Category: Corporatism

Is Taxing Robots a Solution to Fewer Jobs?

The Daily Escape:

(Slot canyon with dust devil – photo by Angiolo Manetti)

Yesterday, the Dutch voted in an election pitting mainstream parties against Geert Wilders, a hard-right, anti-Islam nationalist whose popularity is seen as a threat to politics-as-usual across Europe, and possibly, as an existential threat to the EU.

Wilders, who wants to “de-Islamicize” the Netherlands and pull out of the EU, has little chance of governing, as all of the mainstream parties have already said they won’t work with him. Given Holland’s complicated form of proportional representation, up to 15 parties could win seats in parliament, and none are expected to win even 20% of the vote. OTOH, polls show that four in 10 of the Netherlands’ 13 million eligible voters were undecided a day before voting, and there is just 5 percentage points separating the top four parties, so Wilders could surprise everyone.

As Wrongo writes this, the Dutch election results are not known, but PBS NewsHour coverage on Tuesday surfaced a thought about taxing robots. PBS correspondent Malcolm Brabant was interviewing workers in Rotterdam:

Niek Stam claims to be the country’s most militant labor union organizer. He says the working class feel insecure about their prospects because of relentless automation and a constant drive to be competitive. The union is campaigning for robots to be taxed.

Brabant then interviewed a worker:

Robots do not buy cars. Neither do they shop for groceries, which leads to a fundamental question: Who’s going to buy all these products when up to 40% of present jobs vanish?

This isn’t an entirely new idea. Silvia Merler, blogging at Bruegel, says:

In a recent interview, Bill Gates discussed the option of a tax on robots. He argued that if today human workers’ income is taxed, and then a robot comes in to do the same thing, it seems logical to think that we would tax the robot at a similar level. While the form of such taxation is not entirely clear, Gates suggested that some of it could come from the profits that are generated by the labor-saving efficiency…and some could come directly in some type of a robot tax.

The main argument against taxing robots is made by corporations and some economists (Larry Summers), who argue that it impedes innovation. Stagnating productivity in rich countries, combined with falling business investment, suggests that adoption of new technology is currently too slow rather than too fast, and taxing new technology could exacerbate the slowdown.

It can be argued that robots are property, and property is already taxed by local governments via the property tax. It might be possible to create an additional value-added tax for robots, since an income tax wouldn’t work, as most robots are not capable of producing income by themselves.

Noah Smith at Bloomberg argues that the problem with Gates’ basic proposal is that it is very hard to tell the difference between new technology that complements human work, and new technology that replaces them. Shorter Noah Smith: Taxation is so hard!

Why are Western economies stagnant? Why has wage growth lagged GDP growth? Automation is certainly a key factor, but rather than point the finger at the corporations who continually benefit from government tax policies, let’s just assign blame to an object, a strawbot, if you will. That way, we won’t look too carefully at the real problem: The continuing concentration of economic and political power in the hands of fewer and fewer corporations.

Automation isn’t the issue, tax laws that allow economic treason by corporations in their home countries are the issue.

Why is nationalism on the march across the globe? Because fed-up workers see it as possibly the only answer to the neoliberal order that is destroying the middle class in Western democracies.

Let’s find a way to tax robots. Something has to offset Trump’s tax breaks for the rich.

Now, a musical moment. Did you know that “pre-St. Patrick’s Day” was a thing? Apparently, some dedicated celebrators prepare for the day itself by raising hell for up to a week beforehand. With that in mind, here is some pre-St. Pat’s Irish music, with Ed Sheeran singing “Nancy Mulligan” a love song about his grandparent’s marriage during WWII, against the wishes of her parents, and despite their Catholic/Protestant differences:

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

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Why Trump Doesn’t Talk About Jobs Anymore

The Daily Escape:

(Bamboo after snowfall in January, near Kyoto. Photo by Hiroki Kondo)

During the 2016 presidential race, Trump campaigned on populist themes. Now that he is in office, it is clear that his policies will be neither populist nor popular, but strictly pro-business. The first clue was his choice of Cabinet members. Despite promising to “drain the swamp”, nobody realized that he could do that by making lobbyists pointless, as their clients are in charge of the government: The CEO of Exxon is head of foreign policy, a former Goldman Sachs partner heads Treasury, the daughter of a ship owner heads Transportation, a corporate raider is at Commerce, and so it goes.

Two months into his presidency, it is clear that the Trump economic policy is pro-business, not pro-jobs, or pro-little guy. If you still have doubt, the Republicans just rolled back a series of Obama-era worker safety regulations. The Senate voted 49-48 to kill a rule that required federal contractors to disclose and correct serious safety violations.

