Category: Corporatism

Ohio’s Airborne Toxic Event

The Daily Escape:

Roan Mountain, NC – February 2023 photo by Spencer Carter. Roan Mountain has the largest naturally growing gardens of Catawba rhododendrons in the world.

Back on February 3, a Norfolk Southern (NS) train carrying hazardous materials derailed near the town of East Palestine, Ohio. Federal investigators say a mechanical issue with a rail car axle caused the derailment. After several days of underreporting, we now know what happened.

Here are some facts: The derailment included 50 cars, 20 of which carried toxic materials, 14 of those contained vinyl chloride. The subsequent fire burned for three days. Then there was a “controlled release” of poisonous gas. And finally, effects of the poison were felt on locals, their animals, and local waterways.

The axle problem is important since it is the cause of all the hardship in East Palestine. Trains use steel wheels on steel rails because they produce 85+ % less friction than rubber truck tires do on roads. The contact point of a wheel on the rail is about the size of a dime. Compared to trucks, trains are cheaper (4 cents vs 20 cents per ton-mile in the US), and more sustainable: One ton of freight can be moved over 470 miles on a single gallon of diesel fuel.

But sustaining that economic advantage requires the railroads to maintain all that steel in good working order. Otherwise if things go wrong with a train that’s 4.5 miles long, they can go very, very wrong. And reporting seems to indicate that NS didn’t maintain its steel wheels correctly.

Also, the derailed NS train was not classified as a “high-hazard flammable train,” despite its hazardous and flammable cargo. Such a classification would have lowered its speed and affected its route. From Lever News:

“Though the company’s 150-car train in Ohio reportedly burst into 100-foot flames upon derailing — and was transporting materials that triggered a fireball when they were released and incinerated — it was not being regulated as a “high-hazard flammable train,” federal officials told The Lever.”

Apparently when current transportation safety rules were first created, a federal agency sided with industry lobbyists and limited regulations governing the rail transport of hazardous compounds. That decision effectively exempted many trains hauling dangerous materials including the NS train in Ohio, from the “high-hazard” classification and its more stringent safety requirements.

Generally, workers want safety and the bosses want money. Safety requires additional time, more workers, and money. Deregulation contributes to the lack of safety. Using vinyl chloride in a chemistry lab requires safety equipment. Tank cars containing thousands of gallons of it should require more than the government apparently thinks is safe.

Wrongo always looks at the politics in these sorts of industrial disasters because they are usually caused by the economics created by politics.

Given how dangerous these chemicals are, and given how they are used and transported, we have to expect accidents like this to happen. But the government should be able to tell us whether the current accident rate is higher or lower than expected, and if higher, what should be done to correct the problem.

We trust the bureaucrats that make the rules to balance safe operations against the risk of an airborne toxic event like this. Wrongo’s brief look into this one incident doesn’t evidence that kind of trust. It appears that the bureaucrats who make the rules on railroad safety were influenced by the industry and wrote a rule that puts the economics for the railroad industry ahead of public safety.

These issues exist everywhere in the relationship between industry and government. There’s always pressure by the industry on the bureaucrats to deregulate. In a man-made disaster, that can place greater burdens on the communities, like just happened in East Palestine.

This is what the Michael Lewis’s book “The Fifth Risk” is about: People who go to school, get extensive training and then work in obscure corners of the government. Lewis talks about how important these people are, and how for decades they’ve been denigrated, vilified, and ignored, largely by Republicans.

This is another area in which the GOP is awful in a completely lopsided way to Democrats.

The existence of corporations who can impose risks on the rest of us is what happens when there is unequal political power. We need a state with a strong regulatory system to protect us. The state must build regulatory regimes for chemical spills that shift the risks back onto those who create them.

NS in this case, has said that they will be fully responsible for the damages caused in East Palestine.

That’s encouraging, but how does that little town with a population of less than 5,000, or even the state of Ohio hold NS to their word?

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It’s Impossible To Buy A $200k Home Anymore

The Daily Escape:

Mt. Hood sunrise – February 2023 photo by Mitch Schreiber Photography

Happy Valentine’s Day for those who celebrate! If you don’t celebrate, find someone or something to give a little bit of love to.

In all of the hype about the Super Bowl and Rihanna’s halftime show, you may have missed that homes selling for less than $200k have basically disappeared in America.

John Burns, a real estate consultant, reports that they are now 0% of the new home market. They were 40% of the market 10 years ago. Burns also says that $500k+ new homes have grown from 17% of the market to 38% of the market during Covid. He provides this handy chart showing how average home prices have changed since 2010:

At the same time, sales of homes going for $500k or more (red line) have shot up from less than 10% to nearly 40% of the new homes market and represent the largest share of new home sales.

This isn’t great for Millennials looking to buy their first homes, or for retirees who have to downsize. It also explains why many first-time homebuyers are angry.

