to investigate what happened to the World Trade Center? There are so many acts of Power committed by George Bush that mark this man and his character that is it any wonder that I sic am past the bounds of rational discussion?
I am surprised that in only 2 or 3 posts you could so readily mark me so that you are completely fed up with me as to stop any further discussion. Yet, is it not interesting that someone of high status, say your boss, or even the president can commit one crime after another over a span of 8 years and you fault my suspicions rather than wonder if what I say could happen? Why is that? Why is it that you believe that he would never dis-honor his office after all that has passed?
Just recently, it was revealed by the CIA that letters were demanded to be forged for George Bush implicating Al Quaida and Sadaam Hussein in order to orchestrate the crime that was commit against Iraq and its people? He seems to have covered all of his base to make this war possible and it was all orchestrated by George Bush. In fact, is it that hard to believe that he dropped the WTC or did many other evil things in view of the exposed truths? Can’t you believe that our president is capable of the most sinister acts or is it that you convinced that I am a nut.
Are you familiar with the popes of the last 2000 years or the Emperorers of Rome. They had no problem exercising evil as any capitalist should know. Perhaps you are convinced that George Bush is an honest man and holds Jesus dear?
All that said, the mark of this man holds that what ever happens, never except anything at face value. E.g., a scientist commits suicide and the press tries and condemns him for murder in the Anthrax case? It is an open and shut case? However, when you have marked a man…can anyone doubt? So it is that I feel the way I do.
I have been having problems posting
ords).
Aly K[at]:?
I would love to comment on some of strange & offensive beliefs that you harbor, but I fear that you are way past the boundaries of rational discussion.
I suppose that the mark of a man is not his sanity but his integrity. Integrity can be undermined by insanity and other things like faith: these factors skew every discussion like mine.
Notwithstanding, the war in Iraq marked the leaders of this country for their callous disregard for the truth. Our leaders have been proven to be serial liars. More importantly, his cabinet of liars constantly repeated his lies in public forums. Colin Powell himself lit the world up at the UN with a pack of lies. How could anyone trust him after his two minutes of world fame? It goes to your argument that I am way past the boundaries of rational discussion?
To undermine the integrity of our leaders, we could wonder what happened in the Valerie Plame affair. The President and his men targeted her because her husband exposed his fraud regarding the lie that Sadaam had ordered yellow cake from Niger. Out of sheer revenge, he targeted her and ruined both their lives. When Libby was prosecuted, he pardoned him. Also undermining the integrity of the President was his disregard for the rules of law on the international arena as well as here in America. Not only did he violate the law of War, but he told Putin in his face that the ABM treaty was outdated and he was not going to honor it. Now he is positioning new weapons in the sky and on Russia’s borders.He ignored our treaty with N. Korea and threatened them with Nuclear war. He now threatens Iran. As a casual observer, I have discovered that he has not honored any law that bothered him. These behaviors and many more sinister behaviors that have been laid at his doorstep mark him as an evil man.
To further this irrational? Discussion, was it not George Bush who spied on the entire nation, blamed the head of FEMA for the failure of his administration in New Orleans when it was proven that he was knowledgeable before the hurricane. Was he not involved in the firing of many District Attorneys and responsible for the new laws that re-wrote the Geneva conventions on torture. And, was it not Geoge Bush who assassinated Sadaam Husein and used weapons of mass destruction {depleted uranium weapons} against civilian populations in Iraq and Afghanistan? But most of all, was it not George Bush who frustrated the efforts of the 911 commission to investigate what happened to the World Trade Center? There are so many acts of Power committed by George Bush that mark this man and his character that is it any wonder that I sic am past the bounds of rational discussion?
I am surprised that in only 2 or 3 posts you could so readily mark me so that you are completely fed up with me as to stop any further discussion. Yet, is it not interesting that someone of high status, say your boss, or even the president can commit one crime after another over a span of 8 years and you fault my suspicions rather than wonder if what I say could happen? Why is that? Why is it that you believe that he would never dis-honor his office after all that has passed?
Just recently, it was revealed by the CIA that letters were demanded to be forged for George Bush implicating Al Quaida and Sadaam Hussein in order to orchestrate the crime that was commit against Iraq and its people? He seems to have covered all of his base to make this war possible and it was all orchestrated by George Bush. In fact, is it that hard to believe that he dropped the WTC or did many other evil things in view of the exposed truths? Can’t you believe that our president is capable of the most sinister acts or is it that you convinced that I am a nut.
Are you familiar with the popes of the last 2000 years or the Emperorers of Rome. They had no problem exercising evil as any capitalist should know. Perhaps you are convinced that George Bush is an honest man and holds Jesus dear?
All that said, the mark of this man holds that what ever happens, never except anything at face value. E.g., a scientist commits suicide and the press tries and condemns him for murder in the Anthrax case? It is an open and shut case? However, when you have marked a man…can anyone doubt? So it is that I feel the way I do.
Bob, shouldn't the town of Wilmington consider condemning the DHL plant assets, purchase them, then operate it as a publicly owned contract packaging processor? Then Wilmington saves its jobs and maybe some good things happen as a result.
Athena:
I had forgotten about the seaport thing. You're right, that was crazy.
I've been to the UAE on business a few times and can honestly say that I've felt more comfortable there than in some parts of the United States.
Saying that a UAE-based company couldn't own a U.S. enterprise because someone who commited a terrible crime was from there is no different than saying that companies headquartered in New York cannot own facilities in other parts of the country because Timothy McVeigh was born and raised there.
Nobody in America would take that last bit seriously, because it would so idiotic. It is too bad that many on both sides of the aisle let prejudice achieve such a small minded outcome.
Unlike Michelle Obama, I have been proud to be an American/proud of my country on many occasions since becoming an adult. This was not one of those times.
Anonymous Matt
When I stated that you were ‘past the boundaries of rational discussion’, I was referring specifically to your comments that I quoted in my first post (on this page). Additionally, I made this judgement after I read your beliefs that the sunamis, Katrina, and the WTC had all been conspiracies masterminded by George Bush et. Al, and perhaps the entire govt (though you aren’t too specific about the latter).
These insanely idiotic statements aside, some of what you say in your most recent entry is correct. Yes, the administration has lied a lot (though politicians began deception way before the Bush era), and you won’t find me (along with numerous officials in the government for that matter) defending your executive branch’s abuse of various parts of domestic /international legal code.
But murder? Conspiracies? OH PLEEEEEEEEEEEEASE… The President of your country has a hard time putting a sentence together, and you want me to believe that he’s a criminal mastermind? I prefer to think of him as a nice guy who likes burgers and beer, and has no idea what the hell he’s doing. The outcome of this administration’s adventure in Iraq has resulted in an Iran-friendly regime taking power in Iraq, and your country facing a humiliating withdrawal in the next little while (so long as Obama is elected), not to mention wasting money, precious lives (on both sides), and SOOOO much lost credibility and legitimacy in international affairs. Can you explain to me why these masterminds found it NECESSARY to increase Iran’s power in the region, while doing all of the above as well? Hmmmm… perhaps Bush and Cheney are secret Muslims who wish ill on America? Now that would be the sexyest conspiracy of all hahaah :)
Dr. Reich,
Your story about DHL-Germany misses the whole point. Of course DHL has right to make an acquisition of a mail post shipping company. Of course, they have a right to take steps that make their operations more efficient. But when they do latter at high social costs to a community, as many US firms do all the time by the way, then our US social protections regime should kick in, requiring at least one year salary payment and retraining of displaced workers and help in search for new employment.
The irony is that DHL Germany would do all these things naturally if they closed down a business in Germany with similar expected social costs. They would even offer workers a job in the new location and cover the relevant transport/rehousing costs.
But the US has no such culture, so DHL is just exploiting our 18th century social protection systems.
Athena:
Am a little struck by your arguments. You seem too bright and accomplished a lady to be bandying about one or two examples of abuse and then, essentially, extrapolating that as rampant throughout the population.
In the time period of your Camille example the French unemployment rate was 10.1%. Are you implying that that 10% were all lazy loafers looking for an "attractive" job? Could it be an indication that jobs were not plentiful?
Now I don't know the salaries of golf course directors in France but I can tell you that few "working" people in the US could get by without a lot of blood, sweat and tears on just 57% of their previous salaries. Most of us, however, would be plenty happy with that as compared to what most of us can receive as unemployment benefits in the US. In NC in 2005 max benefits were $426/week. That, my dear, would entrench me solidly in at poverty level income.
Now I have little knowledge of European protocals and I doubt executives there get anywhere near the outlandish severance packages that executives in the US receive but I'm sure their packages amount to far more than 23 months of 57% of their previous salaries.
When my previous employer saved the company by cutting heads I received 6 months severance at full pay and benefits. A friend I had worked for, who had achieved VP status, received full pay and benefits for 18 months and his was a six figure income and mine was not.
Of course the argument would be that there are fewer opportunities available for someone at his salary level than for mine and therefore the time difference is equitable. On the other hand he was in his early 40s and I was 65. His chances of finding comparable employment might be a hundred fold better than mine. In fact within two months he found a comparable position, both in responsibility and pay, and was able to double-dip for the remaining 16 months and he didn't have to relocate.
I noticed in the article that France was considering cutting off benefits for anyone turning down a job. Now they didn't say whether any job offer had to be with commensurate pay or benefits. But let's assume that Camille had a job offer with a pay package commensurate to her previous one. But suppose that working conditions were far from reasonable or that during the interview the hiring boss ogled her or she didn't feel she would fit in with existing personnel, are you suggesting that she must take the offer or she is a freeloader and should lose her benefits? Why is an executive allowed, through more favorable severance deals, to pick and choose and bide time looking for the most "attractive" offer but run-of-the-mill employees must take the first offer or lose their benefits?
Now we also find from the article that hiring is not rampant in France partly because firing is a long involved process and employers are not anxious to hire willy-nilly. Could that be a prime determinate of the 10% unemployment rate?
In the US we have abusers of laws and systems at all income levels. One could argue that it is just a social cost necessary to do the greatest good for the greatest number. Surely attempts should be and are made to eliminate or mitigate them but to condemn "all" as freeloaders because the system affords the time to be discerning in their job choices is not logical argument and tends toward the peevish.
In all, your European examples cite a one to two year benefit. Costly no doubt but in the grand scheme of things not a really big deal. Had we comparable programs in the US we would also have abusers but they would be the exception, not the rule, as I would suggest is the case in Europe.
Perhaps you have never been unemployed and are not familiar with the Kabuki Dance of the job seeking, interviewing process. It is a process fraught with peril and stress. Every interview, and 90% of the resumes sent out don't lead to an interview, become a competition. Those of us with management experience have a much better idea of what prospective employers are keying on but that can vary extensively. The general rule of thumb is to exhibit ambition and aggressiveness, tinged with a teamwork mantra. But then some employers want go- getters who will not follow the pack (be good team players) but will lead rather than follow. Others, especially when interviewing with your next boss, may be very skeptical of strong skills and personalities seeing their replacement sitting across the table. At best it's a crap game and the odds, as usual, favor the house.
All in all the European model is far preferable for the "general welfare" than the US model. Employees will always be at the mercy of employers and programs that level the playing field a little are not bad.
Let me reiterate again, that based on your professional level I would expect more of a macro look at situations and all of the conflicting interrelationships and less of an argument of, I don't want to pay for them.
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Art
You say “extrapolating that as rampant throughout the population.”
If you read the whole article you will get a better idea on the situation in France.
You also say “Now I don't know the salaries of golf course directors in France but I can tell you that few "working" people in the US could get by without a lot of blood, sweat and tears on just 57% of their previous salaries.”
The level of your unemployment benefit reflects your initial salary. If you are among the poor, the benefits can go up to 90%.
As for the “picky” part your argument, you say that an executive has the right to be picky, why not Camille? It is not a matter of rights here, it is a matter of necessity. An executive who is stalling, is hurting his bank account. Camille however, is drawing from the money that I have paid the state, for those who are truly in need. Not only I don’t mind paying for those truly in need, but I consider it my duty and I do it gladly. However, I reserve the right to mind, and mind strongly, paying for those who simply stall because they know the safety net that all of us provide for the needy ones, allows them to stall or be picky.
As for the unemployment rate in France, it has been attributed to lower growth. Mainly the country does not produce jobs. There is a strong central state, imposing strict regulations over businesses and innovation is stifled. Thus the brain drain as it is discussed here
I copy : “But complaints like those of Claude Allègre, the former French Education Minister who heads the Paris VII geochemical lab, are all too common. He decries France's anachronistic "Soviet" system, in which control is centralized and researchers must run a bureaucratic obstacle course, whether to buy expensive equipment or order basic office supplies.”
