Tuesday, November 29, 2011

An Essay From Robert Reich


Restore the Basic Bargain


MONDAY, NOVEMBER 28, 2011
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.
That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.
Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”
But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.
That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.
The basic bargain is over – not only at Ford but all over the American economy.
New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.
Meanwhile, corporate profits now constitute the largest share of the economy since 1929.
1929, by the way, was the year of the Great Crash that ushered in the Great Depression.
In the years leading up to the Great Crash, most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929 the debt bubble popped.
Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.
The latest data on corporate profits and wages show we haven’t learned the essential lesson of the two big economic crashes of the last seventy-five years: When the economy becomes too lopsided – disproportionately benefitting corporate owners and top executives rather than average workers – it tips over.
In other words, we’re in trouble because the basic bargain has been broken.
Yet incredibly, some politicians think the best way to restart the nation’s job engine is to make corporations even more profitable and the rich even richer – reducing corporate taxes; cutting back on regulations protecting public health, worker safety, the environment, and small investors; and slashing taxes on the very rich.
These same politicians think average workers should have even less money in their pockets. They don’t want to extend the payroll tax cut or unemployment benefits. And they want to make it harder for workers to form unions.
These politicians have reality upside down.
Corporations don’t need more money. They have so much money right now they don’t even know what to do with all of it. They’re even buying back their own shares of stock. This is a bonanza for CEOs whose pay is tied to stock prices and it increases the wealth of other shareholders. But it doesn’t create a single new job and it doesn’t raise the wages of a single employee.
Nor do the wealthiest Americans need more money. The top 1 percent is already taking in more than 20 percent of total income — the highest since the 1920s.
American businesses, including small-business owners, have no incentive to create new jobs because consumers (whose spending accounts for about 70 percent of the American economy) aren’t spending enough. Consumers’ after-tax incomes dropped in the second and third quarters of the year, the first back-to-back drops since 2009.
The recent small pickup in consumer spending has come out of their savings. Obviously this can’t continue, and corporations know it. Consumer savings are already at their lowest level in four years.
Get it? Corporate profits are up right now largely because pay is down and companies aren’t hiring. But this is a losing game even for corporations over the long term. Without enough American consumers, their profitable days are numbered.
After all, there’s a limit to how much profit they can get out of cutting American payrolls or even selling abroad. European consumers are in no mood to buy. And most Asian economies, including China, are slowing.
We’re in a vicious cycle. The only way out of it is to put more money into the pockets of average Americans. That means extending the payroll tax cut. And extending unemployment benefits.
Don’t stop there. Create a WPA to get the long-term unemployed back to work. And a Civilian Conservation Corp to create jobs for young people.
Hire teachers for classrooms now overcrowded, and pay them enough to attract people who are talented as well as dedicated. Rebuild our pot-holed highways. Create a world-class infrastructure.
Pay for this by hiking taxes on millionaires.
A basic bargain was once at the heart of the American economy. It recognized that average workers are also consumers and that their paychecks keep the economy going.
We can’t have a healthy economy until that bargain is restored.

Friday, November 25, 2011

Invest a Little Time

OK, all you right-wingers. This should envelope you from both sides, but will require a little work.

First, watch the decidedly left-wing video, and try not to implode. It's mostly about America, but lots of it apply here too. Let's discuss the meat, not the sizzle.

Next, read the book "Endgame: The End of the Debt Supercycle and How It Changes Everything".

I have to admit, I haven't read much more than the introduction to the book - just downloaded it.

These both should be good fodder for conversation.....

Tuesday, November 22, 2011

Occupy That!

Globe and Mail

I've received plenty of feedback on my Occupy This! post, both informally and through comments on the post itself.

As I watched the news this morning, I also saw the Premier (carpetbagger that she is) say "I'm fed up" and "it's time to end this nonsense".

These homeless, unemployed, drug-addicted, social outcasts have worn out their welcome. They also have the misunderstanding that they can change the world and (mostly because we told them) that getting an education is the key to upward mobility.

I have noticed, however, that these opinions all come from people who have already "made it".

So from someone who's "made it", here are two specific suggestions to the Occupy movement to really have an impact.
  • Pick a multinational oil company and boycott that company. Make it cool not to do business with Shell, or Esso, or Chevron - in the USA I'd pick Exxon.
  • Move your money out of one of the big banks in Canada, and move it to a local Credit Union. There's already an ap for that! 
With these two actions, if enough people did them, you'd have an irritating, perfectly legal way of impacting two of the largest, most corrupt, most influential sectors we have - energy and banking. Simple and easily understood.

Actually, in order to have an impact, it's the over 40 crowd that will have to do this. The "Occupiers" probably ride bikes and take transit, and they certainly have no money.

Friday, November 18, 2011

Career Counselling

With winter settling in to it's wet & cold phase for the next several months, and with me pretty much stuck here in Vancouver for the duration (maybe?), it's time to turn my thoughts to using my brain again and doing something that's both challenging and flexible. Earning some cash isn't a bad idea either.

I've started another blog with the intent of commercializing it - but first you've got to get traffic, and the only way get that is with content. I think I'm up for the content creation part of this, but could use some help with some anecdotal stories from any of you reading this - have a look at the blog and you'll know what kind of stories I'd like (maybe a little Q&A is in order as well).

I was somewhat hesitant to jump in this with both feet, not knowing if this was a reasonable idea or not - it was for me, but I hadn't really talked to anyone about it. So yesterday, I had a conversation with John (Alpha), and bounced the ideas off him. He had many suggestions, but on the whole thought that the thinking was clear and the objective was obtainable (traffic and some money). We had dinner last night with another tech/personal friend, and we're going to schedule a lunch in the next week or two to discuss in detail.

