Category: Corporate Welfare

A Strategy for 2020 Emerges

The Daily Escape:

Fall in Hopkinton, MA – November, 2018 photo by Karen Randall

The 2020 election campaign has already started, regardless of whether we are ready.

“Big Idea” strategies are in the air. And the large group of potential Democratic presidential candidates are being discussed.

And we no longer have to chew on the failure by Democrats in 2016. We can now talk about lessons learned in the 2018 midterms, and how they may apply in 2020. Wrongo wants to highlight three Democrats who won in deeply Republican districts. Max Rose, who won on Staten Island in NYC; Kyrsten Sinema, who won the open Senate seat in Arizona; and Lauren Underwood, who won a Congressional seat in Illinois.

Rose won a district that went heavily for Trump in 2016. He beat a long-time incumbent Republican. He did it by asking for a chance to reshape the fortunes of working people. From the NYT:

He offered a simple, unifying message that was progressive in substance but relatively neutral in its delivery: that the system is rigged to benefit special interests, that the little guy is getting stiffed over and over, that we need better infrastructure and stronger unions.

Demographic change helped. Rose’s district covers parts of Staten Island and Brooklyn, where Millennials who have been priced out of living in Manhattan and trendy Brooklyn are now locating.

Kyrsten Sinema’s story is different on the surface, but similar in what got her elected. A three-term member of Congress, she campaigned on her biography. She was homeless for three years as a child. Sinema is an openly bisexual former Green Party activist who moved to the political center.

Sinema promised to be a nonpartisan problem-solver. She campaigned on health care and protections for people with pre-existing conditions. Sinema treaded lightly on immigration, but probably looked pro-immigrant versus her opponent Martha McSally, another member of Congress who was very anti-immigration. 2.1 million Latinos live in Arizona, and after Trump’s visit in October, there was a spike in Latinos returning early ballots. Most Arizona residents vote by mail, and many Latinos voted for Sinema.

Lauren Underwood won an Illinois Congressional seat held in the past by the infamous Denny Hastert. The 32-year-old African-American nurse, unseated four-term Rep. Randy Hultgren in a district that is 86% white. The district was gerrymandered after the 2010 census to make it an even safer Republican seat. She won by stressing health care for all Americans.

These three candidates were successful in traditionally Republican places. They each had great personal stories. They each ran as problem solvers who wanted to help working families. This shows there are two threads that mattered in 2018: The candidate, and a message that addressed the things that were alienating people in their districts.

If we widen out our view to America today, alienation is behind the rise of Trumpism, and the rise of populism across the world.

The leading cause of people’s alienation is economic inequality.

Candidates can win as centrists if they are willing to fight economic inequality, because everybody knows that the system is rigged to benefit special interests.

Progressives can also win on economic inequality, because the largest divide in our country is between the 98% and the 2%. This idea can unite us, because nowhere in the US do the capitalists outnumber the salaried and hourly wage people.

Remember what Franklin Roosevelt said in his acceptance speech: (emphasis by Wrongo)

Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth… I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.

Today, Democrats need working people to vote for them if they want to win decisively. But since they govern like mainstream Republicans when in office, they must change to an FDR-like call to action.

It is possible to build voting coalitions that pick off a few red states in 2020. In fact, the midterm results were a terrible leading indicator for Trump in 2020. Without Hillary heading the ticket, Midwest states like Michigan and Wisconsin appear to be returning to Democrats. Pennsylvania is already back.

The Dems need to convince voters that governing the country in a manner that benefits everyone is a better idea than governing the country in a manner that benefits only a few.

The potential new votes for Democrats by following this strategy is largely the pool of non-voters. They are the majority in this country, and they are alienated.

They also outnumber the small percentage of persuadable Republican voters.

Nominating high quality candidates and fighting alienation are the keys to success in 2020.

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Letter From Russia, Part III

The Daily Escape:

The Assumption Cathedral, Yaroslavl, RU. Originally built in 1210, it was  blown up by the Soviets in 1937 as part of their anti-religion policy. This new cathedral was constructed in 2010 on the same spot. In front is an eternal flame memorializing the soldiers and the workers of WWII.

Wrongo and Ms. Right spent the day in Yaroslavl, Russia. It’s a mid-sized town of about 600k residents, and an important port on the Volga River. The Volga is more than 2,000 miles long, tying the western Russian cities together. Yaroslavl is an ancient city, founded in 1010.