Similar articles on the brain drain in Germany
Also you say “Had we comparable programs in the US we would also have abusers but they would be the exception, not the rule, as I would suggest is the case in Europe.” I agree with the first part of your statement. I do not think we would have many abusers in the US because we have placed a great value on work as a society. This value has been undermined in France. Strong labor unions have pushed for a thirty-five hour week and seven week vacation, with the thinking, “less work, more people at work.” They got the first part right.
And I do insist on the relationship between strong welfare state, immigrants and xenophobia as it has developed in the continent. Tito Boweri, a professor of economics in the university of Milan put it succinctly “More than abuse strictly speaking, it is probably the fact that low-skill migrants go to countries with the richest welfare state which drives concerns of EU citizens.” There is nothing funny about a continent where 12 countries have voted fascists into their parliaments. I can see the relationship. Maybe you can’t. Fair enough.
Finally you say “All in all the European model is far preferable for the "general welfare" than the US model.” In the French model you have a per capita GDP at PPP of $33,800, and the US of $46,000.
I gather that you have a strong socialist preference. I do not. I have seen the weakness of both systems and I have come to conclude (from a macroscopic assessment) that the weakness of the latter are far more detrimental to society’s growth.
Athena:
Just read the Herald Tribune article. That was hillarious!
What was hillarious was that I would love to see US businesses have to follow those laws. I do realize that there are significant downsides to the approach but it certainly takes away some of the "at will" terminations that occur here. Even better it may make some of the US execs have to earn their ridiculous salaries and bonuses.
Mass layoffs of employees can occur for reasons all over the map. Frequently it truly is necessary for company survival. At other times it's just to appease Wall Street and impress them with the CEO's grasp of cost control.
When a company eliminates a process or a product line it often has little choice but to eliminate the employees associated with either. To their credit many employers make good faith efforts to salvage as many of those employees as they can. In nonunion environments these efforts are usually focused on the best workers but can come down to nothing more than "I like Johnny better". The rules are much more rigid in union shops generally netting down to seniority. Seniority can certainly be inefficient since harder workers may be let go and slackers may have to be kept on but in a larger sense it is less arbitrary and is easier for displaced workers to understand. There are significant pyschological impacts from losing one's job, especially if one does not understand: Why me?
Some layoffs are temporary, or intended to be, and can be seen as necessary to the continued viability of the business. Usually these kinds of layoffs are limited to production workers and support staff. Some companies put off a temporary layoff because the process is not without significant costs and depending on the expected downtime it may not be worth those costs.
If production requirements slow down and it appears they will remain that way for an extended period there is seldom an option. Few logistical options are available if there is no demand for work.
In office areas, excluding direct production support staff, a whole different picture often pops up. Very seldom does the workload go away it just gets redistributed to the remaining staff. There are instances where office automation allows for that redistribution with little imposition on those remaining. There are many other times when the workload creates an unfair burden on those having to pick up additional work.
The fallacy of the latter is that the quality of the work done declines. Things fall by the wayside and don't get done or don't get done timely. Office workers dealing with massive amounts of detail tend to begin to accept whatever information the system delivers without reviewing closely the veracity of that information. When precise, accurate information is missing or slow: meetings can be postponed; management can fail to address problems timely; wrong decisions can be made due to erroneous information; frequent case, the employees are told to do the work all over again to make sure it's correct.
All of the sudden, the layoff, generally couched as an efficiency move leads to terrible inefficiency. The offset is for the remaining employees to work longer hours getting all their work, old and new, done accurately and timely. Timely, of course, being a management decision. From a management perspective this is not problematic because those remaining are thankful for dodging the bullet and are scared to death they'll be in the next wave. Never does a layoff occur that employees don't view it as the tip of the iceberg.
In office type layoffs the process is often totally arbitrary. Managers will be asked who is expendable. Annual reviews may be perused. Discussions will be held to get a collective viewpoint on John versus Susie. Personal/family situations may be considered along with other intangibles. You can bet that boatrockers will be at the front of the line regardless the worth of their boatrocking or the quality of their work and work ethic. In the final analysis the selections are often arbitrary and sometimes capricious.
Given all these vagaries and the frequent inequities ocurring in these choices it would be great if employers had to document and justify their decisions to the displaced employees. I would even argue that it should be a moral imperative. The general rationale offered up is that management just picked names out of a hat. If this was just a policy then the justifications would continue to be nothing more than pandering; feel good misfortune; but if litigation were an option then the basis would take on a whole new light, forcing business managers to jump through hoops. I would love it!
Admittedly, in the current practice litigation is always an option; sex discrimination, age discrimination, unfair termination, but it can't start unless there is some substantial evidence available to justify further investigation. In 99% of the cases this just means folks take their lumps and move on. Of course if severance is involved then waivers must be signed where the employee waives rights to lititgation. It is one of the drivers for severance pay.
Welcome to Business 101.
Athena:
If you read the whole article you will get a better idea on the situation in France.
I read the whole article. Now you can argue a chicken and egg question but years of experience tells me that when unemployment is 10% jobs are not just falling out of the sky. The article references no data as to how many or what kinds of jobs might be available to Camille, it just condemns her for looking for an "attractive" job. Should she take a job sweeping streets just to satisfy your disdain?
The level of your unemployment benefit reflects your initial salary. If you are among the poor, the benefits can go up to 90%.
And if you're poor you see that as a problem? It ain't for the rest of their lives. Camille was the target of anguish here and she was only getting 57%. Stick with logical argument.
It is not a matter of rights here, it is a matter of necessity. An executive who is stalling, is hurting his bank account. Camille however, is drawing from the money that I have paid the state, for those who are truly in need.
It's not a matter of rights!? What the hell is it then!? Most folks live to their income level. One might assume that Camille has some savings to supplement her 57%. A 57% that is not likely sufficient to support her living accomodations. Therefore she also is hurting her bank account.
If that executive received an attractive severance package it came from the profits of his company. If you bought some of those products you are paying for his severance as well and his severance likely will not stop when he finds another job. Welcome to the wonderful world of capitalism, you and I pay regardless. Taxation is just more direct and visible.
Again, not familiar with France but in the US a lot of executives get severance packages that will allow maintaining existence from the interest on the severance. The former CEO of my oft mentioned previous employer damn near bankrupted the company but will get $1 million a year for another few years plus all the stock options he left with.
However, I reserve the right to mind, and mind strongly, paying for those who simply stall because they know the safety net that all of us provide for the needy ones, allows them to stall or be picky.
There was nothing in the article that suggested Camille was stalling merely that she was being picky. Nor was there anything other than her job title that suggested she was well off and merely gaming the system. That was the implication but there was not enough data there to support that assumption. One would think a scholar would want more information before accepting an implied conclusion. A discerning analyst reads every article looking for the political bent of the author to determine the degree of validity of the assertions.
It does the system no good for every unemployed person to take the first job that comes along and then seek out a better one. Businesses incur costs for that kind of behavior and you and I pay those costs. All of us who have ever been unemployed understand that there is a point in time where preferences have to be taken off the table and a job, any job, becomes the primary goal. Until that time what is wrong with seeking a job that is consistent with your career objectives? You're letting your emotions overrule objective analysis.
As for the unemployment rate in France, it has been attributed to lower growth. Mainly the country does not produce jobs. There is a strong central state, imposing strict regulations over businesses and innovation is stifled.
Did it occur to you that maybe business should get over it? Even under "strict regulations" there is money to be made. Businesses often love to play the pity party game and they will stonewall governments until they get their way. In the US "innovation" is the way around "strict regulations". There were a variety of regulations, laws even, governing the shenanigans going on in our current subprime mess yet that did not deter business from trying to find a way around them, much to the detriment of the rest of the world. There have been any number of financial fiascoes here in recent years that beg for "strict regulations" in the US. Could France be ahead of the curve on this one?
He decries France's anachronistic "Soviet" system, in which control is centralized and researchers must run a bureaucratic obstacle course, whether to buy expensive equipment or order basic office supplies.”
If you make a scientist or highly technical person or especially a Marketing person fill out a Purchase Order, they will cry real tears. These are professions who abhor any impediment to their spending money. I have been a Controller for a variety of companies employing all these types and they all hated me because I made them jump through hoops when they wanted to spend money or when I called them on the carpet when they circumvented the process. You can't run any organization without strict cost controls. It is human nature to abuse that which is not controlled. Highly technical people tend to be high strung and often full of themselves and their importance and they take personal affront to any restrictions. Maybe they too need to get over themselves.
Also you say “Had we comparable programs in the US we would also have abusers but they would be the exception, not the rule, as I would suggest is the case in Europe.” I agree with the first part of your statement. I do not think we would have many abusers in the US because we have placed a great value on work as a society. This value has been undermined in France. Strong labor unions have pushed for a thirty-five hour week and seven week vacation, with the thinking, “less work, more people at work.” They got the first part right.
I do agree, as a nation we do value work. I don't know that we do so anymore than Europe and I can tell you that we likely don't as much as those in China or India or much of Southeast Asia. We tend to value work primarily because it is necessary to maintain a standard of living. Our work ethic is not near what is was 30 or 40 years ago. You would find few Americans who would balk at a 35 hour workweek or seven weeks vacation. Since we don't have those we work whatever the prevailing winds tell us we have to work. Many, of necessity, work two and three jobs, not because they value work but because they value their living standard.
Had we unemployment insurance similar to much of Europe I guarantee you that we would have many milking the system. We have some now who work only long enough to qualify for unemployment and then manage to lose their jobs in a manner that allows them to receive benefits and they keep going through that cycle, over and over again.
The basis for the 35 hour workweek in France had some theoretical merit but logistically may have been faulty. I think I read an article recently that stated that the amount of work they turn out equates favorably to what we accomplish in 40 hours.
We have to realize that there are cultural differences that drive different motivations of working folks. You have done your share of railing about our spending habits, our lack of thrift, our praying at the altar of consumption. Be our habits bad or good they are the reasons we work long and often hard.
I can't get into the European immigration issue with you for I have little knowledge of the subject.
Finally you say “All in all the European model is far preferable for the "general welfare" than the US model.” In the French model you have a per capita GDP at PPP of $33,800, and the US of $46,000.
Now aggregate statistics don't do much for me. How do we calculate per capita GDP, especially at PPP? If you take nominal GDP per capita, some argue a better comparator given fewer estimations:
France, $42,053; US, $45,959.
Not a lot of disparity for such a significant difference in government giveaways.
How about poverty in 2000, for overall poverty the US had 17.1% and France had 7%.
A little out of date but try this commentary.
It would seem your comparative denunciations "should be made of sterner stuff".
I gather that you have a strong socialist preference. I do not. I have seen the weakness of both systems and I have come to conclude (from a macroscopic assessment) that the weakness of the latter are far more detrimental to society’s growth.
I don't have a strong socialist preference. I have a strong fairness preference and while I have limited knowledge of France or any other country's economic processes I am reasonably familiar with that of the US, both as an observer and somewhat of an insider. It is very clear to me that laissez-faire capitalism is far from the answer. I don't hold out France as the model to follow but despite American's protestations to the contrary, other folks have better ideas too.
Art,
You may find it interesting to know the basic framework of unemployment compensation in Holland without going into all the detailed criteria one must satisfy which are very sensible.
HOLLAND
If you lose your job, you can claim unemployment. The main requirements are that you must have been employed at least 26 weeks out of 36 weeks (19 out of 39 weeks for artists, musicians, film employees) before the last day of unemployment; you must be available for work; and you must be under 65.
Unemployment benefits total 70% of your most recent earned salary to a maximum benefit of Euro 177.03 per day ($255.00 per day). Your employment history determines the length of this benefit and will be paid for as many months as the number of years in employment (with a maximum of 38 months). Following is a good approximation of the duration of benefits.
EMPLOYMENT............DURATION OF
PERIOD.................BENEFITS
4 years or less..........6 months
5-9 years................9 months
10-14 years..............1 year
15-19 years..............1.5 years
20-24 years..............2 years
25-29 years..............2.5 years
30-34 years..............3 years
35-38 years..............38 months Maximum
To illustrate my point how the system is constantly adjusted over the years for no longer affordable terms and to eliminate abuses -- WITHOUT walking away from the basic principle of a humanly FAIR and DECENT coverage --, when we first came to Holland in the late 60s, you received 80% of your salary for up to 5 years with NO maximum monthly or daily benefit payment limit!
Something else we Americans aren´t aware of is that these much stronger unemployment compensatiuon systems in Europe also act as a powerful ECONOMIC STABILIZER so that down cycles here are less severe.
Otherwise, down cycles would be felt very seriously in each country because, as I mentioned to Athena, labor mobility to seek work in other parts of Europe is practically still non-existent.So each country is really under pressure for this reason, among other reasons, to take care of its people in bad times.
Art,
I forgot to mention there are some well-controlled procedures in Holland to insure the unemployed person is actively engaged in the job solicitation process.
Frank:
Well right off the bat I'm upset. What's this limit at age 65 all about?