It’s clear that industry CEOs can’t believe their good luck, despite having opposed Trump at every step before the election. He’s only asking them for some vague promises to add new American jobs in return. Acting normal when they are interviewed after leaving a Trump meeting must be the hardest part of their day.

Trump hardly mentions jobs anymore, because he knows there aren’t many. His bogey man of weak domestic manufacturing needs to be addressed: China’s total exports in 2015 were $2.3 Trillion. The US total exports in 2015 were $1.5 Trillion, second in the world.

And the total value of US manufacturing in 2015 was $6.2 Trillion and we are doing it with fewer people than ever before. Today, US factories produce twice as much stuff as they did in 1984, but with one-third fewer workers.

Trump’s carrot and stick approach with US companies is theater. He is now industry’s number one value creator: When he commended Ford for deciding not to build a new plant in Mexico, the price of its shares rose 4.5%.

Softbank shares went up 6.2% after being praised by Trump for investing $50 billion in the US. Softbank’s motive was simple: Softbank owns Sprint, who would like to merge with T-Mobile. The authority to permit this merger lies with the new head of the FTC, yet to be named by Trump. Trump’s positive tweets feed Softbank’s hopes that the merger will be approved.

The Trump presidency has begun in the worst possible way for all who believed he would be an activist in new jobs creation for the lightly skilled, the people who overwhelmingly helped to elect him.

If the opposition wants to take Trump down, they should stop talking about Russia, and focus on Trump’s record with jobs creation. He made big promises – a job for everyone. It will be a long time (if ever) before a significant number of new manufacturing jobs materialize. This is true because Trump’s plan is to cut the fat out of government, cutting so many jobs that he might never add enough to make up for those he eliminates.

His plan is to use the freed-up funds to do something splashy with infrastructure. This would allow him to boast significant job creation, while downplaying the lost jobs in government. If Trump can figure out how to take unemployed, 50+ year old white males living in small town West Virginia, and make them productive, employed workers, then he’s a genius.

Capitalism hasn’t changed. A subset of oligarchs led by Trump have seized control of the US government. They are “nationalists”. Another subset, the “globalists” lost control of the state.

OTOH, the American people would have lost regardless of who won.

This is being repeated around the industrialized world, from Brexit, to Marine Le Pen’s right-wing challenge in France, to far right challenges to Angela Merkel in Germany.

The chaos described in Naomi Klein’s Shock Doctrine: The Rise of Disaster Capitalism is engulfing the world.

In honor of those who still believe that Trumpy will solve the jobs equation, here is Alan Jackson with “Hard Hat and a Hammer”:

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

Sample Lyrics:

Lace-up boots and faded jeans
A homemade sandwich, and a half a jug of tea
Average Joe, average pay
Same ol’ end, same ol’ day

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Congress Greases the Skids for Exxon

(See below for the Daily Escape)

While America’s focus has been on the Orange Overlord’s blizzard of executive orders, and his public love-making with Putin, we were distracted from some of the actions by the GOP’s Congressional worms who are intent on chewing through our regulatory protections.

Did you feel burdened by a Security and Exchange Commission (SEC) rule requiring that American corporations doing business overseas reveal how much money they’re spending in foreign countries? This is called the Resource Extraction Rule, and apparently, it has been a terrible burden for Exxon and other oil firms.

VOX reported that, on the same day the Senate confirmed Rex Tillerson as Secretary of State, the House voted to kill a transparency rule for oil companies that Tillerson once lobbied against while CEO of Exxon Mobil. Now it’s on to the Senate and the Orange Leader for action:

Using the little-known Congressional Review Act, the House GOP voted on Wednesday to kill an Obama-era regulation that would require publicly traded oil, gas, and mining companies to disclose any payments that they made to foreign governments, including taxes and royalties.

The Resource Extraction Rule is part of the 2010 Dodd-Frank Act. Back then, senators from both parties included a provision requiring greater disclosure from mining and drilling companies’ activities abroad. The hope was to cut down on corruption in resource-rich developing countries by increasing transparency.

Over the past six years, the SEC tried to craft a rule that would give the legislation teeth. But the SEC’s first attempt at regulation was struck down by the courts in 2012. The rule didn’t actually get finished until June 27, 2016. As Charlie Pierce says: (emphasis by the Wrongologist)

In other countries, resource extraction is a polite way of describing corruption and bribery on a grand scale, and it’s also a dead serious matter for local activists who are trying to take on international corporations and their native plunderers in local government.