In Yaroslavl, we learned two interesting facts about Russian towns. Any town of size has a fortress that includes a church. In Russia, that space is called a “Kremlin”. Second, despite the collapse of the the Soviet Union, statues of the heroes of the revolution were not taken down. The idea is that young people should understand their history, both the good and the bad. Major streets have kept their revolutionary names as well.

Maybe there is a lesson in that for America.

In visiting both tiny towns and large cities, it quickly becomes evident that the peoples of Russia have suffered immensely over the centuries. They endured long periods of starvation, and their losses in blood and treasure at the hands of both their enemies and their rulers were truly extraordinary:

  • As many as 17 million died under Stalin in the Gulags. At their high point, there were thousands of Gulags across the Soviet Union.
  • In WWII, during the war with Germany, Russia lost 27 million people.
  • During the 400 years of serfdom, millions of serfs died during forced labor. They built the palaces, roads and waterways that remain in use today between Moscow and St. Petersburg.

If history teaches us just one thing about Russia, it is that its people know suffering. They have survived, and in Wrongo’s brief visit, appear to have thrived. Stores are full of product, markets are busy with the purchase of fresh vegetables, meats and fish. New cars are on the streets, theaters are open, and everything looks very clean.

How have a people who have endured so much suffering, succeeded in the modern world? How were they not irretrievably damaged by their multiple tragedies?

How are they so resilient?

Perhaps their legendary winters forge a determination to do whatever is necessary to survive a long, hard fight with limited resources. Perhaps Russia’s long history of invasion and occupation by hostile powers has played a role: Russians have been invaded by the Mongols, the Turks, the Poles, the Swedes, the Germans and the French. Their story is ultimately one of resilience despite tremendous loss of life, repeated destruction of infrastructure, and against long odds.

Another thing is that the people seem to have a profound and deep feeling for their homeland, Mother Russia. That seems to be true, regardless of who is in control in the Kremlin, or which Tsar was in charge at the time.

So they fought and died for the motherland, regardless of who was leading them.

Compare that with America’s resilience. How resilient are we, in the 21st Century? We have never faced invasion, but we have faced attack. On our homeland, we fought a seven-year revolution, and a bloody civil war. We’ve faced natural disasters.

After 9/11, we overreacted to the threat of Islamic extremists by weakening our First Amendment rights with the Patriot Act. We launched wars in Afghanistan and Iraq. But, we didn’t come together as a nation. In fact, 9/11 threw gasoline on the fire of America’s already factionalized politics.

When Japan attacked us at Pearl Harbor in 1941, we came together as a people. There were a few who said we shouldn’t go to war, but the vast majority of our people got behind a global war against fascism. We sent our fathers, brothers and husbands off to war. Women worked in the factories for the war effort. Some were on the front lines with the troops. We rationed butter and sugar.

Our people knew hardship, and pulled together in common cause.

The question is: Will today’s America still pull together in common cause? Do we have the strength of character, the grit, to fight for something larger than ourselves? Could we again sacrifice for what we believe to be the right thing?

Our response to the Great Recession of 2008 showed us that in an American financial crisis, it’s every person for themselves, unless that citizen happens to be a financial institution.

When you think about it, do you still love Lady Liberty enough to fight for her?

To send your kids to fight for her?

And, do you think that we love her as much as Russians seem to love Mother Russia?

 

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Saturday Soother – August 18, 2018

The Daily Escape:

The Kimberley, Western Australia

Anything happen while Wrongo was away? Seems like it was pretty much business as usual: Trump takes away Brennan’s security clearance, Manafort’s case goes to the jury, bridge disaster in Italy, and Turkey’s currency fell again.

But, on Wednesday, Sen. Elizabeth Warren (D-MA) introduced the “Accountable Capitalism Act” in the Senate. She then set out her logic in a Wall Street Journal op-ed, which drew the usual Neanderthal responses from America’s capitalists.

Warren notes that as recently as the early 1980s, conservative groups acknowledged that corporations were responsible to employees and communities, as well as to shareholders. This is a good time to mention that there is no legal obligation to “maximize shareholder value”. The Supreme Court has never made a decision on it, nor has Delaware, the state where most large companies are incorporated.

Warren, from her bill:

But in the 1980s, corporations adopted the belief that their only legitimate and legal purpose was “maximizing shareholder value.” By 1997, the Business Roundtable declared that the “principal objective of a business enterprise is to generate economic returns to its owners”.

More from the bill:

This shift is a root cause of many of America’s fundamental economic problems. In the early 1980s, America’s biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93% of their earnings to shareholders.

Warren’s point is that corporations have special privileges under our laws. Those privileges should warrant that corporations also have special responsibilities.