It’s not only the $200k and under segment that has fallen off a cliff. New homes going for between $200k – $300k now make up just 11% of the total, down from 80% of all new home sales in the year 2000.

Ben Carlson shows Federal Reserve new home price data going back to 2000 that breaks down new homes price points more clearly. He says that those being sold for $750k and up have gone from less than 1% to more than 10% of the market.

A few reasons for the shifts: First, we’re not building enough new houses anymore. Second, we’ve seen changing tastes drive demand toward larger homes, helping move the market to a new floor in home prices. Inflation didn’t help either.

We overbuilt in the 2000s housing bubble, and that led to more than a decade of underbuilding ever since. There was a brief spike during the pandemic housing craze but that has abated with mortgage rates rising so rapidly in the past year.

In 2002-2006, we were building around 120,000 new homes per year. In 2022, it was more like 65,000 units per year. Tastes have changed as well. Houses today are substantially larger than they were in the 1950s, 1960s, and 1970s.

In his book The Fifties, David Halberstam talks about how the housing market played a huge role in the rise of the suburbs following World War II. Then houses were about 1,300 square feet. In the 1970s, the median size of a new home in the US was 1,525 square feet. Today it’s around 2,500 square feet.

Tastes have changed. People want bigger houses. They want open floor plans for entertaining, bigger bedrooms with more bathrooms, and more storage space for all of their stuff.

It’s also true that homebuilders aren’t incentivized to build starter homes anymore. In the 1950s the government helped out the troops and their families. With the GI Bill, the federal government took some of the risk that homebuilders wouldn’t be able to find mortgages for all the new houses they were building.

Local zoning regulations have made it difficult to get approvals to build new homes. So builders have moved upmarket in home size to justify those upfront expenses. Starter homes aren’t as profitable as they once were.

There’s a big change in the buyer’s market as well. The WSJ quotes John Burns: (emphasis by Wrongo)

“You now have permanent capital competing with a young couple trying to buy a house.” Burns estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in.”

The Atlanta Journal-Constitution in an article last week entitled: “American Dream For Rent: Investors elbow out individual home buyers. Metro Atlanta is ground zero for corporate purchases, locking families into renting’. The Journal says a generational housing shortage, inflated construction costs and a surge in consumer demand all contributed to the historic rise in prices.

But there’s little doubt that a flood of cash from institutional investors has exacerbated it. They quote Maura Neill, a realtor in Alpharetta:

“They go after every listing under $500,000…it’s like clockwork…The property gets listed and, sight unseen, they make offers within an hour.”

This is late-stage capitalism at work. Young working couples are increasingly shut out of buying homes. America is failing them. It would be helpful for families to build equity by purchasing homes instead of renting.

Pricing families out of home ownership carries risks to a cohesive society.

We should have a federal tax policy that disincentivizes ownership of multiple single-family homes, by investment funds. The way to remedy this is to steer investors to other assets that don’t directly impact individual welfare to the same degree as single family housing.

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Saturday Soother – January 28, 2023

The Daily Escape:

Outside Mayfield, Utah – January 2023 photo by Robert Stevens

Wrongo read a review of two books on US agriculture in the New York Review of Books. The books are “Perilous Bounty: The Looming Collapse of American Farming and How We Can Prevent It” by Tom Philpott, and “The Farmer’s Lawyer: The North Dakota Nine and the Fight to Save the Family Farm” by Sarah Vogel.

The review is written by Ian Frazier. This gives you an idea of his writing:

“We are eating a big hole in the middle of the Midwest and sucking up California’s ancient aquifers until the land collapses like an empty juice box. The awe that new arrivals from other countries feel when they see the bounty in a US supermarket is an illusion—more like what one might experience when stepping from a cold night into a nice, warm house where they’re burning the furniture. In short, we are plundering the natural sources of our food production and can’t go on this way.”

All of this is Big Agriculture’s doing. Corporate farming controls most of our agriculture, but it’s facing the challenge that American consumers can eat only about 1,500 pounds of food per person per year and the US population is only growing at about a half percent/year. But the investors behind Big Ag want more profit than supplying food to a slowly growing US population. So their strategy is to get Americans to eat more, and to find new foreign markets.

Philpott concentrates on just two of the US’s top food-producing regions: California’s Central Valley and the Iowa-centered Corn Belt.

The CA Central Valley constitutes about half of California’s cropland. Smaller farms concentrate on fruits while the large corporate farms mostly concentrate on nuts. Nuts are a highly profitable crop with low labor costs, but they need enormous amounts of water: To grow a single almond requires about a gallon of water.

Frazier says that almond groves cover about a fifth of the San Joaquin Valley and consume four times as much water as the city of Los Angeles:

“…I eat plenty of nuts myself, including almonds. Looking in the pantry, I see I possess the almond-growing equivalent of a few dozen bathtubfuls of California water.”