Remember the Congressional Review Act (CRA). It is the mechanism the GOP will use to undo much of what the Obama administration did in the areas of corporate responsibility and environmental justice.

At its core, the CRA states that any “recent” regulation (the Act’s definition of recent means it only applies to those passed by the Obama administration after June, 2016) can be repealed by a majority vote of both houses of Congress. Any repeal vote taken by the Senate cannot be filibustered, and the list includes more than 50 Obama-era regulations.

So far, the Stream Protection rule that restricted coal companies from dumping debris and waste into nearby waterways has been revoked, along with the Social Security gun rule that prevented mentally impaired persons from buying guns.

Now, they’ve gutted the Resource Extraction rule.

Under the CRA, the SEC is barred from crafting a new rule that has “substantially the same form” as the repealed regulation. So, Congress has thrown a rose to the oil and gas and mining industries that will be difficult to reverse.

Despite GOP concerns, similar rules are in place in the European Union. Reporting by the United Kingdom, France, Norway and Canada shows $150 billion in payments to governments in more than 100 countries.

Sounds like something citizens should know about.

The GOP’s argument is that American oil and gas companies need to make these under-the-table payments, in order to compete in third world countries.

This is America under the GOP: We can’t afford to provide the world’s best education to our kids. We can’t afford to take care of our elderly, but we absolutely must have policies that allow Exxon and friends to bribe foreign governments.

 

The Daily Escape: The National Library of China, in Beijing’s educational district.

(Image by Tian-yu Xiong for the National Geographic)

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New FCC Chair Guts Net Neutrality

Today we premiere a new feature, the “Daily Escape”, a photo that hopefully will take you away from all that is wrong just now. Some photos will be by Wrongo, but most will be from professionals. They will not have any particular relevance to the topic of the day. They are here to help you pause for a moment, and go to a different place.

Today’s Daily Escape: George Peabody Library, Johns Hopkins University

Now, on to what’s wrong…

The principle that all Internet content should be treated equally as it flows to consumers is called “net neutrality”. Net neutrality looks all but dead under Trump’s new head of the FCC. From the NYT:

In his first days as President Trump’s pick to lead the Federal Communications Commission, Ajit Pai has aggressively moved to roll back consumer protection regulations created during the Obama presidency.

Mr. Pai took a first swipe at net neutrality rules designed to ensure equal access to content on the internet. He stopped nine companies from providing discounted high-speed internet service to low-income individuals. He withdrew an effort to keep prison phone rates down, and he scrapped a proposal to open the cable box market to competition.

Before he became FCC Chair, Pai served as an FCC commissioner, one of the Republican minority under the Obama administration. In that role, he opposed reclassifying broadband providers as common carriers, which allows the agency to regulate them like utility companies, a necessary step if the FCC was to enforce net neutrality rules. That reclassification might be next to go.

Today consumers can pay Internet service providers for a higher-speed Internet connection, but regardless of the download speed they choose, under new Chair Pai’s plan, they might get some content faster, depending on how much their content provider has paid the service provider.

Tim Wu at the New Yorker offered some insight: (emphasis by the Wrongologist)

With broadband, there is no such thing as accelerating some traffic without degrading other traffic. We take it for granted that bloggers, start-ups, or nonprofits on an open Internet reach their audiences roughly the same way as everyone else. Now they won’t. They’ll be behind in the queue, watching as companies that can pay tolls to the cable companies’ speed ahead

The new rule gives broadband providers what they’ve wanted for about a decade: the right to speed up some traffic at the expense of others. The motivation is not complicated. The broadband carriers want to make more money for doing what they already do. Never mind that American carriers already charge some of the world’s highest prices for a service that costs less than $5/month to provide.

In the large-scale server market, Internet traffic is nearly free. In that market, a terabyte of data costs about $1/month. That’s 1000 gigabytes/month, if you are not familiar with usage of that size.  The home user pays 10x to as much as 1000x more than that per month; $100 for 100 gigabytes of traffic is not uncommon. A recent offer from AT&T for 45 M/bit internet is $30/month, which includes 1TB of data/mo. So 1000 gigabytes costs $30, or $1 per 33 gigabytes, but, if you exceed ATT’s limit, the price goes up dramatically: You would have to pay $10 per each additional 50 GB.

No volume discount for you, but Netflix will get one.

Requiring access fees for faster service will be good for Netflix, since it won’t have to worry as much about competitive traffic, particularly from small companies. The ultimate result will be to lock in the current set of incumbents who control the internet, ushering in the era of big, fat, (and possibly) inefficient monopolies.