Seriously, the idea of some stabilization to economic downturns is an excellent point that I hadn't even thought about.
I'm not opposed to requirements that the unemployed, to be eligible for benefits, must actively be seeking work. I would guess this is a fairly universal requirement. In the total analysis it must be remembered that as you move up the career ladder it becomes much less efficient and productive to go out every morning and knock doors looking for openings. In the US, many companies with more professional openings will not entertain interviewing a walk-in but will just tell them to submit a resume and they will be contacted if the company is interested.
In the US the Internet has become a significant resource with job openings posted from all over the country easily accessible. Also posting one's resume on the Internet offers more exposure than mass mailing resumes. Regardless the resources for unemployed folks at higher levels, job searching is often a waiting game.
I have to assume that Athena is not well experienced in being unemployed. In the US companies are very reluctant to hire an experienced, well paid, applicant into a position with lesser pay or lesser responsibility than they had previously attained. The fear is that the applicants are merely willing to accept the job as a way station until they can find something more commensurate with their previous employment goals.
My employer prior to my last one went out of business. I was unemployed for almost a year. I accepted my meager unemployment benefits for 13 weeks and then had to start living off savings and credit cards. Initially I didn't seek temp work due to my wife's health and the fact that it exacerbates scheduling interviews and receiving phone calls. As best as possible you like to be immediately available for any opportunities. Further, temp jobs, in my field tend to be clerical or at best analytical and the hourly pay is a pittance compared to my previous earnings.
After that almost year, I realized I had to do something and I took a temp job as an analyst, at that hourly pittance rate. After a couple of months a fulltime, permanent position became available with the company I was temping for. I had made excellent contributions to the data collection and reporting process in my temp position so I became a primary applicant for the permanent position.
Now they had my resume and they knew my earnings history. I had years of experience in accounting and finance management with both large and small companies. In the larger companies I never achieved executive level status but in many of my smaller employers I was the number 2 manager reporting directly to the owner or the CEO. I have a dynamic personality and am very good at whatever it is I do.
Of course we started with an interview with my direct boss and then his boss; both interviews common practice. I then had to interview with the VP of North American Finance and then the Corporate VP of Human Resources. All this for a financial analyst job? What caused this peculiar interview process? The job opening had no management requirements and my experience had plenty of it. The starting salary was 30% below my previous earning level, not counting my zero earnings while unemployed. They were greatly concerned that I was taking the job until I could find something more in line with my experience/earnings history. Very probably my wife's health situation and my explanation that I could no longer seek a management level position got me over the hump. If not for that I doubt I would have been hired.
I have known many professional managers who have faced the same type of problem and most felt that previous experience/earnings disqualified them from consideration. The experience alone, represented on a resume, often negates the opportunity for an interview for a lesser position where you may be able to explain your personal situation.
As I mentioned to Athena, losing a job, for whatever reason, "your fault, my fault, nobody's fault", can be a debilitating event. Experts rank it right behind losing a loved one in stress level and loss of energy. After years of getting up and going to work everyday, doing vital work, you become a junk mail clerk, printing out and sending resumes. I have sent, I don't know how many resumes, in response to ads where you would swear the ad was written from my resume, only to never get a response. This only aggravates the loss of self worth and confidence. An impressive resume and no one even wants to talk to you.
Professional job counselors, in the US, are well aware of these psychological impacts and they preach, constantly, about looking at the situation as an opportunity. An opportunity to find an even better career path and to seek, not only an "attractive" job but the "perfect" one. They realize that any job might ameliorate some of those negative feelings but in the long run taking the wrong job will surface them once again.
I, like most, was not going to pare back my living standards because of a blip in my career path. Oh, we cut back on going out and superfluous expenditures but we had a home, with an expensive mortgage, we had lived in for 20 years at that time and I was not inclined to sell it and move into a shack when I was sure that employment was just around the next corner. My wife's dementia made relocating her extremely testy if not impossible.
In fact, I had an opportunity to accept a new position with my employer at the time but it would have meant relocating to Philadelphia. New surroundings, new doctors and househunting and all the other issues involved with relocating would have to have been handled by myself. This made the option null and void from the get-go. A fact, perhaps, for which I will receive condemnation from Athena. ;)
As often advised, I joined a networking group and while not real fruitful it did allow for a lot of commiseration. Ironically, you run across many with similar experience and while you attempt to help one another you are hesistant to disclose information about a job you may still be in the running for.
All in all, it is a process fraught with frustration and stress. It plays itself out on your psyche and on your loved ones. Once you have been there, especially at an older age, a fact that only adds to the difficulites, you tend to be very empathetic with anyone going through the experience and are much less inclined to second guess their behavior or their goals.
A system which provides at least decent economic relief doesn't eliminate all the other problems of unemployment but it does reduce the monetary concerns which can allow for increased energy and lesser stress in your quest.
I don't mean to be too harsh with Athena but it is far too easy to sit in the cheap seats and second guess and criticize the actions of others. There are no perfect systems out there. Some will always seek to take advantage; it is the nature of man. More irony, it is often much easier for the "poor", usually lower skilled workers, to find alternative employment, assuming decent employment opportunities, than for those who have moved up the ladder to a world of fewer absolute job opportunities.
Am not a religious man but I have always tried to follow one thought when viewing those less fortunate than myself: "There but for the grace of God, go I".
Art,
Thanks much for your open-hearted sharing of the inner turmoil and denigration of self-worth that comes with a job dismissal.
We've known two close American acquaintances who've suffered greatly from a job loss in their forties involving identical rehiring obstacles you highlight.
I've taken serious risks in my career development to become reasonably professionally independent of the frivolous or devious workings of those above me. So, I've been in business for myself for most of my years on this earth. From an early age I was always moved by Robert Frost's poem, "The Road Not Taken." The last couplet goes like this which you may recognize Art:
"I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I--
I took the one least traveled by,
And that has made all the difference."
My 30 years hands-on exposure to European cultures, as a general management consultant and problem solver, has humbled my perceptions of what is the ideal social-economic democracy.
My brief conclusion is that a society should enhance those traditional values that have been serving ALL its people well and fairly ... while also keeping an open eye and ear to observe, listen, learn from others, face the reality of its own failings and
vulnerabilities ... and then make the appropriate political-economic adjustments in the interest of broad and narrow circles. I conclude Europe does this better than our country does. This applies to many things besides our poverty-intensifying social protection and benefit systems.
You´re a good man with whom it´s more often than not a pleasure to agree with than to disagree with.
Frank:
Not a huge reader of poetry but had heard the passage before. Given the dominance of my left brain I struggle with allusion and illusion. My intuitive senses aren't all bad but my creativity is horrible. My analytical skills are pretty fair, if I do say so myself.
Those deficiencies likely led me to take the road most traveled. All in all not a bad trip but my rebelliousness often overshadowed my talents and kept me from achieving as much as I might have been capable of. On the other hand, if we view it from a sociological standpoint, I advanced far beyond my father's achievements and those of my older sibling. Can we say I was a sociological success? ;)
I have played the business game and loved it. I have done things, sometimes at the urging of my bosses and at other times simply from an internal urge to one up something or someone, that I am not happy about when I look back but, fortunately, I am not big into long lasting self-flagellation. What happened, happened, I can't change it, generally I can't take it back, all I can do is regret it and try to do better. Works most of the time.
I am impulsive and do not suffer fools gladly, even if I am the one making the fool determination. Once, when I was General Accounting Manager for plant operations of a fairly large enterprise and I was responsible for payroll with a payroll clerk reporting to me, we had a situation develop. One evening a plant supervisor had forgotten to let us know about an employee working second shift who requested his paycheck the night before payday. My boss, who lived 15 minutes from the plant, was called and he authorized security to let the supervisor into the locked payroll office to retrieve the paycheck. Most of the plant checks were already stuffed but the admin payroll checks, including executive paychecks were still unstuffed. Now this was a company that was paranoid about the confidentiality of payroll information; folks at headquarters had been fired bceause some payroll info got out. I got wind of the activity of rooting for the check (another long story) and learned my boss had authorized it the next morning. I was furious. I took my payroll clerk to my boss's office and proceeded to rake him over the coals. I took the payroll clerk along because his was the job that would be at risk if any confidentialities were violated.
After our meeting I was severely chastised for chewing out my boss on front of my employee. He was probably right but he was an ineffectual wimp and protocal never entered my mind. Strangely, in next years budget, my job was eliminated. Worked out well though because I was transferred to another division, I was well thought of by higher ups, and that division was growing while ours was declining. All's well that ends well. Whew!
Throughout my entire career I was always concerned for the little people. More than likely because I entered the working world as one, long before I got my degree. I tended to catalog inequities or mistreatments I was privy to, not for any revenge or retaliatory actions, but just for compiling a database in my analytical mind. Overtime it began to accumulate and molded my views of our economic values.
In looking back I am always amazed at how I missed what was happening with wage growth after the eighties. From 1973, when I graduated college, through 1990 my earnings had increased by almost 500%, in 1977 alone they doubled through promotions, so I wasn't tuned into mere annual increases even though I often had to do employee reviews and recommend raises. Once I began to realize that so many little people had really seen no wage gain from the late seventies through 2000 this further solidified my angst for the plight of working people.
Like most, I saw the escalation of executive pay, but since I aspired to those levels, I overlooked the parallel. Once it became clear that the few were getting rich on the backs of the many, my consternation with free market capitalism intensified and I too, began to catalog ideas for a better way. Other than an occasional disagreement with management my catalog sat on the shelf.
Globalization and free trade aggravated the problems rendering so many helpless with almost no recourse.
In looking back I see a picture where most working folks didn't see their wage stagnation either. Around that time credit was starting to boom. Credit cards were arriving in the mail, unsolicited, everyday. Might as well use them. Once balances began to mushroom the problem focus was usually directed at misuse and not the fact that wages weren't keeping up.
When Reagan entered the stage and began all the hoopla about taxes being to high and you know better how to spend your money than government, taxes became the focus. If you can't pay your bills, it's not because you are spending too much or that you haven't really gotten a raise in years, it was because government was taking too much of your money. Subconsciously, maybe unconsciously, workers still anicipated that wage increases in the future would lift them out of financial difficulty. Up to today many haven't awakened yet. They still believe they are overtaxed.
Anyway, as I began to read more about Europe and there social solutions, I began to see the light and realized there are other answers. There are better ways. There are safety nets that could enable hard work and diligence to payoff, even in America. In America they would be extremely hard sells but to me if we don't change the trajectory we are headed for big trouble.
Not to be too hysterical but I can see where if we continue on the same path we are on we will not only become a pauper nation but we will be a nation of paupers, save the very few.
I do view myself as a significant friend but like to think I am a formidable foe.
Aly K.
I am so glad you think that Milton is brilliant. I am glad you herald his economics.
I don’t believe that Friedman had anything to offer. His theory of Free Trade was a gimmick to do by stealth what traditionalist have done by war…namely, to seize slaves for their industries. I think all Republicans want a free ride and are basically dishonest and evil. They pretend they like capitalism only because it unleashes the evil from down below and they can live off the work and profits of others. They are worse than the poor welfare recipients who want a free ride. At least the welfare cheats don’t kill whole nations to argue free trade and they don't relish the plight of others in order to profit by them in the Stock Market.
I thought it interesting that they preach free trade, no free lunch, and laisse-faire capitalism but at the end of the day when the chips are down, they are on the take just like the poor. All that philosophy falls short of truth. Isn’t that funny. When Baird Stern collapsed, when Freddie Mac and Fannie May got it socked to them, and when wall Street and the banks realized they had created a mess, suddenly, America has to bail them out because it is good for America? Social Security, Clean Air, Environmental Standards, Protection Agency, Education etc..according to them, are bad for the bottom line? Causing the collapse of America is ok; robbing health recipients of health care, and all that other stuff is ok for America?
Republicans don't like rules, don't like to be bothered by minimum wage entanglements, don't like National Health Care and they don't like profits eaten away by displaced workers. All Milton Friedman exemplifies is a delusion for republicans to misbehave and screw America. When they are screwing the american public of Social Security, Pension funds, etc. they call it free market. So long as they are exploiting the others and the profits are coming to them, they like Free Trade. When it goes the other way, they are bigger moochers than the poor. Now, it’s SAVING America.
Free Trade my eye.
Robert said...
"In addition, lots of people in Wilmington and Lima, Ohio, will have to endure the cost and emotional pain of trying to find new jobs, perhaps even moving to another city in order to do so."
A guaranteed basic income is a better way to clean up the mess capitalism creates with chronic unemployment as opposed to employer subsidized insurance schemes. Moral as well as pragmatic economic arguments are plentiful establishing legitimacy for this approach. Part of the moral argument is developed nicely by Michael Howard (Philosophy- Univ. of Maine).