That’s not a completely new idea, it was the point of the New Deal regulations. FDR wasn’t an economic revolutionary – he was a member of the elite who saw plenty of room in America for himself and his friends. He understood that the pure capitalism of his time would destroy both the elites and the country if it didn’t change.

So FDR saved capitalism by making it more equitable and less predatory. His plan worked until the 1980’s. But now, the Republicans want to take us back to the 1920s.

Capitalism again needs to be changed/saved, and Warren is taking a small step to do just that. She wants to significantly transform shareholder rights to force corporations to have the social responsibility that comes with personhood, as well as the personhood rights already generously provided to them by the Supreme Court. More from Warren:

My bill also would give workers a stronger voice in corporate decision-making at large companies. Employees would elect at least 40% of directors. At least 75% of directors and shareholders would need to approve before a corporation could make any political expenditures. To address self-serving financial incentives in corporate management, directors and officers would not be allowed to sell company shares within five years of receiving them—or within three years of a company stock buyback.

Warren knows that Corporate America is in love with share buy-backs. Warren seems to accept William Lazonick’s observation that:

 …since the mid-1980s net equity issues for non- financial corporations have been generally negative, and since the mid-2000s massively negative.

In the modern era of CEO-kings, owners take more money out of corporations in the form of buybacks and dividends than they put in via new investments.

Even if her bill goes nowhere, Warren is educating those who believe that “maximizing shareholder value” is enshrined in civil law. Warren, along with a few progressives, continue to set much of the agenda for whoever wins the 2020 Democratic nomination.

OK, time to cruise into the weekend, wearing your flip flops. Time to shut out Omorosa and Trump.

Time for your Saturday Soother. Let’s start by brewing up a strong cup of Motozintla Caiaphas Mexico coffee ($14/12 oz.) from Patria Coffee in Compton CA. There is a feel-good story about the brewer, Geoffrey Martinez, here.

Now, settle back in an air-conditioned room and remember Aretha Franklin. Wrongo is reminded of the Steely Dan lyric from 1980: “Hey nineteen, that’s ‘Retha Franklin, She don’t remember the Queen of Soul.” The singer laments that his too-young girl friend has no idea who Aretha is. Well, everyone knows who she is today.

Aretha was many things, but few know that she occasionally performed opera. Here is Aretha at the Grammys in 1998, filling in for Luciano Pavarotti at the last minute when he was sick, and singing “Nessun Dorma”. She clearly doesn’t have the breath control of true opera singers, but it’s still a riveting performance.

Wrongo can’t embed the video he wants you to see, and all of the other YouTube videos of Aretha’s “Nessun Dorma” videos are for some reason, blocked today, so click here.

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Monday Wake Up Call – August 13, 2018

(Wrongo will be taking the next few days off. He has blog fatigue, and also needs to work on some deferred maintenance here on the fields of Wrong. He’ll be back later this week, unless events require him to jump back in sooner.)

The Daily Escape:

Abandoned house, Wasco, OR – 2018 photo by Shaun Peterson.

We wake up today to Yanis Varoufakis, the former finance minister of Greece’s, review of “Crashed: How a Decade of Financial Crisis Changed the World” by Adam Tooze posted in The Guardian. Tooze is an economic historian at Columbia University in NYC.

This isn’t a review of Tooze’s book, which sounds fascinating. Rather, it’s a meditation on one of Varoufakis’s ideas in his review of the book. Varoufakis says: (emphasis by Wrongo)

Every so often, humanity manages genuinely to surprise itself. Events to which we had previously assigned zero probability push us into what the ancient Greeks referred to as aporia: intense bafflement urgently demanding a new model of the world we live in. The financial crash of 2008 was such a moment. Suddenly the world ceased to make sense in terms of what, a few weeks before, passed as conventional wisdom – even McDonald’s, for goodness sake, could not secure an overdraft from Bank of America!

Tooze focuses on the causes of the Great Recession in 2008, and the implications for our 10-year long economic recovery. He observes that neoliberalism’s mantra about markets had to be shelved to save the US economy: (emphasis by Wrongo)

Whereas since the 1970s the incessant mantra of the spokespeople of the financial industry had been free markets and light touch regulation, what they were now demanding was the mobilization of all of the resources of the state to save society’s financial infrastructure from a threat of systemic implosion, a threat they likened to a military emergency.

We have no idea where the current aporia will take us, particularly since this “moment” has already lasted 10 years, and the hard-won economic progress may be easily reversed. Varoufakis continues:

Moments of aporia produce collective efforts to respond to our bewilderment. In the late 18th century, the pains of the Industrial Revolution begat free-market economics. The crisis of 1848 brought us the Marxist tradition. The great depression produced both Keynes’s General Theory and Friedman’s monetarism.