Republicans and big corporations like to say that they are against regulation because the free market should rule. That economic efficiency brings lower prices.

It is always a lie.

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Ready For The Coming Constitutional Convention?

According to Article V of the US Constitution, the states can convene a Constitutional convention without any action by the federal government if two-thirds (34) of them pass a resolution in favor of the convention. Right-wing organizations have been working for decades to convince enough state legislatures to call for such a convention, with the aim of limiting the powers of the federal government.

Now, Republicans are close to that goal.

Resolutions for a Constitutional convention have already passed in 28 states. And after November’s elections, Republicans control both legislative chambers in 32 states, while also dominating Nebraska’s uni-cameral legislature, giving them 33. This means that they are just one state shy of the 34 needed to propose an Article V convention. And Republicans now hold 34 governorships.

OTOH, Nevada’s House and Senate flipped to the Democrats, offering progressives an opportunity to rescind the convention resolution they passed previously.

Well done Democrats! Not only will the GOP control the Supreme Court for the next generation, they are on the cusp of rewriting the Constitution to make the Federal government a weak shadow of what it was under FDR and LBJ.

Say goodbye to the liberal democracy you say you cherish. Neither the President nor the Supreme Court have any say in this if 34 states agree to hold a Constitutional convention.

Last September, Convention of States a group dedicated to creating a Constitutional convention, convened a simulated Constitutional convention. At this meeting 137 state legislators representing all 50 states attended a “dry run,” in Williamsburg, Va. It produced drafts of six different proposed amendments:

  • A balanced budget amendment that mandates a Congressional supermajority in order to increase the national debt
  • Congressional term limits
  • Abolishing the federal income tax; while requiring a supermajority for other federal taxes
  • Curtail federal legislative and executive jurisdiction by reining in the commerce clause
  • Allow three-fifths of the states to nullify a federal law
  • Allow congressional override of regulations

The balanced budget amendment has been a priority of the American Legislative Exchange Council (ALEC) for decades. ALEC, whose funders include many very large US companies, has poured huge sums of money into state legislative races, and provides sample legislation to its members.

According to In These Times, at ALEC’s July 2016 annual meeting, the Constitutional convention was made a top priority. ALEC has adopted model rules for an Article V convention and offers its members model language for a resolution to call for a convention. After focusing on state legislatures for decades, they now have tight relationships with many states across the country.

Since 2000, ALEC did a brilliant job of using the Congressional mid-term elections and state elections as a referendum on the Obama administration. And since Obama came to office, Democrats have lost control of 958 state legislative seats.

If a convention gets triggered, state legislators from across the country will convene to propose amendments, which then need to be ratified by three-fourths (38) of the states to become part of the Constitution. There are concerns however, even within the right-wing that a Constitutional convention could become a runaway train, attempting to go way beyond its stated goals, or by creating more division in an already divided country.

The best argument against a Constitutional convention is that any benefit gained by fixing glitches in our system could easily be outweighed by the risk of letting the crazies have a shot at wrecking the whole thing.

But no need to worry about that particular risk. The crazies are already here.

Republicans love the Constitution so much that they just nominated as a Supreme Court Justice a strict constructionist who will decide cases in accordance with the Constitution’s original intent. The GOP says they cannot abide tampering with that.

And yet, they are working to change it.

If you think we should only want a Constitutional convention when the country reaches a crisis point, welcome to our new world:

There are two possible outcomes at this point. Either the crazies succeed and consolidate power on top of the wreckage of our current system, or they will falter and fail.

Sorry Democrats, you just can’t sit back and count on the latter.

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All Aboard The Bailout Train

In February 2014, Wrongo alerted that hedge funds and other Wall Street firms had been buying up single family homes, many of which had been foreclosed on during the housing crisis between 2007 and 2010:

Most rental houses in the US are owned by individuals…but a new breed has emerged: Wall Street-backed investment companies with billions of dollars at their disposal. In just the last two years, large investors have bought as many as 200,000 single-family houses and are now renting them out.

Tim G, a Wrongologist reader who is an expert in mortgage finance, commented at the time that he hoped that:

Fitch/Moody’s and any other rating agencies learned their lesson from 2007, and won’t (as you suggested) just slap AAA ratings on these. By definition these rental properties carry much more risk, since if they are vacant for any period, the incentive to keep paying drops quickly.

Well, slap they did. You know the drill from 2008; the new game was just like the old game: The new bundled securities were AAA rated by the same rating agencies. The bonds were sold to those seeking high yield without commensurately high risk.