He argues that work has inherent moral ambivalence. We contribute to society through work but we are forced to labor in order to survive. He cites Marx to capture this dilemma: “The actual wealth of society, and the possibility of constantly expanding its reproduction process, therefore, do not depend upon the duration of surplus labor, but upon its productivity and the more or less copious conditions of production under which it is performed. In fact, the realm of freedom actually begins only where labor which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these wants also increase. Freedom in this field can only consist in socialized man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favorable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with this realm of necessity as its basis. The shortening of the working-day is its basic prerequisite.”
Real freedom necessitates freedom from work if so chosen. He points us to Van Parijs: “in comparison to” “employer subsidies that keep up the pressure on workers to seek employment, “UBI [universal basic income] makes it easier to take a break between two jobs, reduce working time, make room for more training, take up self-employment, or join a cooperative. And with UBI, workers will only take a job if they find it suitably attractive, while employer subsidies make unattractive, low-productivity jobs more economically viable. If the motive in combating unemployment is not some sort of work fetishism–an obsession with keeping everyone busy–but rather a concern to give every person the possibility of taking up gainful employment in which she can find recognition and accomplishment, then the UBI is to be preferred.”
Wealth has to be conceived as something more than the product of human labor or else “we then lose sight of the unearned wealth that is nature’s contribution, which we all share in–and which some own and control more of than others do. If we were to socialize all of nature’s contribution–the land, the natural resources, etc.,–and distribute the value of these equally to all citizens, this is another way to move from capitalist inequality to socialist equality.”
Expanding on this unearned wealth concept we again look to Van Parijs and his principle that jobs should be considered assets to increase the social dividend: “The crucial fact to notice is that, owing to the way in which our economies are organized, the most significant category of assets consists in jobs people are endowed with. Jobs are packages of tasks and benefits. Of course, for jobs to count as assets, they must be in scarce supply. . . . As long as jobs are scarce, those who hold them appropriate a rent which can be legitimately taxed away, so as substantially to boost the legitimate level of basic income.”
People would have a far greater degree of economic security if policies like this were adopted. Conventional prescriptions for unemployment need to be fundamentally altered and enhanced.
Athena:
Sorry but glossed over this and didn't recognize the significance. Don't mean to be pounding on you but you raise such interesting issues.
I have seen the weakness of both systems and I have come to conclude (from a macroscopic assessment) that the weakness of the latter are far more detrimental to society’s growth.
Am presuming here that you meant "economic" growth not societal growth. Your premise is less arguable if you meant "economic" growth, however, one of the problems I have with aggregate numbers as representative of detailed analysis is often the assumption is made that all involved in the make up of the aggregate, benefit equally from the final result.
As for "society's" growth; look around at our various institutions and processes and our populace: do you really see "growth" in most of them?
Other than material consumption, a subject of which you have had much to say and little of it good, as a culture I doubt you could truly say we are growing.
Our education system is failing, for a variety of reasons and teachers are the least of the problem.
Our political system, while never a beacon of enlightenment after the Constitution, continues to appeal to the apathy and ignorance of the public. Could that be because our politicans are just as ignorant?
Our religious institutions may be strengthening but it is much less due to "seeing the light" than in turning to the celestial for answers seemingly beyond mortal men. At the same time this movement is beginning to encumber the secular nature of our political system.
The stock market is certainly volatile and some make millions and some lose millions but the stock market is not a social phenomenon. It is nothing more than a Monopoly game for big money and big players. A few little people gain, simply because they were lucky enough to jump in the right boxcar.
Now no doubt our GDP is continuing to grow, albeit anemically at the moment, but while many see that as an implication of societal growth, it is far from it, and it is not representative of some sort of equal distribution of wealth.
Our health care systems are in shambles. The model seems to be; profits for the insurance companies and punishment for the sick and the health care providers.
I don't really see where you can attest to our growth as a society in recent years unless, again, you limit your growth definition to material consumption.
I, too, often sit in the cheap seats. It's all I can afford.
The outsourcing argument is hilarious.
First, we complain that Terran manufacturing jobs being outsourced to Mars is evil and must be stopped.
Then it becomes a bit more ridiculous when our self-centered, and hypocritical viewpoint make it wrong for American manufacturing jobs to move to China.
Then we are distraught when Ohio jobs move to Kentucky.
Well, if my Northern Virginia job is somehow outsourced to Rockville, MD, I will be the first to grab my pitchfork and demand legislation against such an absurdity.
I mean, who would ever think that an economy could be more efficient by lowering the costs to the consumer?
Get a grip. Production is not the ends, but a means to the end.
So what is the end? Simple. An economy built on the concept of lower costs for consumption, not higher costs of production.
marketeer:
Hear! Hear! Hallelujah!
Tell them economists with their supply and demand crap!
Everyone knows that prices are predicated on costs. The lower the costs the lower the prices.
Executives and shareholders don't care about salaries and bonuses and profits and dividends. All corporate goals are predicated on doing whatever is possible to lower prices and lowering costs is such a good starting point.
When ExxonMobil terminated 8,000 employees over the past few years it wasn't to increase profits but to lower prices and we see those lower prices at the gas pump today. What you say! $4/gallon is lower!? Just think where the price would have been if they hadn't lowered costs.
When Levi Strauss shut down their US plants and shipped jobs overseas to gain much lower labor costs surely the price of a pair of Levi's went down.
In DHL's case, their industry is primarily marketing to other businesses, not the typical consumer as we think of the term consumer. But the good news is that all those other businesses will now enjoy lower costs so they can reduce their prices as well.
The logical extension to this phenomenon is that as costs grow lower across the board, so to will prices and pretty soon everything will be free.
What a novel concept! Only in America!
Marketeer,
Quite brilliant thinking, Marketeer. But what happens when the jobs OUTSOURCED abroad cause lower salaries and wages here to such an extent that there are FEWER buyers for products. In other words, Consumption plumments to below 65% of GDP?
Your strategy is anything goes to destroy the buyers purchasing power to please the GOD of CONSUMPTION who also hates the GOD of SAVINGS and INVESTMENT.. This is a self-destructive formula any idiot would understand except you with your Destructive Capitalism BS. Go back to your cave, please.
Marketeer,
Correction: anyhing goes to lower prices to please the GOD of CONSUMPTION, etc.
Art
Societal growth is an aggregate of many factors. Economic growth, peace, democracy, access to health, access to educational institutions, access to the job market, human rights and many others.
Deficiencies? Plenty. But do the deficiencies cancel out the up-to now contributions and the positive sides? I can not discuss all of the above, so let me concentrate on the most important.
In education I will be the first to admit that many of our high school students are not performing well. Actually in international competitions they used to score at the bottom, (not any more if you see this article) with students from Korea and Singapore scoring at the top.
However, ten years later, the same American students do so much better in life than their Korean counterparts. Fareed Zakaria interviewed the minister of education of Singapore and an honest assessment of both systems surfaced. I have found the article extraordinary.
But tertiary education here is unsurpassed in the world. The American universities conduct the most research than their foreign counterparts, and the system has adopted the open-door policy. The community college is an American innovation. It mainly takes the weak and the less affluent and prepares them for a higher degree. If you drop out, and 50% do, you can always come back. Again, and again and again. Did you drop out of high school and in your thirties you want to go back? GED has come to smooth the process. GED does not exist in many European countries. They ask you to go back and sit in classes.
Let me give you the picture in Germany and Greece. At the age of 15, tests determine if you get into a high school that leads to a university or if you get into a high school that leads to trade school. Change is theoretically possible, in practice impossible. At the age of 15, your future is decided.
One of the main reasons that we moved back to the US was that my son was failing in his studies and acceptance to a Greek university was impossible. Here, he started in a community college, dropped out, went back in, dropped out again, until maturity hit him and now he is graduating in Molecular biology from USF with a 3.9 average. In Greece he would have become a plumber. Or a construction worker. Nothing more. The same in Germany and in many other industrialized countries.
As for the health system, it works fine for those who are insured. Actually we spend more on health than any other industrialized nation. See the Per Capita Health Expenditures by Country, 2007. Within that system the positives are that we enjoy the best technology if we are insured. And, no, the technology used in some cases is not the same here and in Europe. MRIs and C scans come into many models ranging from cheap to expensive and accordingly the accuracy of diagnoses ranges. And when I accompanied my father to a public hospital in London for heart surgery, I talked to patients who had been on a waiting list for over 8 months. This is an important minus in their HNS.
The negatives of our system are the high cost of insurance plus the fact that 50 million Americans are not insured. A huge negative, that I myself call a “disgrace.” Maybe it will be improved under the new administration.
Now, as for the political system, the present administration has caused lots of damage to the perception of American democracy. This will change. Because the same democratic principles that have been violated will go into work to repair the damage and prevent a possible re-occurrence. Our society will not easily allow for the rise of fascism, as European societies have allowed. See the article in the “Economist” Fear of foreigners. Our society has also integrated foreigners far more successfully than European societies have. In France, there was no black newscaster on television before they had the Muslim youth riots three years ago. Not ONE! (Please note that I am comparing, I am not saying it is perfect here). Our society has developed a sense of nationalism that followed the Reformation ideals, those that define a nation in terms of common human rights and not the nationalism springing out of the Romantic era that defined nationalism along the lines of common history, common language, common religion, the dangerous type of nationalism that caused two suicidal world wars and is helping rekindle fascism.
Why should Americans care however? You say, they should concentrate on their own problems. They should, but at the same time, they should become aware of the negatives and positives elsewhere. Because a global approach restores balance in assessments and policies.
As I said, I saw Europe and I saw America. Both beautiful in many ways, both imperfect in many others. But I chose America to move to and live in, because the scale tipped that way. And tipped rather heavily.
My two cents... You have the right to disagree. Allow me to enjoy the same right.
PS. These days I have infrequent access to the net… so I may not respond in a timely manner.
I thought my post made a decent point--decent enough to not hide behind some "Anonymous" alias:
Where do you draw the line as far as what "outsourcing" is; if you are going to label corporate pursuit of "better deals" then what constitutes acceptable forms of outsourcing and what constitutes unacceptable, maybe illegal (as some anti-free market adherents are pushing for) forms? Is it not okay for Levi to ship their jobs to China but perfectly acceptable for Nissan and Toyota to open up plants in the United States?
The answer is that it is all acceptable. Corporate liberty is an important concept to adhere to if we are to ever realize an efficient economic system that we can all truly benefit from.
Anonymous, I hope that sooner or later you will realize the buyer's purchasing power is destroyed only by the fraudulent, centralized (socialist) practice of fractional reserve banking, administered through a central bank. Buying power is not destroyed by allowing businesses to practice good business, that is completely contradictory.
Furthermore, the fact that you cannot see the transparency of your proposed scenerio where "jobs OUTSOURCED abroad cause lower salaries and wages here to such an extent that there are FEWER buyers for products" is a bit disturbing. Real quick, "lower wages and salaries" are what attracted the attention of outsourcers in the first place. Quite frankly, our inflated, overheated economy could use such a return to equilibrium.
Art, "The logical extension" is not at all that "pretty soon everything will be free." That is an exaggerated, illogical strawman argument which I won't even bother with.
marketeer:
My entire response was facetious, thereby intentionally illogical and exaggerated.
It seemed the only appropriate response to such an inane post.
One could be surprised, given the fallacies in your original post, that you decline to address the "logical extension".
I said the ends in an economy is consumption (i.e. a transaction between buyer and seller). Production is not the ends, but simply a means to the previously established ends. (This is one of the huge fallacies of communist doctrine which places priority exclusively on production.)
I did not say that the ends was lower costs. Lower costs are often the byproduct of a business that seeks to gain more consumers, just as production is also a byproduct of that same motivation.
Argue with me, not straw men.
Art posted:
Everyone knows that prices are predicated on costs. The lower the costs the lower the prices.
No. Nikes, Ralph Lauren, Coach handbags and accessories are made in China at lowest cost possible. What do they retail for in the US? Hundreds of dollars, unless you're careful to shop sales or outlet malls.
and whoever stated "Toyota outsourced to America." Did Toyota simply expand their operations to include America? or did Toyota lay off workers in Japan and outsource the workers' jobs to American? There's a difference in what happens to the workers left behind.
When an IT job leaves the United States, is outsourced to India, there is usually no IT job in the United States to take its place. Ask community college job counselors how many applications there are for each position there are. You'll get the view of what outsourcing really means, when each new position attracts 700-800 applications.
The unexplored part about India is that they excel and science and math training, so when we talk about health care funding, we need to know that a radiologist in India probably has training equal to a US medical school, but the salary is only US$12,000 a year, far less than radiologists in the US make. Bet that the American Medical Association isn't ready to have that information easily available. If we have zillions of telephone lines to India, why not ship x-rays there to be read for a nickel a hundred? Medical device manufacturing is also ready for deflation.