We are clearly at a point of intense bewilderment. What direction is correct for our economy and our society? The concept of aporia may explain why no real solutions have emerged in the past 10 years.

Tooze thinks that the world economy today is at a similar point to where it was in 1914. That is, we’re headed to a global war based on the competition of the advanced economies for resources (this time, it’s markets, water and energy), while the Middle East is at war, competing to determine which variant of Islam will be transcendent.

Varoufakis thinks we are more likely to be where we were in 1930, just after the crash. Since 2008, like back then, income inequality has continued to grow, and we have a potential fascist movement in the wings. Varoufakis asks if today’s politicians have the vision, or the ability, to corral corporatist power on one side, and the emerging nationalist movement on the other.

We’re into the post-2008 world, one in which the owners of society, the largest corporations along with the international capitalists, portray austerity as our only answer. They stress the need for continued globalization and the upward transfer of wealth via tax cuts as the best chance to survive and prosper after the 2008 crash.

This is global capitalism at work: Continuing to extract all the wealth that it can in every economy with a compliant government.

People are getting near a breaking point. They want a better life, and they want to regain political control. The challenge for capitalists and their politicians is: Can they continue to distract the base, keeping them compliant with corporatism and the financialization of our capital markets?

Capitalism ought to fear nationalism, because a nationalist movement could easily rally the poor and the middle class against Wall Street and corporate America. But, for the moment, capitalism seems to be stirring the nationalist pot. To what end?

Whether a fight against Wall Street and Corporatism will emerge, whether it will evolve into a fascist-style rallying cry remains to be seen.

We’re too early in this iteration of aporia to know or to see where we are going clearly. We need an alternative to today’s global capitalism because the track we’re on could easily turn the world into a gigantic Easter Island-like landscape.

What alternative to today’s capitalism (if any) will develop? Will ordinary people have some say in the alternative?

Stay tuned.

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Nothing Is More Important Than Voter Turnout

The Daily Escape:

Cau Vang (Golden Bridge) Da Nang, Vietnam. This footbridge opened to the public in 2017 – photo via themindcircle

The next few elections will determine if the US remains a minority-ruled country for the foreseeable future. And is there a significant number of non-voters who are predisposed to vote for Democrats.

Check out Adam Bonica’s article in Sunday’s NYT. Bonica, who is a political scientist at Stanford, says that generational shifts are under way that are more powerful politically than people realize. By 2020, half of eligible voters will be Millennials, or Post-Millennials (Gen Z). They will be two-thirds of voters by 2032, and they skew toward the Democrats:

The bottom chart shows that, while the nation is on the cusp of a generational revolution, Millennials and Gen Z’ers haven’t turned out to vote in the way that their elders do. This negates a 31 point Democrat edge in Millennials.

Bonica says that as they age, Millennials will become more likely to vote. He cites a general rule of thumb that turnout increases by about one percentage point with each year of age. This makes it possible to forecast how the generational advantage will grow over the next decade: By 2026, Millennials are expected to account for 19% of votes cast, up from 12% in 2014, with Democratic-leaning Gen Xers and Gen Zers accounting for an additional 34%.

As this happens, the Republican-leaning Silent Generation is projected to account for only 8% percent of votes cast in 2026, down from 23% in 2014. Their participation is bound to go down, the oldest members of the Silents will be 101 in 2026.

But, getting younger voters to turn out is a problem. Bonica says that among advanced democracies, turnout in national elections is a strong predictor of income inequality. The US has both the lowest turnout and highest share of income going to the top 1 percent. He has a very interesting chart showing turnout graphed against income inequality:

Virtually all other western democracies have higher voter turnout than the US. This is unlikely to be a coincidence. Bonica says:

This makes democracy an issue to campaign on. The Democratic base understands that it is waging a battle for the future of the country….They are also painfully aware that our electoral system is biased against them. A rallying cry to put democracy back on the offensive will get the base to sit up and pay attention. Delivering on the promise will get them to the polls.

This year, the Democrats need to focus with laser-like attention on winning the House. They are unlikely to get the Senate. Possibly, they can limit their losses to few, or maybe zero, net.

The Democratic message, assuming they can get their messaging act together, needs to be about these four points:

  • Better jobs
  • Ensuring democratic elections
  • Healthcare for all
  • Higher taxes on corporations

The Democrats can point at the GOP, saying they are the party of corruption, and of doing the bidding of the rich elites. From the Democrats’ point of view, ensuring democratic elections means: Less hacking, easier registration, more days of early voting, and vote-by-mail. All encourage civic engagement and participation.