Philpott points out that TIAA, a leading provider of financial services owns a 40% stake in Treehouse California Almonds. The Farmland Index, which tracks the performance of agricultural investments, has outperformed the Standard & Poor’s index 11.8% to 9.6% in recent decades.

One problem with California’s Ag dominance is that it takes an increasing share of an increasingly scarce water supply. When irrigation water from snow and rain is scarce, as it has been for decades, farmers pump more of California’s groundwater. Nobody can say when the groundwater will run out because nobody knows how much CA has.

Turning to the Midwest, Frazier points out that the Corn Belt is one and a half times the size of California’s farming acreage. The Corn Belt uses so much fertilizer that it delivers a huge amount of polluted agricultural runoff via the Mississippi down to the Gulf of Mexico. Off of Louisiana, there’s a marine dead zone the size of New Jersey.

Huge companies dominate Midwest farming, from fertilizer and seed manufacturers to large and expensive farm machinery equipment. There is concentration in the companies that buy, process and ship the grain: Three companies: Cargill, Archer Daniels Midland (ADM), and Ingredion control 87% of the US corn market. Four companies: ADM, Bunge, Cargill, and Ag Processing handle 85% of the soybeans.

It is cheaper to raise pork in the US than it is in China because our feed is cheaper. Smithfield is the world’s largest pork producer and is Chinese-owned. AND, the 23 million hogs in Iowa along with Iowa’s other livestock produce as much excrement every year as do 168 million humans.

This data are called “fecal equivalent”. Iowa produces the same amount as the world’s eleven largest cities. Shouldn’t that be on Iowa’s license plate?

But the headline is that mid-sized and small farms are dying. Frazier says that midsize farms are too small to compete with the corporate farms in volume and price. OTOH, they are too big to be supported by the farmers’ outside income. In her book, Sara Vogel says the midsize farm is in danger of going extinct:

“In today’s economy [they] wouldn’t have a prayer.”

Frazier closes by wondering who in agriculture will work to save our environment. He concludes that Big Ag won’t try. A disturbing, but important article.

Time to take a break from politics and economics. It’s also time to ignore that inflation is down and an asteroid narrowly missed the earth. Instead, let’s relax with our Saturday Soother. Readers who are into football will spend their Sunday watching the NFL’s division championship games. That will probably include Wrongo. To kick off our weekend, listen to Alexandra Whittingham and Stephanie Jones perform “Helping Hands” by Sergio Assad. Assad is a Brazilian guitarist. We have featured Whittingham here before, but Jones is new to us:

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China’s Population Declines

The Daily Escape:

Dune Evening Primrose, Anza-Borrego Desert SP, CA – January 2023 photo by Paulette Donnellon

From the NYT:

“The world’s most populous country has reached a pivotal moment: China’s population has begun to shrink, after a steady, years long decline in its birthrate that experts say is irreversible.”

Irreversible. It was the first time that deaths had outnumbered births in China since Mao’s Great Leap Forward.

Feng Wang, Professor of Sociology, UC Irvine agrees: (emphasis by Wrongo)

“As a scholar of Chinese demographics, I know that the figures released by Chinese government on Jan. 17, 2023…. is the onset of what is likely to be a long-term decline. By the end of the century, the Chinese population is expected to shrink by 45%, according to the United Nations. And that is under the assumption that China maintains its current fertility rate of around 1.3 children per couple, which it may not.”

China has tried different policies for years in an effort to delay this moment, first, by loosening a one-child policy and then, by offering financial incentives to encourage families to have more children. Neither policy worked. Now, facing a population decline, coupled with a continuing rise in life expectancy, China’s demographics will have consequences not just for China but possibly for the rest of us.

China’s rise as an economic powerhouse is the result of its becoming the world’s factory floor. That created the world’s largest middle class. It moved hundreds of millions of rural Chinese to urban areas and fueled the spectacular growth of its largest cities. It made China the world’s second-largest economy, and also led to the increase in life expectancy.

Both Feng Wang and the NYT worry that China’s declining population will lead to a time when China will not have enough people of working age to fuel its growth. In the short run, there will be fewer workers to generate future growth in their economy. In the longer run, the costs to maintain an aging, post-work population will become very high (like in the US).

But economies don’t stand still for long. That China has a manufacturing-oriented economy isn’t a negative but a positive in this scenario. China has been moving up the manufacturing value chain for more than 20 years. So they are in a good position to use automation to address increasing labor scarcity and (presumed) rising labor costs.

They could also encourage work after normal retirement age, even if part time, with better wages and job environments. And like other countries facing similar issues, they could encourage immigration.