Athena,
It's no great news that US Colleges and Universities are the best educational institutions on the average compared to those in other advanced nations ... especially, of course, the big and small IVY schools and institutions like Duke, Stanford, University of Texas, just to name a very few.
Our children went to excellent Dutch elementary schools through the 6th grade. Notwithstanding this, I closed down my consulting business here and we returned to the States in late 70s so our children could learn English and eventually attend US colleges. It was a good decision.
I've written a number of times about the general quality of elementary and high schools in the mature countries of Europe and Asia. Data below shows the top 20 advanced countries surpass by far the US, especially in Science and Math. That´s not a good omen as we compete in the aggressive Knowledge World of the 21st century.
Here are some 2003 test results organized by CESE (Coalition for Excellence in Science and Math Education) for a Test called the International Student Assessment
or PISA TEST.
GRADE 8 `MATH PISA TEST´ 2003: 20 ADVANCED NATIONS
__________________________________
US students came in 20th or bottom of list.
Finland and Holland were in top 4; Canada, Belgium, Switzerland were in top 10.
-----------------------------------
GRADE 8 `PROBLEM SOLVING´ PISA TEST 2003: 20 ADVANCED NATIONS
-----------------------------------
US students came in 20th or bottom of list.
Finland, Canada, Belgium, Switzerland and Holland were in top 11.
-----------------------------------
In both of the above tests (as well as the test below) solutions to problems were only possible with original thinking ... not with rote memorization. Logical processes had to be creatively applied to novel situations, and students had to explain the reasoning behind their solutions.
-----------------------------------
PISA `MATH PISA TEST´ 2003 FOR MOST ADVANCED HIGH SCHOOL STUDENTS FROM TOP 95th Percentile
-----------------------------------
US students scored 19th out of 20 Advanced Nations. The reality was that our best students (95th percentile) did poorly compared to the other advanced countries.
Belgium, Switzerland, Holland, Finland, Canada scored in the top 10.
CONCLUSION:
US students do score better in middle range of top 20 advanced nations on reading and civics but maybe one would expect this.
The data shows a serious US performance deficiency in Math, Science and Problem Solving.
If you have more up-to-date data showing concrete improvements in above areas, I would love to hear about it. Your reference note is slim and vague in this respect and is old data.
It is evident from this and most studies that the European pre-college school systems `on the average´ are superior to US systems. Europe does a relatively better job of educating the bottom 65% of high school and elementary students while the US does a far superior job of stimulating and educating the top 35%. I also know this from experience, having lectured in the European university system and having witnessed our children´s experiences in elementary Dutch schools as well as American high schools and colleges.
On another subject, you intertwine your latest post with more debilitating talk about European integration policies. You return to some wild generalizations again when you make claims directly or indirectly that Europe TODAY is fostering Fascism ... because it´s immigration actions are abetted by nationalistic tendencies rather than the open door, easy integration policies existing in America.
Look. Europe is more than twice as dense as the States with at least 20 vastly different nationalities. It has been integrating a number of new countries into EU membership in recent years ... which allows, for example, Polish people to compete for better paying Dutch jobs. This puts strains on the social systems of all mature European countries so the process is not easy. But well-planned immigration is necessary given the very low birth rates in Europe.
Further, this is a relatively new process for Europe whereas America with its wide, open spaces and one nationalistic culture has been a nation of constant immigration since its founding.
As already stated, there are huge cultural and language differences reflecting the deeply, diverse histories of EU members ... all intensifying the integration complexity to a far more extreme level than that for the US. Are mistakes being made? Are there problems? Of course, probably similar in some ways to the scale of the Mexican immigration problem for the States. But your observations Europe is fostering a kind of Fascism again with its immigration actions is blatant NONSENSE!
Your admiration for the States is no greater than mine, although I´ve spent one-half of my working life here engaged with European companies and educational institutions. On the other hand, (don´t take this personally) but I´ve probably had a much deeper, enduring European experience which has convinced me societies here offer their general population a rather stable, good quality of life existence that competes quite well with what America has to offer.
Europeans constantly are open to learn and absorb the best of our culture while adhering to their basic norms and values. It´s a pity we can never seem to do the same. Canada is a clear example of neighbor doing many things on the social welfare and educational fronts better than the US, but we remain blind to learning anything from their strengths.
In short, American and European societies have their unique qualities. I don´t see either, in an overall sense, as being God´s ideal kingdom of equity and opportunity for all.
As multi-cultural people, we bask in the delights of both the New and Old Continents without prejudice ... so essential for the mind to discover new realities and adventures.
It´s very easy to point to `snippets´ of information from which to make broad generalizations about
anything, but this adds nothing to informed, intelligent discussion.
Friedman’s economic ideology and current policies in America are two worlds apart. It’s delusional to think that they closely resemble each other, as you do.
It’s as ridiculous as saying that I ‘herald his economics’; a faulty interpretation or lie on your behalf. The reason that I suggested that YOU – in particular – may want to read Milton Friedman, is because of your persistent tendency to call him ‘evil’. Before insisting that someone dead was evil, sir, you should get to know his side of the story. Regardless of where he may have been wrong, Milton Friedman was highly educated, had an excellent talent for abstract thought, not to mention significant practical experience in economic affairs. And yes, he was much more brilliant that Naomi Klein, who is doing an educational disservice if her readers walk away with some of your radical views.
But keeping your radical rhetoric aside, the attitude of frustration (which you clearly show) is well warranted in some senses. Medicare and social security are headed for disaster considering the demographic situation; recent energy prices are a reminder of economic vulnerability; the tax on future generations (debt) is lurking in the background; the environment requires serious attention… and many other issues.
I wouldn’t agree that Bear Sterns is one of them, however. Allowing Bear Stearns to be completely destroyed may have resulted in an invitation for investors (who tend to overact sometimes) to react in a manner that may have caused MAJOR DISTRESS in global economic affairs. Should the fed and the parties involved have taken that risk because of some ideological principle? Noooooo… And im glad those in charge didn’t.
aly k
the comment above is addressed to 'whatshisface'
I haven't read every post on this page, so forgive me, but is the above poster implying that someone has suggested that the United States fiscal policy is reflective of Friedman economics?
I hope that is not being suggested anywhere. At its very core, Friedman advocated extremely limited government involvement in the monetary system (particularly as it pertains to the creation of fiat currency). It is clear that his warnings should not have been ignored.
stephen:
You gotta follow the bouncing ball if your going to disagree with posters. Duh!!!
My gracious!
This blog is turning into a real donnybrook! God, I love it!!! ;)
Marketeer,
Not only did ‘whatshisface’ imply that US fiscal policy is reflective of Friedman economics, but he went further, and felt the need to say that according to Naomi Klein, “The American Congress has swallowed Freidman economics and anything goes”. Im hoping ‘whatshisface’ does a bit of homework, so that he unshackle himself of Mrs. Klein’s conclusions, which are motivated by misplaced hate rather than rational-thinking.
An example of this misplaced hate is when she (Klein) states, for example, that Milton Friedman “expended his last energy” (before he died) “thinking about how to take advantage of the people of New Orleans”, after Katrina (http://www.youtube.com/watch?v=Du3mpRkaz8g – at around 6:50). Again, I’m no advocate of Friedman’s ideological positions (for reasons that are too lengthy to get into), but it’s peculiar to witness people finding solace by insulting the INTENTIONS of a dead philosopher, who genuinely aspired for the complete freedom of the individual.
On this libertarian ambition of ‘complete freedom for the individual’ (ie. the less radical version of libertarianism Mr. Friedman held), debate is fair game, as these questions this still ultimately belong in the realm of philosophy. But, when Mrs. Klein talks about a dead guy, and says that the last thing he tried to do on this earth was to extort the vulnerabilities of those who just suffered from Katrina, we are well within our moral right to tell her to express outrage. And so I’d like to speak on behalf of the ghost of Mr. Friedman, and whisper, “suck my dick”, Naomi.
aly k
*
we are well within our moral right to express outrage. And so I’d like to speak on behalf of the ghost of Mr. Friedman, and whisper, “suck my dick”, Naomi.
Convincing the populace that a lack of government oversight is the root cause of our economic woes has been a hallmark of American History.
Each time, it is government meddling in markets that causes the distress in the first place. And yet, each time the American people are easily convinced that government should be handed the reigns and deliver us from the evils of the market.
And this time is no different.
marketeer:
Perhaps you need to rethink your premises. Consumption is not the "end". Growth and profits are the "ends"; consumption is the "means" to attain growth and profits.
If consumption were truly the "end" then you would not be far afield from your posited Communist views of production. Companies would seek to lower prices to maximize consumption. Few companies are interested in increasing consumption of their products if profits cannot be maximized in the process.
The humorous cliche that a company should sell at a loss and make it up in volume is merely a joke.
Shareholders take a dim view of companies who give away profits, and thereby stock price appreciation, by passing lower costs to the consumer via lower prices without some offsetting benefit.
Now before you get your panties in a wad, there are times when competition will force that kind of action. If Fedex and UPS were to lower their prices DHL would have to follow suit or lose market share. Conversely, DHL can't afford to get to aggressive with price reductions or they will create a price war and the giants of the industry will bury them.
There are times and circumstances when a smaller player in a market might attempt to gain market share through pricing strategies but it can be a very dangerous game depending on the relative market strength of key competitors.
Don't know all the ins and outs of the DHL move but my understanding is that the move is predicated on an subcontract like arrangement with UPS. Should DHL become price aggressive and be successful in gaining market share, how long do you think UPS will stand with their agreement?
In net, you asserted in your first post that cutting costs was a good thing because it leads to lower prices. An absurd premise tending to reflect a lack of understanding of basic economics. Cutting costs is a good(?) thing because it leads to increased profits.
The "economy" you speak of is an abstract. It is an accumlulation of the economic activities of a whole slew of economic entities including the government. For that abstract there are no "ends" other than growth. For the pieces, profits get added to growth as an "end".
There is validity to the argument that at some point, reducing costs through labor reductions, can begin to have unintended consequences. If in fact, as is argued in economic circles, competing with cheaper labor requires the higher paid economy to suffer lower labor costs to maintain or gain, then it has to result in less consumption eventually. This, possibly, will drive prices lower due to decreased "demand" not directly due to lower costs.
Durable goods manufacturers may adjust prices to gain competitive advantage but they understand that the nature of their products is such that no matter how low the price consumers of durable goods are not likely to stockpile their products. Utility becomes a modifier; would you buy 10 automobiles simply because they were cheap?
Go back to you Econ 101 textbook and read the next chapter.
marketeer:
Each time, it is government meddling in markets that causes the distress in the first place. And yet, each time the American people are easily convinced that government should be handed the reigns and deliver us from the evils of the market.
Again, brilliant! It was all that government meddling that created the subprime fiasco. The current energy price dilemma was due to all the regulations and restrictions placed on the oil industry.
You cannot seem to grasp that "free market capitalism" knows no moral code. Gain is the only tenet and achieving gain means employing every legitimate and nefarious method available. Lift all government regulations, let the "free market" operate unbridled. You will end up with a revolution. Not a revolution against the government but a revolution spurred by all our less than sophisticated citizens who all bought the same Brooklyn Bridge.
You might try "thinking", it can be an uplifting experience.
marketeer:
I should mention, although it may not be devastating to them, but DHL will probably suffer a loss of some business from Ohio customers because of their actions.
Free market capitalism knows no moral code but sometimes individuals do.
I remember when Airborne started up, I knew some of the owners, and it was common for local firms to try and use Airborne whenever possible because they were a local firm. Were I still in Ohio in my previous capacities, you can bet that I would direct everyone in the firm to avoid using DHL (Airborne) based on their disregard for the economic welfare of one of our communities.
I've been away from it for awhile but the price differentials were not that great and even if they were I would merely instruct employees to plan better and use less air express in total. A good business idea even if DHL had stayed in Wilmington.
Aly K[atl said:
I’d like to speak on behalf of the ghost of Mr. Friedman, and whisper, “suck my dick”, Naomi.
I am sure comments like this make you feel better when you are discussing weighty matters but it makes me wonder whether you want to continue on this subject, free trade, or discuss the merits of sucking Friedman’s appendage or your dick? Regarding the latter, since you have not read Naomi Klein’s book, nor watched her interviews on Democracy Now with Amy Goodman nor seen her with Bill Moyers, and, since she is not here, I’d like to speak on her behalf and tell you how shocked she is that you would bring such a little subject up without so much of an idea of her statements and her research save that you “Heard” someone say this or that? Moreover, if you or Mr. Friedman who was so little would care to explain whether you had a teeny one or a big one, I am sure Naomi, in view of the excitement which raised this topic in the first place, would like to consider the merits if it is worth it at all?