Now we have a new wrinkle. Wolf Richter is reporting that Invitation Homes (owned by private equity giant, Blackstone) today owns 48,431 single-family homes. This makes Invitation Homes the largest landlord of single-family homes in the US. They just obtained government guarantees for $1 billion in rental-home mortgage backed securities. From Richter:

The disclosure came in an amended S-11 filing with the SEC on Monday in preparation for Invitation Homes’ IPO. Invitation Homes bought these properties out of foreclosure and turned them into rental properties, concentrated in 12 urban areas. The IPO filing lists $9.7 billion in single-family properties and $7.7 billion in debt.

The plan is to have a successful IPO, and then refinance some of the debt with the sale of $1 billion of government-guaranteed rental-home mortgage-backed securities.

Fannie Mae, a government-sponsored entity (GSE) that was bailed out, and then taken over by the US government during the 2008 financial crisis, is providing the guarantee of bond principal and interest, and the offering documents call them “Guaranteed Certificates”. More from Wolf: (emphasis by the Wrongologist)

This is the first time ever that a government-sponsored enterprise has guaranteed single-family rental-home mortgage-backed securities, issued by a huge corporate landlord. It’s an essential step forward in financializing rents: taxpayer backing for funding the biggest landlords.

These government guarantees allow Invitation Homes to pay lower interest rates. The bottom line is that Invitation will have cheap financing for future home purchases, and thus lower costs and greater profits.

It’s a sweet deal: low-cost funding made possible by government guarantees, is a special gift that was agreed to by the Obama administration. Other corporate landlords will want to follow in Blackstone’s footsteps, and it is difficult to see how Fannie Mae will choose not to guarantee the other firms.

Bloomberg reported on a Dodd-Frank mandated stress test conducted by the Federal Housing Finance Agency. It showed that during the next severe economic downturn, Fannie Mae and its sister Freddie Mac would need between $49 billion and $126 billion in taxpayer bailout money.

Socialize the losses, Part Infinity.

The Blackstone deal looks like new policy: The government subsidizes the largest landlords, helping increase their profits from renting out the same single-family homes that individual homeowners lost to the same financial thugs during the housing foreclosure crisis. The mission of Fannie Mae is to promote home ownership, not to give real estate entrepreneurs a way to limit their losses.

This guarantee was worked out under Obama’s watch, but Blackstone did not make it public until it updated its filing with the SEC this week. The timing is curious. The public disclosure comes after the Trump team is in charge, meaning Obama wouldn’t face criticism, and the Trump Administration will certainly let the deal stand.

This is worse than the government’s gift of TARP to Wall Street. That at least had optics that said it protected Main Street. But, this securitized mortgage market doesn’t involve Main Street, and the market isn’t even in big trouble.

This isn’t a bailout. It’s a grift. The Kleptocracy is now more entrenched than in 2008.

How ironic. Big business gets a sweetheart government deal, while the GOP moves to cut social programs.

Will this add new jobs to the Trump economy?

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Is It Legitimate To Say Trump’s Not Legitimate?

“As our case is new, we must think anew and act anew” – Lincoln

Everybody’s been talking about the dust up between Rep. John Lewis (D-GA) and Donald Trump. Lewis’s statement that Trump is not a legitimate president obviously hit our Overlord-elect in a soft, squishy spot, and he immediately lashed out at Lewis.

Advocates from both sides rushed to defend their guy’s actions. Lots of people are saying “not my president”, which doesn’t necessarily imply illegitimacy as much as disapproval, but many like the sound of saying Trump is illegitimate:

  • There are misguided people who sincerely think that Trump wasn’t elected in a fair election, that votes were somehow stolen from Hillary Clinton, despite the lack of evidence to support that contention.
  • There are others who think the result was unfairly influenced by outside forces ranging from the FBI here at home, to foreign governments, principally Russia. If you believe that FBI Director Comey’s actions were illegitimate, or that Russia intervened, you could conclude that the result may be illegitimate.

But, most think the election results reflect what happened in the voting booth; that the outcome was how people voted, and Trump won according to the rules.

Charles Blow in the NYT defined two types of legitimacy: (brackets by the Wrongologist)

It is true that Donald Trump is, by all measures of the law, the legitimate president-elect and will legitimately be inaugurated our 45th president on Friday…There simply is no constitutional or statutory mechanism to nullify the installation of an elected president based on election influencing, even by a hostile state actor. The framers of the Constitution had no way of anticipating digital warfare being used in a propaganda attack. The Constitution was ratified before electric lights were invented.

But there is another way of considering legitimacy, another test that his election doesn’t meet: That is when legitimacy is defined as “conforming to recognized principles or accepted rules and standards.”