The US may be closer to China’s fate than we think. The US Census says that: (brackets by Wrongo)

“The U.S. population grew at a slower rate in 2021 than in any other year since the founding of the nation….[growing by]  only 0.1%…”

It looks like we’re on a similar trajectory to China as are many other developed nations. Japan is currently dealing with it. South Korea and Taiwan are currently at a crossroads as both are facing a massive demographic crash. But, both are smaller and more economically developed than China, so they also have options. Much of Europe is looking at the same problem.

The solution would seem to be to allow immigration from the less developed world. But that comes with the likelihood that the newcomers will change our social and cultural norms.  With immigration, our norms will change, and control of the politics in each country is likely to evolve as well.

The alternative to permanent economic growth is to allow the population shrinkage to happen. It’s kind of infuriating that big business and their captured politicians fail to recognize that a shrinking population (within reason) is both essential for our future and a good thing in the long run.

It can be scary: But transitioning from an economic model based on a constant input of young, working people to one where, we create fewer jobs, can work. If we make sure that those jobs are extremely productive.

What is the end game of an ever expanding population and perpetual economic growth for the human race? The world population when Wrongo was born was about 2.3 billion. It’s 3.5 times that today. Since resources are finite, it’s an inescapable conclusion that someday we must shrink the number of people. So why not today?

Sure, we can extend the economic life of certain resources by using new technologies. But if we continue to expand the number of humans on earth, we’ll see a global war for those resources, which will be a catastrophe.

Is a commitment to low population/low economic growth even possible at this late stage of capitalism?

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Monday Wake Up Call, MLK Jr Day – January 16, 2023

The Daily Escape:

It’s MLK day, so let’s talk about a topic that was near to his heart: economic inequality. Since 1980, economic inequality has been increasing between the top 1% and the bottom 90% of Americans. It’s become so great that today, America now faces the same level of economic inequality that existed before the Great Depression.

Here’s a chart from Elise Gould and Jori Sandra of the Economic Policy Institute (EPI) showing the percentage change in annual wages by income group for the last 40 years:

From the EPI article: (emphasis by Wrongo)

“The level of earnings inequality that existed in 1979 could have simply continued…to today. Instead, we have seen a growing concentration of earnings at the…very top of the earnings distribution, while the bottom 90% has experienced meager gains. Wages for the top 1% grew more than seven times fast as wages for the bottom 90% between 1979 and 2021. The top 1% now amasses a record share of total earnings, while the bottom 90% share of earnings has hit a historic low.”

Slow growth in real (inflation-adjusted) hourly wages for the vast majority of workers has been a defining feature of the US labor market for most of the last 40 years. Only for about 10 years after 1979 did workers see consistent positive wage growth: in the tight labor market of the late 1990s and in the five years prior to the pre-pandemic labor market peak in 2019.

While some low-wage workers have experienced high wage gains after America reopened from Covid, the truth is that most haven’t even kept pace with where they were in 1979.

Today is Martin Luther King Day in America. We mostly celebrate Dr. King’s birth rather than acknowledging what he was arguing for when he was killed. His focus at the end was on both economic justice, and voting rights. Perhaps more than any other leader in American history, King could see the different strands of political and social injustice. He was able to tie them together to form a coherent narrative, one that was capable of leveraging dissent for concrete policy change.

Those were the enduring lessons of Dr. King’s life.

There’s less than three months between the observance of King’s birthday and his death. The way each is recognized by politicians reveals the contradictions in his legacy. Most politicians extol the virtues of racial equality, while most ignore King’s criticisms of economic injustice.

From his April 30th speech in Atlanta: (emphasis by the Wrongologist)

“A true revolution of values will…look uneasily on the glaring contrast of poverty and wealth with righteous indignation. It will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries, and say, ‘This is not just’…this business of…injecting poisonous drugs of hate into the veins of peoples normally humane….cannot be reconciled with wisdom, justice, and love. A nation that continues year after year to spend more money on military defense
than on programs of social uplift is approaching spiritual death.”

As the EPI report above shows, over the last four decades, policies promoted by the GOP have reduced the opportunities for most workers to achieve wage growth at rate similar to the top 10%.

Time to wake up America! Develop your narrative, one that fights against economic injustice and for voting rights. Add any other issues that are pertinent to you. Take your narrative to your neighbors. Then work to get out the vote.

To help you wake up, watch “People Get Ready”, a Curtis Mayfield tune that foretold the turning tide in the battle for racial equality. It topped the R&B charts after its 1965 release by The Impressions. It’s been covered by scores of artists, including Bob Dylan, Bruce Springsteen and by Rod Stewart and the late Jeff Beck, who died last week. Early in their careers, in 1969, Beck and Stewart performed together in the Jeff Beck Group. Here’s Beck’s official music video for “People Get Ready” featuring Rod Stewart:

Jeff Beck was one of one as a guitarist. There was no one better. He had the mindset of a jazz musician playing blues rock. His guitar sound wasn’t anything like traditional jazz guitar. He didn’t cut his teeth playing the old jazz standards, but he could improvise something fresh every time. OTOH, Wrongo didn’t love Beck the recording artist.