That said, in so short a time that we have been here, you have labeled me and Naomi and fealt it necessary to disregard everything we had to say with whispers and innuendos and not explain why Friedman was brilliant in view of the recent history of George Bush who destroyed all of the underpinnings of the American economic system because Friedman and his devotees believed that Free Trade should have no government rules nor regulations. Why is a system of Markets with no controls better than those with safeguards placed there by Roosevelt and others? Why are ownership of public or state property better in the hands of free marketers than they are held by government as a public trust. Why is Social Security and Health better handled privately? Why national security is better dealt with by private firms than under the control of government. In short, why is Private Ownership better than Public ownership? Is not this what we are talking about when we discuss your “little” man? Isn’t this about the rape of the American people in slow motion rather than about the integrity of the workers of America? Or, are you finished with this subject when you speak on behalf of the ghost of Mr. Friedman.
Marketeer said
Convincing the populace that a lack of government oversight is the root cause of our economic woes has been a hallmark of American History. Each time, it is government meddling in markets that causes the distress in the first place. And yet, each time the American people are easily convinced that government should be handed the reigns and deliver us from the evils of the market.
I thought that what caused the economic woes throughout history were the crooks and cockroaches in the Investment Banking firms with their lobbyists corrupting public officials that were the cause of all the evil and not the government meddling in the markets? Wasn’t Enron a classic Model of what ails government? Isn’t the API also a classic model?
But, Aly K. If you want to discuss “suck my dick” then show it to us first so that we can see if has merit or is of no consequence over and above DHL and the reasons for its disappearance. I’ll bet it is a better discussion that we talk about the pros and cons of Ohio’s labor force than about Friedmen’s or your appendage.
Dr. Reich and Readers,
In 2005, the Economist Intelligence Unit developed a QUALITY-OF-LIFE INDEX for 111 countries. The determinants of quality-of-life linked nine factors including Objective determinants (e.g., GDP per person) and Subjective life-satisfaction factors.
The nine Quality-of-Life factors are described as follows:
1.....Material Well-Being: GDP per person
2.....Health: Life expectancy at birth
3.....Political Stability and Security
4.....Family Life: Divorce rate
5.....Community Life: Church attendance or trade union membership
6.....Climate and Geography: Warmer and colder climates
7.....Job Security: Unemployment rate
8.....Political Freedom: Political and civil liberties
9.....Gender Equality: Ratio of average male and female earnings.
CONCLUSIONS:
I. The top 10% countries were:
Ireland, Switzerland, Norway, Luxembourg, Sweden, Australia, Iceland, Italy, Denmark, Spain, Singapore.
II. Next top 5% countries were:
Finland, United States, Canada, New Zealand, Netherlands.
Most people in different countries reported similar criteria noted above as being important for life satisfaction. Most differences in life satisfaction are explained by differences in objective circumstances, i.e., material well-being as measured by GDP per person.
In this respect, Luxembourg was
1st in GDP per person, the United States 2nd, Norway 3rd, Ireland
4th, and Canada 5th.
Qatar was 6th, Switzerland 7th, Iceland 8th, Singapore 9th, Denmark 10th ... with the Netherlands 15th just behind the UK but ahead of Japan, Belgium, Sweden, Finland, France, Germany, Italy, Spain, Greece.
The US did well in this 2005 survey. However, results may have been rather biased as answers were given at most positive time in explosion of house prices and personal debt at cheap interest rates to maintain standard of living (in face of underlying stagnant wage growth).
It would be interesting to see US results from such a survey if it were taken today!
Art:
Let's keep this very simple. You are confusing matters.
The purpose of an economy (the "end") is the transaction of goods and services. Can we agree on that?
The sole purpose for the existence of an economy is so that I can trade you good A for your good B. And you can trade me your good B for my good A. How does that sound?
I think it sounds flawless. There is no reason that that should become distorted and confused when you throw in money (just a medium of exchange, remember) so that transactions can be made more simply?
With all due respect, your view of "profit" is entirely too narrow-minded. A business seeks this profit--a gain in more of this medium of exchange--only so they, and their constituent parts (CEOs, managers, workers, etc) can ultimately consume more of the goods and services that they desire. Does this sound right? If it does, then how can "profits" be the end? (You also describe "growth" as an end. But growth is just another word for an increased number of transactions).
"Few companies are interested in increasing consumption of their products if profits cannot be aximized in the process." Right on. If there is no incentive of turning a profit (i.e. increasing the consupmtion capabilities of the business entity and its constituent parts) then why lower costs? Lower costs are a competitive tactic, but there is no reason to think that that will eventually lead to free products because that would hamper the business's true ambition, to increase their consumption power (you can throw "profit" in there as a link between the two, but not as the definitive end).
As far as your assistance in proving my point that the citizenry in this country (and most countries) are easily convinced that government must be given more oversight power over the economy, while completely ignoring the fact that it is government meddling itself which has caused such economic distress, I want to thank you, but also you should reflect on your own statement:
You cannot seem to grasp that "free market capitalism" knows no moral code.
I won't even ask you to consider whether or not the billions of dollars in oil subsidies (i.e. government intervention) over the last few decades constitutes a "free market." It doesn't even matter whether or not you consider it a "free market" practice to, upon their creation (because, after all, "every American should own a home"), implicitly declare Freddie and Fannie suitable for government/taxpayer bailout. No, for the moment I don't care if you are or are not aware that our banking system as a whole does not at all represent a "free market system." It doesn't matter. Instead we should start from the beginning. So, let's answer a few very simple questions:
1. Is a "free market" one with sound money? Of course. I hope you can see this.
2. Does our system engage in sound money practices? Absolutely not.
3. Is the "free market" to blame? No. How can we blame the free market? We have not even come close to adhering to "free market" principles. Can I pinpoint Michael Phelps's success in the Olympics on notion that he is black, and that black people are more athletic than white people? I could, but it would be a terrible observation.
P.S. I hope you decide to refrain from using childish sandbox banter.
Make your point and get on with it.
whatshisface said:
I thought that what caused the economic woes throughout history were the crooks and cockroaches in the Investment Banking firms with their lobbyists corrupting public officials that were the cause of all the evil and not the government meddling in the markets?
You just answered your own question.
marketeer,
Each time, it is government meddling in markets that causes the distress in the first place. And yet, each time the American people are easily convinced that government should be handed the reigns and deliver us from the evils of the market.
Is the "free market" to blame? No. How can we blame the free market? We have not even come close to adhering to "free market" principles.
If free market principles are unrealized, what proof do you have that they wouldn’t cause even more distress than your government meddling assertion?
In all of this, don't forget the hard work of Dick Armey, John McCain and friends to subsidize the flight of jobs out of the US.
Dick felt that it was a burden for corporations to cut costs by moving out of the country, so he created subsidy programs to pay corporations to leave the country.
Some might argue that the government subsidized flight of jobs is part of the free market economy, but I don't believe this should be the role of government.
Even Dick Armey agreed. As he was signing off on his legislation he laughed that his constituents were probably going to be mad at him.
When tens of thousands of tech workers lost their jobs in North Texas, many do to the bust of the tech market, and many to outsourcing, Dick Armey promptly moved from Texas to Hawaii.
anonymousanonymous,
Your question is a great one. I encourage anyone interested in the beauty of true free-market economics to research Austrian economic theory.
In short, episodes of the boom-bust cycle that manifests itself in the familiar cases like the dot.com and housing bubbles are not only a result of unsound money and centralized, non-free market policy. It's also valuable to view them as a microcosm of a "human civilization bubble," that will burst sooner or later.
Because our existence has become dependent on false wealth (paper money printed from thin air), mal-investment has run rampant. Our medium of exchange does not represent anything of true value that can be traced inevitably to a production of resources. Instead, we have essentially accelerated resource production through the issuance of credit.
This has led to all kinds of problems. Among others, an unsustainable population boom, overuse of our ever-diminishing arable land, and devastating effects on our nitrogen-based atmosphere. These are all bubbles that would never have inflated if the state had not detached our concept of wealth from the underlying,legitimate form of wealth: natural, finite resources.
There are some interesting discussions here today.
As a member of this flawed species, it seems to me that much of the argument comes from arguing over means to accomplish unnamed goals.
Marketeer seems to have addressed this, and I guess discussing the meaning of it all is less sexy than arguing over how to accomplish undefined goals.
I rather like the question of, what is the economy for? It reminds me of the Fisher King question, "Whom does the Grail serve?"
Several folks here have argued that worker's rights, fair pay, benefits etc... is an evil and a sin, unless that worker is in the royalty class and then we should see Golden Parachutes for doing a crappy job as a burden, not a perk.
Others ask, what is the point of having an economy if it doesn't benefit the common man and reward him for his work. And when that man is injured, or his job taken away by greed or ill fortune, why shouldn't society provide a safety net and help him become productive again?
The first argument creates a small class of royalty for which no extravagance is too great. While placing zero value on everyone else. Their value being based solely on their ability to work at the moment. so if the worker is injured, that worker becomes a liability. Perhaps that worker should be put down?
Some might argue that execs are just another form of worker bee, and the real point to the universe is to create magnetic patterns on banking hard drives that represent ever growing numbers. That we are all disposable tools, created as slaves to keep these numbers on magnetic media growing.
And yes, I am engaging in some hyperbole. But aren't these the logical extensions of these arguments? In the face of ever increasing profits and the sheer magnitude of the numbers, we as individuals are essentially worthless tools that can be replaced, or dispensed with, with no real impact on the growth of the God of Fiat Currency. The beast will grow with or without each of us. So ultimately, we have no value as human beings.
This argument is one that I do not like, but it does represent the world we live in. I'd prefer a world in which the common good was more important than the exaltation of profit hoarding.
But as a few have pointed out, that's communist talk.
So is that all we are. Just tools to serve the growth of money, and we have no other value? Is this really the best we can do?
I believe it is. It is our nature to think ourselves as worthless piles of feces, unless we can decorate our existence with magnetic patterns in a bank's computers. I believe it is our animal nature, made evident and elevated by our unbridled skill at rationalizing our instinctual drives into needs.
We're incapable of even rationally viewing our behavior without being driven to stake out our territory, peeing on the boundaries and declaring that what we want is more important than a rational examination of our needs.
And from animal perspective, doesn't it make sense? Is it no wonder that talk of social and economic order that benefits all men, through cooperation means that some who have so much that it harms the common good will be threatened?
And it doesn't even need to be the case that anyone loses anything. An irrational fear of loss is enough to close the mind and illicit a fight or flight response.
Those of you that believe that the only way you can win, is to make someone else lose, are going to keep winning. We're at the apex of civilization. There is no new magical energy source waiting in the wings to save us. Oil and energy in general from now on will be produced in ever smaller quantities, as civilization tries to grow beyond supply.
In all the previous eras in which civilizations declined, leaders tended to make an endless serious of bad decisions out of denial, in an attempt to feed endless growth on a declining resource supply.
There is no reason to believe we'll act rationally now.
But we will rationalize what we do!
Marketeer,
That's a long string of plausible logical statements but still nothing that can prove either of your original remarks. Why should anyone believe Austrian economics is anything more than a belief system and unverifiable?
I thought I had answered, sorry.
My usage of the word "distress" as it pertains to the economy was in reference to what we are experiencing right now, or more broadly, what is always experienced during the "bust" part of the boom-bust cycle.
Because Austrian economics gives no merit to the practice of fractional-reserve banking (i.e. creating money from thin-air, the way we do today) there is no boom-bust cycle at all. Without the existence of illusory "wealth," money would take on the role it is meant to fulfill, a medium of exchange.
The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers' stone to make it last.
LUDWIG VON MISES
Fiat monetary systems based on borrowing and interest repayments by nature, require infinite growth.
The money supply must continually grow so that principal can be repaid with interest. If the money supply does not grow fast enough or ceases to grow, defaults will occur.
Infinite monetary growth is only meaningful if you have infinite resource growth.
This was the basis of Athena's argument about a flat planet. Friedman's argument was that resources can be infinitely recycled, into ever higher quality and higher quantity resources.
This argument violates the Laws of Thermodynamics. It is at complete odds to reality as we understand it.
Infinite resources, implies infinite energy. Recycling infinite resources requires the input of infinite energy.
Even if we busted free from the Laws of Thermodynamics as we understand them, we can't consume and release infinite energy on a finite planet. We'd be vaporized into quantum particles as a we rip a hole in the space time continuum.
So the theory of the flat Earth is a myth.
But it works so long as the consumption of resources can be increased. Just like you can believe that an automobile can reach infinite speeds, as you accelerate 10mp, 20mph, 30mph... Then you reach limits and find that your auto can't reach infinite speeds.
And so for the last couple of centuries, we've been working our way through ever higher quality energy sources. This has powered growth in every aspect of our lives.
Many people who still don't understand science discovered a scant two centuries ago, see the world as a magical place of boundless resources and where infinite growth is not only possible, but our birthright. Thomas Friedman is one of these people.