Here, [John] Lewis and his fellow believers are on solid footing.

Trump overreacted to Lewis, saying that John Lewis’s Congressional district is poverty stricken, and all Lewis does is talk, Trump is simply wrong on the facts. Lewis’s district includes a combination of prosperous and less prosperous bits of Atlanta. From Atrios:

But basically this is Trump’s view that all black people live in hellholes and all urban areas not within 15 feet of his golden palace in the sky are hellholes…Which is fine, he’s entitled to his preferences. But 70 years on this Earth and it seems like he’s seen his penthouse, some golf courses, the occasional glance out his limo window, and that’s it, other than 24/7 cable news. Strange life, given his resources.

Charles Blow reminds us: (brackets and emphasis by the Wrongologist)

[Trump is] A lecher attacking a legend; a man of moral depravity attacking a man of moral certitude; an intellectual weakling attacking a warrior for justice…Trump attacks Lewis as, “All talk, talk, talk — no action”; Lewis, who repeatedly thrust his body unto the breach for justice, who was arrested, beaten and terrorized, including during the time that young Trump was at his well-heeled schools, receiving draft deferments from the Vietnam War.

In fact, one of Trump’s five deferments was in 1965, the same year as the Selma marches and “Bloody Sunday,” during which Lewis was struck so violently by a state trooper wielding a billy club that Lewis’s skull was fractured.

Let’s stop focusing on whether the Overlord-elect is “legitimate”.  The important thing is that we now have a president who wants to help Putin destroy the European Union. He wants to dismantle NATO, tear up the Iran Nuclear Agreement, and confront China.

At home, we will lose the ACA. There will be malicious surgery to Medicare, Social Security, and Medicaid. Corporate and personal income taxes (at least for the wealthy) will go down. (In fact, the rash of corporate commitments to build new production facilities in the US may be in anticipation of a corporate tax deal). We may see a Value Added Tax (VAT) of 20%-30% to pay for it all. VAT’s fall disproportionately on the middle and lower classes.

There will be ideologically-driven Supreme Court appointments as well.

It is worth emphasizing that Trump has the most conservative Senate and House since at least 1930. Part of the reason he is dangerous is that the restraint centrist Republicans once placed on Republican Presidents is largely gone.

America’s center and left are so weak, they can’t stand against the programs that conservative Republicans, the Tea Party and the alt-right coalition that will govern us, are now preparing.

The question shouldn’t be whether Trump was elected legitimately, that ship has sailed.

But how will we derail his program?

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Saturday Soother, January 7, 2017

Happy Birthday today Kelly!! Other than that happy fact, little went right in America this week. Our Overlord, Donald I, rode to a presidential win by saying he would bring jobs back to America that have been lost to automation and offshoring by US companies.

But economists have said for years that creating jobs for low skilled Americans will be difficult. Here is further evidence that bringing back jobs may be tougher than Trump thinks. Salon reports that for men ages 25 to 54, the work statistics are poor:

For this group, labor force participation has sunk to 88.5% from a 1954 peak of 97.9%. Most of that loss has occurred among men who have a high school degree or less, according to a report this year by the Obama administration.

And there are interesting facts to consider where unemployed men are concerned. The NYT’s Upshot reports that the jobs that have been disappearing, like machine operator, are predominantly those that men do, while the occupations that are growing, employ mostly women. More from Upshot:

Of the fastest-growing jobs, many are various types of health aides, which are about 90% female. When men take these so-called pink-collar jobs, they have more job security and wage growth than in blue-collar work, according to recent research. But they are paid less and feel stigmatized.

Upshot quotes David Autor, an economist at M.I.T.:

The jobs being created are very different than the jobs being eliminated…I’m not worried about whether there will be jobs. I’m very worried about whether there will be jobs for low-educated adults, especially the males, who seem very reluctant to take the new jobs.

The issue is America’s culture of masculinity. Andrew Cherlin, a sociologist and public policy professor at Johns Hopkins says:

Traditional masculinity is standing in the way of working-class men’s employment…We have a cultural lag where our views of masculinity have not caught up to the change in the job market.

Why is it that men can get away with saying that they deserve better than women? Perhaps that is a rhetorical question. After all, we elected Donald Trump, who can get away with anything.

The Salon article had this snippet: (emphasis by the Wrongologist)

Health problems and the opioid epidemic may also be a major barrier to work, according to research by Alan Krueger, a Princeton economist and former Obama adviser. Nearly half of men ages 25 through 54 who are neither working nor looking for work, take pain medication daily.