Rod Stewart has a secret hobby; he builds model trains. He would take his trains on tour with him, requesting an extra room so he could work on them while staying in hotels. Stewart recently unveiled his 1,500 square-foot replica of post-war Chicago and New York railway systems that took him 23 years to build.

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Monday Wake Up Call – December 19, 2022

The Daily Escape:

Skiing Santas at Sunday River Ski Resort, Newry, ME – Dec. 11, 202, AP Photo/Robert F. Bukat

(As we cruise towards Christmas, each day this week we will feature pictures of Santas and/or Christmas trees, along with loopy songs vaguely representative of the season. You’ve been warned.)

The war in Ukraine has once again reminded policy makers of the importance logistics plays in winning on the battlefield. In reading a Defense One post by Marcus Weisgerber, Wrongo learned that demand for weapons by Ukraine — combined with worker shortages, inflation, and other factors — has made it more difficult and more expensive to produce the most in-demand weapons. This describes the current problem:

“The US has sent 13 years’ worth of Stinger production and five years’ worth of Javelin production to Ukraine…”

That’s in 10 months. And a newsletter by CDR Salamander states the overall problem clearly:

“The Ukrainians would have run out of weapons and ammunition months ago if the former Warsaw Pact nations in NATO didn’t empty what inventory they had left of Soviet Era weaponry and the rest of NATO led by the USA didn’t wander the world trying to soak up as much available inventory money could buy. That and the rapid adoption of NATO compatible equipment by the Ukrainians is helping, but that has revealed other problems – who says the West has enough to give?”

It is said that amateur warriors deal in tactics while professional soldiers deal in logistics. Both sides in this war are burning through their weapons stockpiles at unsustainable rates even though the war seems (at least momentarily) to be a stalemate. The US and NATO had little in stockpiled weapons even before the Russo-Ukrainian War, able to mount only a very limited or short war as they did (poorly) in Libya. This has been true for the past 20 years. Now those limitations are out in the open.

US defense spending could rise 10% percent in 2023. A good chunk of the increase is meant to rush weapons to Ukrainian forces fighting the Russian invasion, along with replenishing the US missiles, artillery and other weapons sent to Ukraine.

But the sad truth is that it isn’t clear that US or European defense companies, along with the thousands of small businesses that supply them, can meet this increased demand. There are plenty of reasons, including worker shortages and supply-chain disruptions that have been exacerbated by the pandemic and the global current economic outlook.

And the Pentagon was slow to award contracts to rebuild weapon stockpiles. Those that were awarded quickly had to be fast-tracked by top-level Biden administration officials. And it gets worse. Many defense firms are short-staffed relative to what’s needed to fulfill anticipated Pentagon orders to replace weapons sent to Ukraine. Defense One quotes Raytheon Technologies CEO Greg Hayes:

“The real question is, can we actually build it?….They can appropriate all the money, but…if we take months and months and months to get on contract, that’s months and months of delay.”

Raytheon builds the Stingers that are so depleted.  They are willing to ramp up, but it takes investment and lead time to grow production. More from Hayes:

“We want to be prepared to meet the demand that’s out there….I wish I could snap my fingers and then all of a sudden miraculously, throw a building up and train 500 people [to build them], but it just takes time.”

American business calls this “Lean Manufacturing“.

A final illustration of how a simple part that gets caught in the supply chain becomes a big problem: The Eurasian Times reports that German ammunition manufacturers have warned about delays in receiving cotton linters. They are a necessary component for propelling charges from small guns and artillery. All European ammunition producers depend on China for cotton linters, even though it is a commodity produced and traded globally. The time to get them to Europe has tripled to nine months.

Much like we learned during the height of the pandemic, our supply chain is only as strong as its weakest link. Lean Manufacturing and “Just-in-Time” supply chains drove the prices of imported goods through the roof, but increased demand meant that we still had to wait months to get what we ordered. Have we learned anything?

Like during the pandemic, the Russo-Ukrainian War is sending a clear warning to everyone throughout the West: We need to ramp up production, capacity, and have a more reliable – if somewhat less efficient, supply chain to support our military. This is a hard lesson, because unlike jets, missiles and ships, ammunition and expendables are hidden away in bunkers. And if your governments and diplomats do their job, they will never be used.

However, if/when you need them, like right now, the need is existential. Time to wake up America! We can’t depend on capitalism only to solve our supply chain problems. To help you wake up, take a moment to watch the Foo Fighters, who closed 2017’s Christmas episode of Saturday Night Live with an extended performance of “Everlong” that morphs into a pair of seasonal classics:

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Workin’ On The Railroad

The Daily Escape:

Pikes Peak with Garden of the Gods in foreground, Colorado Springs, CO. View is from the reflection pool at Garden of the Gods Club and Resort – November 2022 photo by John Susan Hoffman

On Monday, Biden called on Congress to prevent a rail workers’ strike. Railroad workers are threatening a nationwide strike on December 9, which could deliver a crippling blow to the American economy. According to the Association of American Railroads, a nationwide rail shutdown could cost more than $2 billion per day. Passenger rail transportation would also stop, disrupting hundreds of thousands of commuters. 