So long as we had energy growth, we had resource growth. So long as we had resource growth, the money supply could be increased to compensate. We began to believe that money powers the world, and not energy. So as energy production is flattening, our policy makers keep adding to the money supply, to spur economic growth that requires an ever increasing fuel supply.
As a result, an ever increasing quantity of money, chases a fixed basket of goods and services.
A point not well understand, is that not only does a growing civilization need an ever increasing pool of energy to draw on, but it must draw on that energy at an ever increasing rate.
And if the current geologists are wrong and there is are several super giant high quality oil fields left somewhere, this only puts off the day of reckoning. And when that day comes, everyone will be scream to drill more, drill faster. Just like now.
If we can get production back to 3% growth again, then the economists like Friedman will declare victory and proclaim once again that we can consume infinite mass and release infinite energy on a finite planet. Until next time.
So fiat money doesn't work in the long run. Debt based economics must fail. And worse, the mantra and faith in infinite growth insures that we exhaust our resources at the maximum rate, guaranteeing the hardest crash possible.
Wikipedia {The main criticism of modern Austrian economics is its lack of scientific precision. Austrian theories are not formulated in formal mathematical form, but using verbal logic. Mainstream economists believe that this makes Austrian theories too imprecisely defined to be clearly used to explain or predict real world events. This criticism of the Austrian school is related to its rejection of the use of the scientific method and empirical testing in social sciences in favor of self-evident axioms and logical reasoning.[2][3] The Nobel prize winning economist Paul Samuelson wrote that, "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]."[11])
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Weaseldog
You misread me. The flat world I was referring to, is a book by Thomas Friedman, the NYT colummnist and the term was referring to the forces of globalization that that have knocked down national barriers.
Someone also mentioned about the outsourced IT jobs to India and how they were a pure loss to the US. Friedman, in the same book, says he visited a large call center in India supporting US clients, and got upset when he realized the loss of US jobs. Then, the boss gave him the grand tour and he saw that the center along with many other centers were supported by US exported technology. So, -he says- they sat down and calculated what had been lost and what had been gained. For every dollar that was leaving the US, 1.14 was coming back.
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Athena,
And with your last innocuous clarifying remark you have broken through the Austrian
economics Doomsday theories being bandied about here in a useless pile of posts. The breakthrough realization is that mankind will inevitably Innovate to maintain its survival on this planet next 50years and next 100 years. After that, a new wave of Innovation will meet the challenges to insure useful existence. It often takes crisis situations to rise to the technology solutions needed to balance resource pressures, pollution, scaricites, wars ... whatever form the crisises take.
So can not recent posters come down to constructive, balanced solutions to Real problems facing our nation today posed so well in Dr. Reich's essays ... most of these problems which, I admit, are self-inflicted consistent with the ageless weaknesses of the human species constantly in battle with its progressive genius struggling usually successfully to come eventually to its enlightened senses on new equilibriums/innovation offering more decades of mastery of a threatened existence. Doomsdayers make for good entertainment... nothing more.
Paul Samuelson also said, "There are no separate methodological problems that face the social scientist different in kind from those that face any other scientist."
If the interactions of human beings were no different from that of molecules, atoms and electrons, then I would find it perfectly acceptable to build an empirically based mathematical model to describe an economy. It would make sense to manipulate inputs for a desired output.
But the world does not work that way. A forced input into such a [Samuelson] model does not necessarily represent a desirable relationship in the real world.
I would much prefer the methods of Adam Smith, whose a priori approach revolutionized the way we think about economic interactions between human beings. Or how about Carl Menger, whose Action Axiom is a self-referential, entirely a priori proposition that nobody would dare refute.
Don't let wikipedia's "Criticism Of" section deter you. Seek out the Austrians for yourself.
marketeer,
But the world does not work that way. A forced input into such a [Samuelson] model does not necessarily represent a desirable relationship in the real world.
I would much prefer the methods of Adam Smith, whose a priori approach revolutionized the way we think about economic interactions between human beings.
Ok I see it more clearly now. It's the way you want it and not necessarily the way it is or the way others may want it. At least you acknowledge you're proposing a belief system and nothing more. We're still left with the problem of you proving how intervention causes "distress" and your belief system mitigates this. Just saying that it's so doesn't cut it.
Watch yourself. John Smith did not at all propose a substandard and subjective "belief system." That's completely degrading to the valuable thought he provided us with.
I was using John Smith to point out the fact that a priori approaches to economics is not at all inferior to empirical methods. In my experience it has been quite the opposite, in fact. John Smith is a perfect example of this.
One of my previous posts handles the "proof" of why a free market would cause less "economic distress," (at least in the meaning of the term as I originally chose to use it, and was subsequently questioned about it.) I am not going to repeat my arguments, they are there to read for yourself if you like.
Lies by ‘whatshisface’ (ironically they can all be found on this page)
• Mr. ‘whatshisface’ claims that I haven’t seen Naomi Klein interviews Truth: I’ve seen two. One was on democracy now with Alan Greenspan, of which I walked away jealous that a goof got the opportunity to converse with Mr. Greenspan, while I was stuck at home playing video games. The second was a “Shock Doctrine” lecture on youtube. She degraded the memory of Milton Friedman in it, hence my appropriate ‘suck my dick’ response
• Mr. ‘whatshisface’ claims that I ‘herald’ Friedman’s economics. Truth: ‘whatshisface’ simply pulled this accusation out of his ass
• ‘sunamis that hit Burma and India’ were ‘not accidental’
• Bush ‘orchestrated’ Katrina
• WTC was a conspiracy
• ‘The American Congress has swallowed Freidman economics and anything goes’
• ‘There is a flip side to this according to her [Naomi Klein]. Economic Disaster is the real target [of congress].’
• ‘I have Friedman's books and I understand vaguely his line of capitalism even if he talks in riddles. I don't like anything about him and I think he was absolutely evil.’
• ‘The Friedman doctrine allows for disasters and encourages them’
• ‘I don’t believe that Friedman had anything to offer. His theory of Free Trade was a gimmick to do by stealth what traditionalist have done by war…namely, to seize slaves for their industries. I think all Republicans want a free ride and are basically dishonest and evil.’
• ‘His [Obama’s] utterances have proven that he will do no different than what George Bush did. It's Lima today. Philadelphia tomorrow. No city is safe. No job is safe.’
‘whatshisface’, accuses me of ‘labeling’ him. The above clearly proves that HE is responsible for labeling himself.
For those of you curious, this is Milton Friedman’s ideology as I (aly k) understand it in a nutshell (http://www.hoover.org/multimedia/uk/3411401.html) . This is Milton Friedman’s ideology according to ‘whatshisface’ (http://www.youtube.com/watch?v=POuE1HPvQp0)
Lastly, one of the important questions ‘whatshisface’ asks me is ‘In short, why is Private Ownership better than Public ownership?’. I’d love to answer this question, but first, there is an implicit assumption in it that ‘whatshisface’ doesn’t have the knowledge to make. Second, I fail to see how it’s relevant to ‘whatshisface’. According to him, Obama has ‘proven that he will do no different than what George Bush did’. And because George Bush ‘destroyed all of the underpinnings of the American economic system’, I can’t figure out why ‘whatshisface’ is concerned with this question. After all, we can be sure that he’s not a theorist…
aly k
marketeer,
Your presentation is tautological and circular making it useless. Nothing you've said remotely corroborates your original posts.
Lies by ‘whatshisface’ (ironically they can all be found on this page)
Aly K
You do know the difference between Lies and mistruths, and opinions, and calculated guesses? When you use terms like this, you really do discredit yourself. And when you say “They can all be found on this page”. Do you mean that the list below are all lies?
Mr. ‘whatshisface’ claims that I haven’t seen Naomi Klein interviews Truth: I’ve seen two. One was on democracy now with Alan Greenspan, of which I walked away jealous that a goof got the opportunity to converse with Mr. Greenspan, while I was stuck at home playing video games. The second was a “Shock Doctrine” lecture on youtube. She degraded the memory of Milton Friedman in it, hence my appropriate ‘suck my dick’response.
Was it not you that said you had not read his book and…?
Mr. ‘whatshisface’ claims that I ‘herald’ Friedman’s economics. Truth: ‘whatshisface’ simply pulled this accusation out of his ass.
I suppose when you give the appearance of kissing some author’s rear end and claiming that he was brilliant, and that I should read him…that is not a recommendation and that does not invite us to share in the knowledge of a great economic professor? That you tell us that in memory, Naomi Klein should suck a dick? Are you just playing semantical games to avoid the sense of your positions?
‘sunamis that hit Burma and India’ were ‘not accidental’
That is my belief? How is it a lie?
Bush ‘orchestrated’ Katrina
Yes! He claimed that he did not know that Katrina was going to strike. He refused to help for the first five days later claiming that neither the governor nor the Mayors asked for his help. Nightline, with Ted Koppel, also documented troops turning away people who rushed to aid everyone. He sat back while the disaster became really critical. He used FEMA and Homeland Security to seal off the cities and if you ask Ted Koppel what he thinks and thousands of other people what they think, they would all blame Bush. Oh! But he could never never do this and anyone like me is a bold faced liar? Or just a plane liar? Is that what you are saying, aly k. That anyone who disagrees with your story line is a liar?
WTC was a conspiracy
I wonder how many hits you would get if you googled WTC and conspiracy? Would it be 1000, 10,000, 1,000,000 or 50 million hits? There are lots of people out there who think Bush and Israel dropped those towers. Ask Barbara Walters what she thinks. But you would rather announce this assumpion of mine as a lie? Is that it Aly K
‘The American Congress has swallowed Freidman economics and anything goes’
Is this a lie? If so please explain?
‘There is a flip side to this according to her [Naomi Klein]. Economic Disaster is the real target [of congress].
Aly K? Don’t you agree? And if not, why not. Moreover, why is this a lie?
Are you living in America, Aly K or somewhere in the middle east?
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anonymous (funny that you continue to mask yourself),
I have explained myself. Care to do the same?
edit: unacceptable grammar error
marketeer,
Your presence here hasn’t been a complete failure; you’ve provided good insight into why the Austrian school has been so thoroughly rejected by mainstream economics. We thank you for that contribution.
Any bets on who the good people of Lima, Ohio will vote for?
aly k:
Not that I'm surprised but can you not play nice with anyone? Sometimes it appears you are "disingenuous". ;)
Athena, I stated that your Flat Earth comment was in reference to Thomas Friedman. I'm familiar with his book.
We can't conjure matter and energy into existence using innovation or any other form of black magic.
The energy has to come from somewhere. Friedman argues that innovation will create the energy.
But to create energy from nothing, the fundamental laws of the universe have to be done away with.
Now if you can wish barrels of oil or gasoline into existence with the power of thought, and demonstrate this ability on demand, I'll be happy to rethink my understanding of how the universe works.
marketeer:
I might be inclined to tone down the "sandbox" banter if you were less condescending in posting your assumed superior intellect.
Meanwhile I apologize if I confused you. It turned out to be easier than I had thought.
On the chance that we may be dealing with a semantic argument here I am dealing with the definition of "consumption" as it is used in GDP related calculations.
Example 1) My company sets a goal (an end) of increasing profits this year by 10%. I have options for the means to achieve that end. I can try and cut costs but it may be difficult to cut enough costs to achieve my end so I focus on increasing my sales, through advertising, promotion, trade discounts for volume buys, etc. I decide that the best means to achieve my ends is to drive greater consumption of my products.
Example 2) I achieved my goal (end) and now have additional cash - far more than just another medium of exchange due to its flexibility of use and its universal acceptance - so I now peruse options for that excess cash. I can buy greater quantities of materials (consumption) to gain better pricing; I can update my equipment to improve productivity (investment, not consumption); or I can buy stocks or bonds or put it in an interest bearing bank account (all savings, not consumption) until I make a final decision.
Now you will argue that eventually I will use that cash for more "consumption". Maybe, but maybe not. Let's say I am an extremely proud alumnus of a university and I decide that I want to amass a significant sum to provide an endowment to that university. That endowment is designed to secure the principal and provide scholarships or project funding from the annual earnings. The endowment principal lives on in perpetuity and never is "consumed".
This same scenario can be applied to an individual merely trading his labor for wages. For an individual the goal (end) may be to gain higher wages to "consume" more stuff; the "end" might be to accumulate more savings as a reserve against my retirement years. I might have to "consume" that savings during my retirement years due to unforseen circumstances but if I don't have to I might set up a trust for my children allowing them the income from the trust but leaving the principal untouched. If my intention is to never dip into my savings if I don't have to then it cannot be concluded that "consumption" was my ultimate goal (end).
My guess is that you are using an obscure, theoretical definition of "consumption", more akin to "spending". If that be the case, communication is better served, to say nothing of debate, if you choose words that better suggest your point. In the real world theory often only represents a modicum of possibility.