Some of these men may have been injured on the job and were subsequently laid off. But some may also represent part of the huge increase in opioid use in America. They may be part of the increase in disability cases since the Great Recession: More than 10 million Americans received Social Security disability benefits in 2014 (most recent statistics). Benefits paid to disabled workers totaled $11.4 billion per month nationwide, a substantial increase from the $6.1 billion paid monthly in 2004. The top three states receiving disability benefits are West Virginia, Alabama and Arkansas.

We became this society honestly. Our politicians hold our corporations in high esteem. The corporations repay us by automating most jobs and shipping other jobs overseas. They do this with little or no responsibility to help displaced workers retrain, or find new work. They do this while asking for bigger tax breaks to remain domiciled in the US. They do this while blaming our education system for not providing trained, ready-to-work job entrants at no cost to them.

We just cannot count on them to be good corporate citizens.

Those on pain killers may or may not have disabilities that prevent them from working. But in any case, society does not owe unemployed working age men permanent, high paying manufacturing or mining jobs, despite whatever efforts Trump may make.

It is time for them to adapt.

We need a soother. Here is Grex Vocalis a Norwegian chorus formed in 1971. Grex Vocalis has reached the finals of the BBC contest “Let the Peoples Sing” three times. In this video they are performing “An Irish Blessing” (May the road rise to meet you) written by an American, James E. Moore in 1987, live at the Amadeo RoldĂĄn Theatre in Havana Cuba:

A Norwegian chorus performing an Irish tune, written by an American, in Cuba. That’s gotta be soothing.

For those who read the Wrongologist in email, you can view the video here.

Sample Lyrics:

May the sun make your days bright

May the stars illuminate your nights

May the flowers bloom along your path

Your house stand firm against the storm.

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Wrongo’s Useless 2017 Predictions

“It’s tough to make predictions. Especially about the future.” – Yogi Berra

Since you have already plunged a stake into the heart of 2016, it is time for some predictions about 2017, which most likely, won’t happen. We can expect the following:

  1. There will be more global political and social turmoil:
    1. The EU could collapse. France is a Marine LePen government away from pursuing an exit from the EU, so there would be a Frexit to go along with Brexit.
    2. China’s economy is wobbling, and China’s president Xi has leaned into a populist message:

On this New Year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year…

  1. The US will continue to lose influence globally despite “Mr. Unpredictable” becoming our Orange Overlord: Trump brags about winning when he negotiates. That has been undeniably true in his real estate and name brand licensing. He will find that when the other side doesn’t need access to his brand in order to succeed, he will have to resort to instilling fear. That may work once, but it will not work consistently.
  2. A corollary: Trump arrives in the Oval Office as an overconfident leader, the man with no plan but with a short attention span, and within six months, he will have his first major policy failure. Getting his hand burned will make him more subdued, more conservative and less populist thereafter.
  3. A second corollary: The triumvirate of Russia/Turkey/Iran will elbow the US firmly out of the Fertile Crescent, and secure friendly regimes in Damascus, Baghdad and Tehran. This will push American influence in the Middle East back to just the Gulf States, a weakened Saudi Arabia, and an increasingly isolated Israel.
  4. Domestically, drug abuse, suicide, and general self-destructive behavior will continue to climb and become impossible to ignore.
  5. The Trump stock market rally has already turned into the Santa Selloff. The Dow peaked on December 20 at 19,975, 25 points away from party-hat time. But since then, Dow 20,000 slipped through our fingers like sand. It closed the year at 19,719, down 281 points from 20k.
  6. Regarding the stock market, many people who want to sell stocks waited until 2017 in order to pay lower capital gains tax. Selling in January could lower prices further.
  7. The growing antibiotic resistance to main stream drugs will impact health in the US.

Meta Prediction: It is certain that few Trump voters will get the results they voted for. Some people who voted for Trump have incompatible outcomes in mind, so it’s a virtual guarantee that a sizable minority are going to feel cheated when they fail to get what they were promised.

OTOH, when Trump fails, most of his base will blame anyone but the Donald. The question is, when disillusionment sets in, will the reaction be a turning away, or a doubling down on the anger?

Wrongo thinks anger will win out.

The coming Trump administration will seem like a fractious family outing: Just under half of the family (the “landslide” segment) wanted to go out, but now, the whole family has to go. Those who wanted to stay home will sulk in the back seat while Daddy tells them to stop bitching.

Meanwhile, once we are out of the driveway, it dawns on everyone that Daddy hasn’t decided yet where to go. Everyone pipes up with suggestions, but Daddy again tells everyone to shut up, because it’s his decision alone. There will be the usual “are we there yet?” complaining, some motion sickness and incessant fighting over who is touching whom.