The fact that Republicans generally do worse when more people turn out to vote is their own fault. We need to point out that their plan is to use vote suppression to weaken democracy, replacing it with a Trump-branded authoritarianism.

And there’s the issue of the Republican-controlled Supreme Court. It will have a strong conservative majority for the next few decades, and that’s going to mean Citizens United isn’t going away, and the Voting Rights Act won’t be strengthened.

Our only weapon is turnout.

We can’t just sit back and let demographics deliver us to power. Democrats will have to fight for these policies. We shouldn’t care that the odds seem stacked against the people who back these values.

Generational change is coming, and with it an opportunity to fundamentally transform the American government and who it serves.

To help with that, Democrats must insist on making voting easier, and more universal.

Then, hone their message.

Then, do everything in our power to make it happen.

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Sunday Cartoon Blogging – July 29, 2018

They found water on Mars. It appears to be salt water. Maybe we’ll build a giant desalinization device, and a few survivors of this hell on earth can give a fresh start to humanity on Mars. Also, Russian scientists found nematodes in Siberia that have been frozen for nearly 42,000 years. With climate change, they were visible to scientists. A few came back to life in the lab:

After being defrosted, the nematodes showed signs of life, said a report today from Yakutia, the area where the worms were found. ‘They started moving and eating.’ One worm came from an ancient squirrel burrow in a permafrost wall of the Duvanny Yar outcrop in the lower reaches of the Kolyma River….Another was found in permafrost near Alazeya River in 2015, and is around 41,700 years old….They are both believed to be female.

Both of those news items are more believable than much of what we hear from Washington, DC these days. For example, Trump’s speech to the Veterans this week included his caution about believing the news media. That led to this cartoon by Darin Bell:

And consider the gloating about “historic growth” in GDP by Trump. John Harwood schools us on the data:

If you think that’s fake news, check out the data.

Trump went off on Iran. What could be behind President Rouhani’s provocations?

Michael Cohen stayed in the news again this week. He’s gonna get a TV series:

Tariffs are always a tax on consumers. Donny is here to collect:

Americans no longer have unlimited voting rights, or election security in the US. This is believable:

Establishment Democrats always react the same way:

Wrongo isn’t on board with the democratic socialism platform, but he believes that corporations should be subjected to tighter regulations. They should pay more in taxes. They should be forced to reimburse the people for the deleterious impacts of their activities, like cleaning up factory sites that have polluted the land.

And every American should have access to healthcare, childcare, and some form of employment. We could make the choice to provide a free education to every American if it were a higher priority than new bombers, or aircraft carriers. ICE should be reformed, not abolished.

Establishment Democrats are trying to scare voters away from candidates who support the democratic socialism agenda. They should relax, democratic socialism isn’t about taking everything what you have away, and making it government-owned.

When you consider the perils and benefits of democratic socialism, you should think about Europe. Five of the top 10 happiest nations in the world (according to the UN) are Scandinavian: Finland, Norway, Denmark, Iceland, and Sweden. And they are all democracies.

Ever since Alexandria Ocasio-Cortez upset the 4th ranking House Democrat by running on a democratic socialist platform, Dems worry that what worked in the Bronx won’t work in Kansas. They’re right, it won’t work in Kansas. That’s why candidates need to run on issues that are important to their districts. A voter in Kansas is probably more concerned over the price of wheat than he is about gay marriage.

But, running on the economy and jobs works everywhere.

Ocasio-Cortez campaigned with Bernie Sanders in Kansas. James Thompson, a centrist Democrat running for Congress in Kansas, said she might as well come out, because the local Republicans were going to call him a socialist anyway.

Democrats were called socialists in 1992 when Bill Clinton won. They shouldn’t panic – they should own the accusation.

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Saturday Soother – July 28, 2018

The Daily Escape:

Quote by John Maynard Keynes posted on the wall at the School of Economics, St. Petersburg State University, Russia – 2018 photo by Conor Morrissey

Welcome to the weekend. US GDP hit 4.1% for the second quarter of 2018. Trump was out there on Friday saying that the economic winning has only just begun, and that it’s due to the GOP tax cuts, and his moves to impose tariffs on our trading partners. He neglects to mention this year’s $1 trillion budget deficit that he and the GOP created. That’s what’s fueling our current growth, and it won’t last.