Economic ventures and activities are entered into to acquire greater wealth. To businesses more wealth is gained through higher profits; to individuals through higher wages and wise investments (savings, not consumption). These are the "ends" we wish to achieve. More "consumption" may be practiced as each moves toward the ultimate goal but greater wealth remains the primary "end" sought.
No one enters the realm of economic activity from the business side with a goal (end) of simply creating more transactions. Transactions, as "consumption", are simply a "means" to an "end".
If I were better at computer graphics I would draw you a picture.
(You also describe "growth" as an end. But growth is just another word for an increased number of transactions).
If the market is such that I can raise prices without affecting demand I can achieve "profit growth" with no increase in transactions. If I can significantly reduce costs, increasing profits, I can decrease the number of transactions. "Growth", be it in profits or stock appreciation or a variety of other actions, increases value, which increases wealth, which increases options.
My guess is that your whole argument would be better supported by suggesting that the "economy" exists to "satisfy utility". "Utility" takes on all shapes and sizes.
I have already admitted that my "free" statement was facetious. That you want to continue to exploit it as valid argument only adds to the insufficiency of your argument.
It is customary when presenting logical argument to avoid nitpicky, minimalist premises. Nowhere in the world do we find governments practicing any pure "isms". In America, we come closer to "laissez-faire free market capitalism" than anywhere else I'm aware of. The fact that it is not "pure" is of little consequence when evaluating the effects the process has had.
Only an idiot would view our current system and suggest that if we only took government and associated controllers out of the equation that a "pure free market" would strive to achieve the benefit and welfare of all the populace. There is validity that in any economic dilemma the market will eventually correct and get back on track. To a great extent this is actually what happens. The problem is in timing. The "market", because it is dealing with assumptions of behavior, will generally take a long time to correct a recession or debilitating inflation. No one is anxious to jump back in the pool when they are not certain the sharks are all gone.
Governments and quasi-government agencies exert controls to attempt to avoid economic hiccups or to limit their duration. Being comprised of humans, also acting on perceptions, they may overkill and thus exacerbate the situation. They may be slow to react or avoid reaction (see the Fed and the Great Depression) also exacerbating the dilemma. This does not substantiate the premise that we would be better off without intervention but merely that the methodologies need improvement.
If you truly think that removing all the reins from the "free market" will result in Valhalla, can I talk to you about this bridge I own in Brooklyn?
I state again, a "free market" knows no moral code. In fact the only value that drives the 'free market" is greed and greed is considered immoral. The ultimate goal of any "free market" participant is wealth accumulation. Acquiring greater wealth surely brings more "consumption" power but also buys more influence and control. In a free wheeling, "free market", unregulated and uncontrolled, we will segue to even more of a survival of the fittest scenario than we see today. We will be on course to making "Rollerball" a reality.
Not sure what your Michael Phelps analogy is all about but that observation would not only be terrible but completely wrong since Mr. Phelps is not black.
weaseldog:
Am terribly upset that you are discounting the existence of "mind over matter". We have all those universal laws only so that our minds can figure out ways around them.
Years ago I read an article on why some people die of heart attacks while asleep. The conclusion was that dreams, scary or physically taxing ones, caused the brain to increase the release of Adrenalin and combined with the fear or excitement lead to a heart attack. The explanation was that the mind, in certain states, cannot discern the difference between fantasy and reality.
Given that, and it only intensified my belief in the power of the mind, I concluded that I should be able to sit in my recliner, enter some transcendental state, and envision myself running 5 miles a day. My mind would react and I would become fit and lose weight just sitting in my recliner.
I am still working on it. Not a lot of results yet other than I seem to be getting a lot of rest.
If I can be successful can oil generation be far behind?
Relaying my theory, someone once suggested to me, "You just keep thinkin Butch".
I thought we had a Market Valhalla?
Corporations compete and try to kill each other all day.
The government bails them out and throws a big party for them.
The next day, everyone wakes up with a hangover and starts over.
weaseldog:
Hell, is that why my head hurts?
Athena:
Congrats for your son's success. Maturity seems especially troublesome for we males. I'm still working on it.
I would never consider disallowing you the right to disagree. I would even fight to the death to provide you that right. My province is merely to point out the flaws in your disagreement. ;)
I am tempted to ask, once again, given your delineation of societal growth criteria, where do you see significant improvements in the US?
Other than economic growth, inuring more and more to only a select few, there are serious deficiencies in many of the other categories.
From a comparative standpoint you have advantages and disadvantages over me. You are familiar with a variety of cultures, I, but one; advantage Athena. On the other hand I have lived in the US for 67 years and have learned of and experienced some of the the promise that our founding fathers and their heirs intended for our nation; advantage me.
It is my theory, one would only wish that more time had been devoted to learning, that a great deal of the cultural differences between Europe and the US lies in their cultural histories. Though in many respects similar, there are significant differences.
Europe evolved from a history of monarchies; from landed gentry and feudal systems. To some extent a definitive class system. As I recall it, the masses were quite used to being protected, and sometimes, cared for by the exalted few. Is it surprising that that model, no doubt with drastic changes, would cling to remnants of that history? Through revolutions and social advances the plights of the masses were tantamount, securing freedoms and equality, to some extent mimicking the history of the US. But there seeped through an understanding that there will always be those less fortunate and as in the days of yore they will need more help than others.
The US on the other hand does not reflect that same history. Granted many of the original settlers emigrated from that same history but most of them were social or religious misfits who didn't fit the European culture of the times. They came to America in search of freedoms not found in the leading European countries of the time.
Many were rugged individualists. They were accustomed to swimming upstream and America afforded them a new start with fewer people and impediments in the stream. Although at the outset we were controlled by a monarchy, multiples, those ruling monarchies were ruling in absentia. We had governors and armies but no real landed gentry nor Lords or Knights; no Royalty on our shores. The segmentation of our culture was minimal compared to Europe.
Now most of those misfits sought the same thing as their European counterparts. The freedom to govern themselves and to acquire the wealth that seemed locked up by European royalty in their home countries. The foundation for wealth in those days was land and America was a vast wasteland of unoccupied land. All that was required was to take it from the Indians, those savages who were far more welcoming to these immigrant interlopers than is our society today. If you read our history carefully you will find that once we established our nation we never readily accepted the infiltration of other ethnic groups. The Italians, the Irish, the Polish, and especially the Asians were brutalized and allowed only menial employment for years. To their credit they persevered and the American cultural values eventually allowed them equality as well, but it was a long, hard struggle for many of them for years.
Historically we have much to be proud of but with many stains for which we should feel nothing but shame. Especially since the resistance to immigrants didn't come from a ruling class but from just the regular citizenry. Our hallowed Constitution, coming on the heels of our ethereal Declaration of Independence, allowed for slaves to be only 3/5 a person and at that only for population voting criteria.
Since we started from an individualist standpoint we evolved that way. We banded together as communities sometimes to advance community goals but most often only to fight common enemies. Ironically, many individuals sought wealth and power, seemingly copying that heritage they so strongly condemned. As I recall, de Tocqueville was astounded at our thirst for wealth. I believe he also wasn't enamored with our democracy being devoid of a ruling class. Old habits die hard.
The leaders of our founding fathers were very learned men. Some by formal education others through reading and experience. Most of them were steeped in the humanities and derived many of their ideas for governing and social structure from historical philosophic thought. These leanings likely lead to the early establishment of colleges and schools of higher learning. Their's was a world of intellect and thought not so much vested in personal gain and wealth.
On that foundation, institutions of higher learning abounded. I would guess far in excess of Europe. My understanding is that literacy rates in much of Europe, especially Great Britain, were fairly high early in the 19th century though. Realize that I am winging it here, somewhat, because in my day, when studying American History, we often got bogged down in George Washington, cherry trees and telling the truth.
In the early 1800s we established the concept of free education, via a public system. I think at the start it may have been only for 8 years, the volume of facts to be learned was much less then. Later it expanded to 4 years of high school. That was still in the 1800s I believe. We are now over a century later and as a society we have replaced the bar for a reasonable chance of economic survival from a bare minimum of a high school degree to a bare minimum of a college undergraduate degree. We have not, however, included in that paradigm, the need for expanding the "free" concept to college education. True to American values we have established a few scholarships but most importantly we have made student loans plentiful. Initially these were available at very favorable rates but of course that interfered with the private marketplace so we raised the bar once again. Now we have many, most from poor or middle class families, graduating from college, as undergraduates, with a $20 or $30 or $40,000 monkey on their back as they enter the wonderful world of adult existence. The chance for some degree of success in life, forces many students to take this route.
To me, this is not a hallmark of a progressive nation focused on the "general welfare".
No doubt our higher education institutions have continued to gain in stature and product delivery but they have become nothing more than economic entities not dissimilar from any other commercial enterprise. As such, raising prices is a must and the dance continues.
I am astounded to learn of the restrictions on European kids in attaining at least a high school education. We have heard stories of this in Asian countries but it always seemed merely a catch up methodology for overcoming a basically illiterate society.
We are entering a panic state in our primary/secondary education process. Overall the education may still be good but the costs of maintenance are becoming exhorbitant with a great deal of waste. We aspire to the best international test scores because that is the American way; we should always be first. To your points, there may be more important issues than test scores to ultimate success.
One would have to guess that our individualist nature affords greater success with lower test performances because we are taught to strive, to compete, continually. Community/societal mores in other cultures perhaps squelch that kind of personal ambition.
I was surprised at two comments from your links. How we rank higher than most in civics is beyond me. Many high schools have dropped civics from the curriculum. If you listen to some of the "man on the street" interviews, not statistically significant I know, the knowledge of our history and our government structure is abhorrent. Even in everyday conversations it is amazing how little people seem to know about how our country operates.
This aura is not helped by our politicians. The current hullabaloo about the president calling Congress back into session is a perfect example. Now the Constitution provides for this in Extraordinary circumstances but I doubt that our founders would accept that passing legislation for offshore drilling, a completely meaningless exercise given the necessity for compliance by the states, attains the level of Extraordinary. A great number of American folks will come away from this feeling that the President can, under any circumstances, exercise this prerogative.
The other comment I have a hard time accepting was regarding the issue of American students excelling at problem solving. It was my understanding that this is one of the beefs of businessmen that our education systems don't teach problem solving skills, at least not sufficiently.
As to health care: does it do a lot of good to have the best equipment and the best doctors when you can't afford treatment or if you need it it will bankrupt you? I doubt there is a perfect answer out there but ours is clearly not the best option. Again, it is the American way to develop the best available. That doesn't mean we copy Canada's or England's or France's or anyone else's. We can cherrypick the best of each and add an American touch and we should be able to come up with the best going. Some of our politicians want to nip the idea in the bud. They preach the gospel that competition is the only process that creates the best of anything.
Politics? One can only marvel and appreciate your innocence in staunchly believing that the ship of state can be easily reversed. A Democratic presidency with a strongly Democratic Congress will be successful in attacking some issues but our democracy is built on giving strong consideration to the minority views. If the Senate is not filibuster proof you will become more familiar with those minority views than you ever desired. Reagan, riding in on a huge popular victory was able to make unbelievable transitions, much to our dismay. The current political enviornment and economic issues are such that I don't believe Obama, even riding in on a similar wave, will be able to turn the ship around in the same manner. The problems have grown exponentially and besides agreement he will also need time and his opponents will be hell bent to dwindle away that time. All the while they will be building the case against him for the next election.
While I abhor fascism or communism or absolute socialism, one could argue that what is a democracy if different views cannot find a voice. If we don't find solutions for the betterment of all of our people those kinds of voices will find a growing group of listeners.
Is America the best place in the world to live? Probably. Does that mean we can sit on our laurels and avoid seeking better answers from others? We can, but that's foolish. Arrogance can and has lead to great things. Ignorant arrogance denies progress and disallows the quest for better solutions by evaluating all possibilities.
Jesus I can go on and on.
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The problem with your example is that shifting packages on a conveyer belt is not exactly a recipe for sustainable economic development. Local communities need to think more about investment in education and innovation if they want to compete in today's economy.
Convenient to leave out the fact that DHL has consistently lost money on its North American business. A lot of money: $900 million in 2007 and an expected $1 billion in 2008.
But it should keep those jobs instead making profitable business decisions, right?
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Praise be to Al Idrisi.
Sorry I am ignorant and uneducated about such things, but will the PUBLISHED national debt (the limit of which was just raised to 10.6 Billion by our legislators and president) show the increase of 25-Billion of new debt on the day when the Federal Reserve spends our citizen's tax dollars (without our input) on a Fannie/Freddie bail-out?, or will this be another "off budget" hidden fact?
And by the way, why do we call this a democracy?
jim:
We voted our congress to make the decisions for us. If we don't like it, we can always vote them out.
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