Daddy won’t reveal the destination, but insists everyone will love it once they get there, even those who wanted to stay home, those who wanted to go the beach, and those who wanted to head over the cliff like Thelma and Louise.

Time for our Monday Wake Up Call, “Wake Up Everybody”, originally by Harold Melvin and The Bluenotes, featuring Teddy Pendergrass. Teddy left the group for his solo career after this album.

But, today we will hear and watch John Legend’s cover of the tune, backed by the Roots Band along with Melanie Fiona, and Common. The song is as strong as it was 42 years ago when it was released:

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

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Amazon’s Echo and Personal Privacy

Wrongo’s daughter gave him an Amazon Echo Dot for his birthday. Bob Lefsetz says that Amazon is becoming the new Apple: (brackets by the Wrongologist)

The Echo came with almost no instructions. Simple packaging. Not a work of art, like [Steve] Jobs’ creations, but far from the old Microsoft where there’s so much info you’re inundated.

Simple and slick, particularly when it comes to using Echo to listen to music on Spotify, (assuming that you have Spotify premium) because Alexa eliminates a step. Before the Echo, you navigated your PC or mobile to Spotify’s site, entered the artist or track you wanted to hear in Spotify’s clunky search engine, then waited for the track to pop up, and then clicked on it to play.

With Alexa, you say the name of the track and/or the artist, and tell Alexa you want to hear it on Spotify, and it begins playing. Very nice.

Alexa brought in yuuge sales numbers for Amazon this season. Bloomberg reported:

Sales for Echo speakers based on Alexa’s voice-recognition software were nine times more than the 2015 holiday season…Echo and Echo Dot were the best-selling products across Amazon this year…

Sales were so good that Amazon sold out of its Echo speakers in mid-December. The Echo shortage shows voice-activated assistants have found a strong niche with consumers. Smart home devices in general are booming at the moment and so it the desire for installation services like crestron programming. But there’s a potential dark side to having an Alexa device: Alexa’s job is to listen to you speak, and then recognize and use those data.

This begs the question of whether you should have any expectations of privacy if Alexa is plugged in. If you think this is an academic question, consider that police in Arkansas want to know what an Amazon Echo device may have heard during a murder:

Authorities in Bentonville issued a warrant for Amazon to hand over any audio or records from an Echo belonging to James Andrew Bates. Bates is set to go to trial for first-degree murder for the death of Victor Collins next year.

Sound Orwellian to you? Your hot new Xmas gift may be the Trojan horse that kills your privacy.

Police say Bates had several other discoverable smart devices, including a smart water meter. The water meter shows that 140 gallons of water were used between 1 AM and 3 AM the night Collins was found dead in Bates’ hot tub. The police think all that water was used to wash away evidence of what happened that night.

The data from the water meter, and the request for stored Echo information raise questions about what constitutes individual privacy in the internet of things (IoT). Due to the “always on” nature of the Echo, authorities want any saved audio the speaker may have picked up that night. The Echo is supposed to be only activated by certain words, but it spoke random answers to Wrongo, when not asked a question, if the room it was in was filled with people over the holidays.

What’s more, Echo captures audio and streams it to the cloud when the device hears a wake word, such as “Alexa.” What the owner says are called “utterances” by Amazon, and they are stored in the cloud until a customer deletes them either individually, or all at once.

Why does Amazon save your words? Probably because you can order items from them via the Echo. A record of the sale could be necessary in a dispute.

In the Bates case, Amazon would not provide the police with any information that Bates’ Echo had logged on its servers. It later released a statement:

Amazon will not release customer information without a valid and binding legal demand properly served on us. Amazon objects to overbroad or otherwise inappropriate demands as a matter of course.

So, Amazon just told the Bentonville police and police everywhere what they have to do to get your stored information: Your privacy is in play if you have an Echo, and you get arrested.

We have an expectation of privacy in our homes, but these devices listen to you, they talk to each other, and to companies like Amazon and Spotify, so the challenge to individual privacy seems very clear. Governments from city to federal, will try to develop any information they can about a criminal case. If those data are gleaned from a smart device in your home, it’s just another data point, and it will become your job to make the case that your Constitutional rights were violated.

The Constitutional question is whether the data you generate in your home through internet-connected devices are data that you own at all. Do you share ownership with corporate America?

Does the state have rights to your private information if they say they need it?

Tip: Alexa has a microphone off button. Use it. Its possible that Amazon can’t hear you then.

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