Speaking of tariffs, NPR reports that US ham and other pork products now face very high Chinese tariffs of between 62% and 70% after retaliatory tariffs by China. What happened next shouldn’t be surprising:

In recent weeks, the US Department of Agriculture has reported zero weekly export sales of pork to China….So our exports to the country have pretty much collapsed.

Does this mean cheaper bacon for America? As we have heard, “Trade wars are good and easy to win”. Apparently, the Stable Genius can bring home the bacon, but he can’t sell it abroad. Thoughts and prayers to all the pork producers who got conned.

US farm subsidies were about $23 billion last year. A year ago, the Trump administration proposed a $4.8 billion cut to that. Now he’s increasing the subsidy by a one-time $12 billion to make up for the effects of his tariffs.

OTOH, in the EU, farm subsidies for the 2021-2027 period are scheduled to be reduced by five percent to $420 billion. Maybe there will be some additional winning for our farmers, assuming we can export more to the EU. But the US isn’t above criticism: US dairy producers now have a whopping 1.39 billion-pound surplus of cheese; 4.6 pounds per American. Wrongo is doing his part to cut into the surplus, what about the rest of you?

And at the same time there is overproduction, there’s growing risk to our health due to overuse of antibiotics on dairy farms. America shouldn’t give up its food security and become dependent on other countries, but it’s time for clear(er) thinking about our agricultural policy.

The big news on Thursday night was that Trump’s former attorney, Michael Cohen, is now saying that Trump knew beforehand about the June 2016 meeting between his top campaign staff, his son and Russians promising dirt on Hillary Clinton. If true, it would add a lot to a case of Trump obstructing justice.

We’ll see if Mueller ever makes a case in the court of justice, vs. only in the court of public opinion.

Are you fed up yet with being told “what you’re seeing and what you’re reading is not what’s happening”? Or having Trump say that Putin is a good guy? Or, that North Korea is no longer a threat, that Canada is our enemy? Or, that some black football players hate America? Or, that immigrants are ruining everything? That our allies are out to get us, and there was no collusion!?

This takes Wrongo back to Cohen. Maybe he has the lead-up to the June meeting on tape as well.

In any event, we’ve closed the book on another hard week. Time to kick back, get soothed, and stare vacantly at all of the yard work we aren’t getting around to doing.

To help you relax, let’s open a cup of Martinez, California’s States Coffee & Mercantile’s new Reserve Cold Brew ($12/24oz. bottle). It is brewed from Tanzania beans, and is a ready-to-drink bottled black coffee. The brewer says it is richly sweet, with an umami undercurrent, and that adding whole milk mediates the umami impression, while amplifying the chocolate and spicy floral notes.

Wrongo says, go for it! Add ice and milk, and chug a couple to get your day started.

Now, settle back and listen to Ana Vidovic playing “La Catedral” by AgustĂ­n Barrios MangorĂ© on solo guitar. MangorĂ©, who died in 1944, was a Paraguayan virtuoso guitarist and composer, regarded as one of the greatest performers on the guitar. “La Catedral” is considered one of the most colorful, and difficult, works in the guitar repertoire. It is Barrios’ tribute to Bach:

Those who read the Wrongologist in email can view the video here.

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Monday Wake Up Call – June 4, 2018

The Daily Escape:

The Blue Grotto, Malta – photo by SingularET. Not to be confused with THE Blue Grotto on Capri, the hangout of the Roman emperor, Tiberius.

NewdealDemocrat over at Angry Bear raised a few excellent points about historically low unemployment and stagnant wage growth: (emphasis by Wrongo)

As I noted several weeks ago, even though we are at least closing in on full employment, the percentage of employers not raising wages at all has gone up in the last year:

(The blue line is the percentage of employers who have not increased wages. The grey shaded areas are recessions.)

There was more bad news from Axios , reporting on a meeting with the Dallas Federal Reserve about how big companies aren’t planning on raising wages at all:

The message is that Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.

Troy Taylor, CEO of the Coke franchise for Florida, said he is currently adding employees with the idea of later reducing the staff over time “as we invest in automation.” Those being hired: technically-skilled people. “It’s highly technical just being a driver,” he said.

The moderator asked the panel whether there would be broad-based wage gains again. “It’s just not going to happen,” Taylor said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? “Absolutely not in my business,” he said.

John Stephens, chief financial officer at AT&T, said 20% of the company’s employees are call-center workers. He said he doesn’t need that many. In addition, he added, “I don’t need that many guys to install coaxial cables.”

The Civilian Non-Institutional Population (those who the government tracks for jobs analysis), grew 21.3% between April 2000 and April 2018, yet, full-time jobs grew only 11.7%. This means that we can’t possibly be at full employment, despite the government’s headline unemployment rate of 3.8%, the lowest since 2000.