The unions have rejected a tentative agreement that had secured a pay increase of 24% over 5 years for rail workers, but wages don’t appear to be the primary sticking point. The outstanding issue is paid sick leave. The railroad companies have adamantly refused to include any more short-term paid leave. That means rail workers must report to work, even when they are sick, or forfeit their pay.

The essence of the unions’ position is that rail workers must use accrued paid time off (PTO) for their sick time. Actually, they use PTO for ANY days off. They get about 21 days of PTO annually. The rest of their time, including their weekends, is tightly controlled.

The context is that rail workers do not get weekends or holidays off unless they use their PTO. They’re on call 24/7, and if they refuse a shift after a designated (12 hour) rest period, they are docked points. Since the rail carriers have laid off more than a third of their workforce in the past decade, every shift is understaffed, and on most shifts, everyone who is eligible is likely to be called in.

Rail workers have jobs that often require them to be on the road for weeks at a time. From Heather Cox Richardson: (brackets by Wrongo)

“…[the unions]…oppose a new staffing system implemented after 2018, which created record profits for the country’s main rail carriers but cost the industry 40,000 jobs, mainly among the people who actually operate the trains, leading to brutal schedules and dangerous working conditions.”

The Precision Schedule Railroading (PSR) system made trains more efficient by keeping workers on very tight schedules. Any disruption in those schedules, like a family emergency, brought disciplinary action and possible job loss for the worker.

In the US, the 40-hour work week provides on average, 104 weekend days off per year, plus federal holidays. How many American workers would accept the total of 21 days off that most rail workers will accrue in PTO under the now-rejected Tentative Agreement?

The Railway Labor Acts of 1926, 1934 and 1966 control not only railroad labor disputes but also airline labor disputes. There is a series of steps that must be taken by both sides, and the final steps are where a union may strike, and Congress can step in and enact a law codifying an agreement between the companies and the unions.

The US Chamber of Congress and some 400 business groups, representing a wide range of industries, have sent a letter calling on Congress to intervene before the strike deadline if a deal is not reached to “ensure continued rail service.”

You would think that puts Democrats in a bind. They’re pro-union, but in this case, they’re jumping to the tune of big business. And why did Biden make his announcement a week in advance of the possible strike? A good negotiator would create some uncertainty in the minds of both the companies and the unions. There should be at least the appearance of a strike being possible.

Shouldn’t the “most pro-labor president” in a generation (in 1992, he was one of only six Senators to vote against legislation that ended another strike by rail workers), demonstrate that he’s proud to be on the workers’ side, at least until he isn’t?

Congress also has the option to dictate a cooling-off period, allowing parties to continue negotiating until they reach an agreement, or force both sides to enter arbitration, where a third-party mediator gets involved.

The unions knew that Congress would likely intervene. So workers would rather have a bad deal forced on them than to vote for it.

Four paid sick days is nothing. The fact that the rail companies are unwilling even to give four sick days says everything you need to know about American corporations in 2022.

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Thanksgiving Week

The Daily Escape:

Turkeys on the fields of Wrong – November 2018 photo by Wrongo

(This is the last column before Thanksgiving. Words from Wrongo will resume on 11/28.)

Thanksgiving is Wrongo’s favorite holiday. As a secular holiday, you’re not required to do anything. The celebration is subdued, and around here, we focus on gratitude. Wrongo always thinks about how grateful we should be to live in this wonderful country of ours, and how grateful we are for all of America’s gifts.

We’re lucky to live in a land of plenty: Most of us have employment, most have access to quality healthcare. Most of us have a warm place to sleep at night, most have hope for their kids’ future.

There are many of us who do not have those things, and it is our collective responsibility to help them get to a place where they are physically and mentally secure. They need our help. And we know what to do, and we know how  to do it.

This is our 2498th column. Wrongo wants to thank all who have stuck around since the beginning in 2010. He thanks all of you who read it now, and that includes readers in more than 60 countries. Special thanks to long haulers Monty B, Fred VK, David P, Pat M, and Terry McK, among others. Wrongo is very grateful to all of you!

Wrongo’s wish is that you allow yourself to feel gratitude today and share it with those around you. The secret of life is to affect others in a positive way.

We’re truly grateful for those who came before us, and to our family members and friends who we can’t be with today. We’re thankful to those who are on the front lines in military service, or at home in our hospitals, schools, firehouses, and police stations. Happy Thanksgiving!