John mentioned another idea that I've pondered, but never very seriously - contract technical writing. I don't know if I'd be any good at it (I suspect that I might, though), but he did say that there's a demand for these kinds of people in the Vancouver area and that often it's a career driven by a lifestyle choice - which would describe me perfectly. We'll see how this pans out as I think about it longer. Years ago Dave K said that his ideal job wouldn't be one job, but seven or eight small ones (I doubt he remembers this, but I do). I think that's about as good as you can get, provided that it's not overwhelming.

So back to the blog ... have a read and tell me (honestly) what you think. It's a work in process, so it's not that pretty. The idea is to get content first, traffic second and monitization last.....

Wednesday, November 9, 2011

Occupy this!

Jeff Vinnick for the Globe and Mail
I've had plenty of time now to come to some understanding of the "Occupy XXX (fill in name of city here)" demonstrations over the last several weeks.

At first, although I sympathized with the demonstrators, they didn't have a single, cohesive theme to grab me with. Something I could latch on to. Kind of like the Tea Party. Although they (the Tea Party) had a simplistic, easy-to-understand, uninformed theme - at least it stuck. Seems that the right wing in the USA has a distinct advantage of being able to stay on message.

But the more I listened and read, the clearer it became to me. There isn't a clear message because there can't be one. We're past the days of 'easy solutions for easy problems'. There is no single thing - or even several things - we could do to meet their needs.

What I think they're calling for - and this is just my interpretation - is an entire restructuring of the way we do things. The system we have now is 'winner take all'. There is no long term view - either in the business world or in our individual lives. The rules have been rigged to support this idea. Here are several examples of what I'm thinking of:
  • Corporations have person-hood.  Corporations have all the privileges of being a person, with very few of the responsibilities. And none of the downside. Being beholden to shareholders first, second and third is lunacy. And most every corporation that says their employees, customers, or social responsibility is high on their list - is lying to you. Shareholders trump all.
  • Young adults today have a much reduced chance of finding real, rewarding work. Unemployment is very high, and the 'under-employed' is a huge class (across all age groups).
  • We've been fed the 'you must go to University to get a good job' line for decades now. Today we know that's foolish and stupid.
  • We export everything we can export - jobs, water, oil - without regard for the repercussions (like huge unemployment). We reward the people who do the exporting. 
  • People who add no value are rewarded excessively (banking).
  • People who add huge value are not rewarded at all (teachers, cops, firemen, social workers).
  • We have lived way beyond our means in the West for decades. Now it's coming home to roost.
  • We're very quick to promote democracy when it suits us (Egypt, Libya), but not so quick when it doesn't (Greece, Occupy XXX).


When I see in the news today that the City of Vancouver is trying to shut down the Occupy site downtown, I can't help but think that 'if you want to really inflame the situation and bolster the movement, that's how to do it'.  They're inconveniencing nobody. The cries of 'but someone died there' are hollow - go to the Downtown East Side and see how many die there every week. But we never see or hear about those deaths. The site is at most an eyesore for those who live by the Art Gallery (nobody). It's a shame that all the people working in downtown Vancouver might have to look at the site for a few minutes a day. And a shame that they had to re-route the Santa Clause Parade - hardship, I know.

So that's my rant of the moment - I'd like to hear from anyone who's over the age of 30 and agrees (or disagrees) with me!

Monday, November 7, 2011

Sadly, the redneck antenna is going...

This morning, Laura took it upon herself to phone Shaw Cable and change our lineup - again. As of tomorrow, Doug's redneck antenna experiment will end, and corporate greed and consumer hand-feeding will return - it's part of the bargain when you sign up for cable.

So, in this household anyways, Internet-only + over-the-air television doesn't cut it yet. I think that I could be quite content with this setup, but I'm apparently only one vote. When Laura went to sign up again, she did get the cost down, so it won't be quite the financial hit that it was last time.

Perhaps if I could just get a US-based IP address, then we could use Hulu or Google TV? Hmmm.....

Tuesday, November 1, 2011

The debacle...

In mid-August I did something that I've heard lots about, but knew no-one who had actually done it. I cut the cable TV. Completely. Zero. Zilch. Nada. In order to somewhat compensate, I beefed up the Internet access to higher upload and download speeds, as well as an increase in the monthly data cap.

This has now transformed into a full out family brawl, to which I've become particularly obstinate. You see, David returned from Korea this last weekend, and wants to get his hockey fix. Laura wants the fix too. After the tremendously fulfilling Canucks season last year (if you don't read the sarcasm, let me assure you that it's there), I have no doubt why.

I figured that with my redneck antenna, you could get CBC quite well, and you can. I didn't know that CBC doesn't carry all of the games, for that you'd need SportsNet. SportsNet isn't available over-the-air. Hence the argument.

Both Laura and Dave have offered to pay for all or most of the cable required to get hockey on for this season. Problem is that I think Laura's cash could be better spent (she is the only breadwinner in the household right now), and Dave is a starving artist that can better use his funds. And I'm pulling the "I'm an asshole" card and saying "no" regardless.

My argument is that, other than some hockey (non-CBC) there isn't anything worth watching that we can't find some other way - be it over-the-air, Netflix, or downloaded. Hockey is the casualty. Since I'm no hockey fan, it doesn't bother me at all. But I do understand that the other members of the family (note that both Kathryn and David are only here for a few short weeks, and Kath could care less) love it. I can't say I love (or even like) the "hockey shrapnel" left in the house during and after a game. The yelling at the TV confuses me.

So am I being a "ruthless redneck" or just "ahead of the curve"?