And if most employers are thinking like those at Coke and AT&T, wages won’t increase, despite the country’s nine-year economic recovery. If wages will not be increasing, where do employers think increased demand will come from? And, if companies are freezing wages during the supposed good times, what will happen when times turn bad?

Corporate policies are designed primarily to respond to the requirements of its management and its institutional shareholders, not employees. Employers’ profits have been increasing steadily, but the wealth keeps getting transferred upwards. And it’s the employers who are responsible for layoffs, and who use other methods to increase profits, such as automation, which leave the surviving workers in an increasingly poor negotiating position when it’s time for the annual raise discussion.

Do workers “deserve” an annual increase? By performing their jobs, workers produce value for the company. If a company is profitable, workers should get a cut, and if profits go up, so should their share.

If a particular individual isn’t performing well, then in an efficient/well-managed company, they’ll be replaced. If the job itself is not structured to produce effectively, in an efficient/well-managed company, the job will change. And if the company fails to do either, then in an efficient/well-managed company, the company will change, or it will fail.

It appears that with their paltry increases, workers are losing ground. Rents are rapidly rising in most cities. Wrongo saw a story about a New York City couple who moved from Brooklyn, NYC to Westport, CT for cheaper housing. It wasn’t many years ago that Westport was substantially more expensive than Brooklyn. In fact, it was once the home town of Paul Newman and Martha Stewart.

Many workers are fighting for a 2% raise. (Remember, 2.6% is the average, which means many workers are getting less than that). Factor in the rising rents, food costs, and health care insurance, and you can see that the average hourly worker has little chance of upward mobility.

Is this an inevitable outcome caused by Mr. Market? Not really. Our government has its thumb on the scale via tax benefits to corporations, combined with a Federal minimum wage that is impossibly low.

Time to wake up, America! We must stop letting corporations hoard the profits! Capitalism is institutionalized avarice. Its purpose is concentration of power. And one outcome is the spreading of economic misery.

To help you wake up, here is the Soup Nazi who, says, “No soup for you! Come back 1 year!” Just like many employers say when hourly employees ask for a raise.

Those who read the Wrongologist in email can view the video here.

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Teacher Strikes Are Pointing the Way to Change in 2018

The Daily Escape:

Baltimore Oriole in crab apple tree – 2014 photo by Wrongo

Happy (or unhappy) tax day!

Yesterday, we talked about two red state revolutions led by teachers who are demanding better pay and funding to address educational needs. We also talked about the shameful reactions of the governors of Kentucky and Oklahoma to the demonstrators.

But the governors are not the only local officials with tin ears. Valerie Vande Panne, writes in AlterNet:

In Oklahoma, the Oklahoma Education Association (OEA) is the primary teacher’s membership organization. It recently announced that the strike is over. But, Oklahoma teachers continue to strike, and are seeking a new union that would actually represent their interests. Meanwhile, legislators are seeking ways to punish the striking teachers, and have accused them of bussing in protesters, and local police call the teachers “terrorists.”

2018 is a gubernatorial election in Oklahoma, in addition to seats in the House and Senate. There are rumblings in the state to replace every single elected official this year.

Wrongo is indebted to Ms. Vande Panne’s article for the facts about Oklahoma below.

Despite the common view that Oklahoma is Republican red, most voters in Oklahoma are registered Democrats or are unaffiliated. Bernie Sanders won the 2016 presidential primary. Bernie got more votes in the 2016 primary than Trump. A third of Oklahomans are African Americans, Native Americans, Latinos, or are of mixed race.

And the demographics are changing rapidly: In Guymon, a small town in the Oklahoma panhandle, just north of the Texas border and hours from the nearest shopping mall, 37 languages are spoken in the public school system of 3,000 students.

Everyone knows that Oklahoma should be a wealthy state: Oil, gas, and coal are kings of the economy, but decades of sweetheart deals have left the state paying those industries more than those industries pay the state.

There seems to be a lot of red state unrest right now.

Are people finally getting fed up? Is the right wing’s mantra of too much government and not enough freedom starting to lose its grip? Has social media ended that mass media’s control of the narrative so much that opinion can easily be mobilized?

The strikes in West Virginia and Oklahoma are “wildcat” strikes. The rank and file basically decided to advocate for their own interests, and when “leadership” in WV (and apparently in OK) made an agreement with the legislature that was less than what the strikers had demanded, the rank and file defied its own union “leaders”.