The NYT has an article about how online gambling companies have gotten their noses under the tents at colleges and universities:

“In order to reap millions of dollars in fees, universities are partnering with betting companies to introduce their students and sports fans to online gambling.”

The Times says that Michigan State University’s athletic department inked a deal with Caesars Sportsbook in 2021. Caesars proposed a deal worth $8.4 million over five years. Michigan signed on the line. Other schools have also struck deals to bring betting to campus. More from the NYT:

“After Louisiana State University signed a similar deal in 2021 with Caesars, the university sent an email encouraging recipients — including some students who were under 21 and couldn’t legally gamble — to “place your first bet (and earn your first bonus).”

Since the Supreme Court’s decision in 2018 to let states legalize online betting, gambling companies have been working to convert traditional casino customers, fantasy sports aficionados and players of online games into a new generation of digital gamblers.

And universities, with their captive audience of easy-to-reach students, have emerged as an especially enticing target. So far, at least eight universities have become partners with online sports-betting companies.

And a dozen other universities’ athletic departments and booster clubs have also signed agreements with brick-and-mortar casinos. For example, Turning Stone Resort and Casino is the official resort of Syracuse University’s ‘Cuse Athletics Fund. These gambling partnerships bring in funds that schools can use to sign marquee coaches and build their sports teams.

Wrongo rarely gambles, but he has a mostly lassiez faire attitude about it. He’s skeptical about prohibiting it. But the idea by universities of “let’s introduce our students to online gambling for our profit” sounds, well, wrong. The hypocrisy here is that the sports betting companies are offering “a piece of the action” to schools that not long ago swore that gambling would ruin college sports.

It isn’t exactly the same, but do you recall that back in the 80s, banks introduced credit cards and credit card debt to students? And how did that work out? You can almost imagine hearing: “Want to go double or nothing on those student loans, kid?” The most relevant quote from the NYT is:

“College athletics have become profit maximizing opportunities for athletic directors and coaches.”

Wrongo thinks this has nothing to do with the educational mission of colleges and universities. OTOH, the ol’ ball coach is saying: “Wanna bet”?

Let’s cruise into the holiday by listening  to a tune that is new to Wrongo, Josh Groban’s “Thankful” performed live from his “Noel” album. It’s on point with Wrongo’s thinking about Thanksgiving:

Lyrics:

Somedays we forget
To look around us
Somedays we can’t see
The joy that surrounds us
So caught up inside ourselves
We take when we should give.

So for tonight we pray for
What we know can be.
And on this day we hope for
What we still can’t see.

It’s up to us to be the change
And even though we all can still do more
There’s so much to be thankful for.

Look beyond ourselves
There’s so much sorrow
It’s way too late to say
I’ll cry tomorrow
Each of us must find our truth
It’s so long overdue

So for tonight we pray for
What we know can be
And every day we hope for
What we still can’t see

It’s up to us to be the change
And even though this world needs so much more
There’s so much to be thankful for

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Is “Yellowstone” A Political Show?

The Daily Escape:

Early snow, Zion NP, UT, November 2022 photo by Bob Busund

After friends and many family members said that they really liked the TV show “Yellowstone”, Wrongo and Ms. Right watched the 2-hour season premiere on Paramount on Sunday night to see if we should commit to watching all five seasons.

Wrongo’s hot take is that the show is “The Sopranos” with horses. There’s some family intrigue like on “Succession” but the Logan Roy family isn’t directly responsible for killing people or animals at the volume of Montana’s John Dutton family.

Since its launch in 2018, Yellowstone has become one of TV’s most-watched dramas. January’s fourth-season finale had over 9 million viewers the night it aired. By comparison, HBO’s Succession drew 1.7 million for its third-season finale a few weeks earlier.

From the NYT:

“John Dutton, a Marlboro Man Tony Soprano, runs the Yellowstone Ranch like a quasi-mob. His wranglers, many of them ex-cons, are branded with a “Y” to mark them as his. When they’re not breaking horses, they’re breaking his enemies’ faces (and often one another’s).”

We watched the season-five opener where patriarch John Dutton becomes governor of Montana, basically running on a platform of “Why do I have to do everything myself”? He owns the largest ranch in Montana but feels that the whole world is conspiring against him. Specifically, it’s a cabal of greedy tycoons who want to buy Dutton’s property and build casinos, condos, and ski chalets on it.

So the main fight is between rich, white-collar city folk who have degrees and suits. The Dutton’s hate those people who fly in from California and then get their (relatively) small farms qualified for tax breaks. The Dutton’s enemies are the bankers and lawyers who are part of the scheming to take Dutton land.

It seems that John Dutton is defending his land and way of life from educated, monied outsiders who rarely actually go outside. Since his enemies mostly live on the coasts, the show is a kind of Red vs. Blue allegory.