These states have right-to-work laws, and few protections for labor, but when the teachers act together, they have political power. Without strong unions, labor has nothing to lose, if they mobilize enough of their rank and file. The union leadership has for years cozied up to local politicians, and now seems to have lost control over their own rank and file.

These reliably “red” states have a very different political history than we might expect. During the late 19th and early 20th centuries, Oklahoma, Kansas and much of the Confederate South were hotbeds of populist uprisings, from the Farmers’ Alliance and the Peoples’ Party. These parties even elected Members of Congress, and Senators. The Peoples’ Party merged into the Democratic Party in 1896.

This sets the stage for the 2018 elections. Those who want change on the local or national level shouldn’t run simply as anti-Trump. They need to address local issues that are resonating, like teacher pay and school funding. At the root of these issues is the continued cutting of taxes for corporations and the wealthy. Without revenues, schools cannot be improved, and teachers’ pay will stagnate.

Fight for equal pay for the same jobs, work to eliminate the barriers to voting, and end gerrymandering.

Run on these issues. See what happens.

 

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Lockheed’s F-35 Jet a Failure After 17 Years

The Daily Escape:

Cherry Blossoms in snow, Fairfax VA – March 2018 photo by Jen Johnson

Lockheed Martin‘s fifth-generation stealth fighter, the F-35, has cost $406.5 billion so far. And it still has 263 “high priority” unaddressed performance and safety deficiencies. The list of setbacks includes faulty ejection seats, software delays, weapons targeting problems, and helmet-display issues.

The program was launched in 2001. The blog, War Is Boring says:

The American people were assured the new jet would enter service in 2008 and be a high-performance replacement for the military’s aging airframes while only costing between $40 million and $50 million.

But, 17+years later, the F-35 has continuing redesign, test deficiencies, fixes, schedule slippages and cost overruns. And according to War Is Boring (WisB), it’s going into production with many still-unsolved problems:

Despite this, the F-35 Joint Program Office now intends to call—quite arbitrarily—an end to the plane’s development phase and developmental testing. Instead of completing the presently planned development work, the Program Office is now proposing to substitute a vaguely defined F-35 upgrade program called “continuous capability development and delivery.”

This means that the F-35 will begin operational testing this year, using 23 planes that still incorporate the 263 known deficiencies.

And it’s worse than it appears. The reason to build this aircraft was to combat advanced future threats by our competitor’s air forces. However, WisB reports that testing shows that the planes already delivered cannot even effectively address the current threats. That’s a problem. The ancient, battle-proven A-10 is one of the aircrafts the F-35 was designed to replace:

As of now, testing shows the F-35 is incapable of performing most of the functions required for an acceptable close support aircraft, functions the A-10 is performing daily in current combat.

More:

In the air-to-air mission, the current F-35 is similarly incapable of matching legacy aircraft like the F-15, F-16 and F-22.

So, it looks as if we have a mismanaged program that may take many additional years to turn around. Along the way, they have gotten much more expensive. CNBC reports that the cost of each aircraft has doubled:

As it stands now, the unit price for an F-35A — including aircraft, engine and fees — is $94.3 million.

So, it’s actually a worse aircraft than those it supposedly replaces, and it’s more expensive. And, we’re ordering many, many more of them. CNBC reports that the fleet will grow from 280 aircraft to 800-plus by the end of 2021.

And it seems well past the stage where the program could be cancelled, even if the Department of Defense wanted to. The plane has suppliers in all 50 states, a perfect form of political insulation from any effort to scrap the program.

If the F-35 can’t be fixed, we may see a gradual trickle of announcements about additional procurement of A-10s, F-18’s, etc., to plug the gaps. It might turn out that F-35s will be for show, or limited use only, a little like battleships in WWII.

The colossal cost for a program that doesn’t work is mind blowing – all things considered, the F-35 program will cost in the low trillions of dollars. Despite all of the effort, time, and money, it remains an open question if the F-35 will ever live up to the promises the Defense Department made years ago.

The latest annual report from the Director, Operational Test & Evaluation, (DOT&E) has this summation: (brackets by WisB)

Finally and most importantly, the program will likely deliver Block 3F [the untested, allegedly “fully combat-capable” F-35 model now entering production] to the field with shortfalls in capabilities the F-35 needs in combat against current threats.

In other words, they acknowledge that the F-35s rolling off the production line will be unable to even deal with existing threats, let alone future ones. Where’s the accountability?

But the F-35 is a success in other ways. It’s been a perfect way for Congress to move taxpayer money to the defense industry. If the object is to keep Lockheed Martin shareholders happy, the F-35 is a roaring success.

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