Yellowstone’s message is that if you live in rural America, other Americans envy you. You have something they want. Even if you are land poor, you’re richer than they are. And they’ll try and take it from you if you let them.

There’s a market reality to that thinking. Nationwide, available farmland is scarce. Last year, values increased by 12.4% to an average price of $3,800 an acre. Elsewhere, the NYT reports that: (emphasis by Wrongo)

“… the supply of land is limited. About 40% of farmland in the United States is rented, most of it owned by landlords who are not actively involved in farming. And the amount of land available for purchase is extremely scant, with less than 1% of farmland sold on the open market annually.”

Both small and beginning farmers are being priced out of farmland. And Bill Gates is the largest owner of farmland in America. Like wealth, land ownership has become concentrated in fewer and fewer hands. And thus, land costs more, resulting in a greater push for more intensive industrial farming techniques to generate higher returns.

One report found that just 1% of the world’s largest farms control 70% of the world’s farmland. And the biggest shift in recent years from small to big farms was in the US. No wonder then, that Yellowstone has a big and loyal audience in America’s heartland. Land is power, land is wealth, and importantly, land remains a way to sort both race and class in America.

Yellowstone is described as a “red-state show”. Based on watching just two hours, Wrongo can see that, but as the NYT says:

“On one level, the appeal of “Yellowstone” is apolitical and as old as TV. It’s a big, trashy, addictive soap about a family business, like “Dallas”

It speaks the language of today’s culture wars with a country accent. We found the family members in Yellowstone both hard to like, or root for, but the show gives them enemies who seem worse. So you can maybe accept the amorality of it.

Wrongo doesn’t see it as a Conservative show in a political sense. The issues Yellowstone raises about land stewardship and big business are relevant, and not just in rural America. But from Wrongo’s limited experience with the show, the plot is more about romance, violence and feuds, along with beautiful horses and Montana scenery.

Dutton’s trying to conserve his family’s land. If you think about it, that’s not something today’s conservatives are at all interested in doing. Developers on the coasts are happy to pave over everything, and very, very few of them are liberals and/or Democrats.

And you don’t have to be politically conservative to want to preserve our natural world.

Will we watch more? Depends on what else is on.

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An Economic Closing Argument for Democrats

The Daily Escape:

Snake River, Grand Teton NP, WY – October 2022 photo by Hilary Bralove

Yesterday, Wrongo said that the Dems should add a focus on inflation and the economy to their closing argument when asking voters to keep them in power. Here’s a suggestion of what that argument might look like from David Doney (@David_Charts on Twitter). Doney draws his stats from the Federal Reserve Economic Data (known as FRED) and the Congressional Budget Office (CBO). Below is an extract from his Twitter feed:

Jobs: More Americans are working than at any time in history: 153 million. The economy now has 500k more jobs than it did before the pandemic. The unemployment rate is 3.5%, the lowest since 1969. With more people working there’s more spending.

Wealth: The bottom half of US households have an average real net worth of $67,200, the highest ever. Under Trump, it was just $34,648. (While Trump gave tax cuts to the wealthy. Biden gave them to the middle and lower class.) Even those in the 50th to 90th percentile are doing better under Biden: average real net worth is now $747,010 vs. $699,530 under Trump. It’s important to remember that these are averages not median net worth numbers, which are lower. Median net worth in the US is $121,700, up 17.6 % from 2016.

Income: Real wages are higher than before the pandemic. Despite what some pundits say, they have outpaced inflation. From February 2020 to last month, wages for production and non-supervisory workers have risen 15.6%, while the Consumer Price Index (CPI) has risen 14.6%. So Americans’ purchasing power is greater today than it was in 2019.

The deficit: Our annual federal budget deficit is 50% lower than it was last year. It was $2.8 trillion in fiscal year 2021 and is $1.4 trillion this year, according to CBO estimates. Government income is up and government spending is down: Revenues are $850 billion (or 21%) higher and spending is $548 billion (or 8%) lower.

This continues the historical pattern of Democratic administrations being more fiscally responsible than Republicans. Yet the GOP’s closing argument includes screaming about Democratic spending which they say caused inflation. They are trying to convince Americans who either don’t read or bother to check facts that it’s the Democrats who spend like crazy. The opposite is true.

The economy: The Gross Domestic Product (GDP) hit an all-time high of $20 trillion in the fourth quarter of 2021, and currently is $19.9 trillion (for the second quarter of this year). The Atlanta Fed thinks GDP will grow 2.8% in the third quarter. So no recession just yet. In fact, Doney reports that the six key indicators that the National Bureau of Economic Research (NBER) uses to decide if we’re in a recession  were all up from June to September.

Health insurance: Biden revived the Obamacare signup campaigns and advertising that Trump had eliminated. And now 92% of Americans (and more than 98% of kids) have health insurance, an all-time high. Before Obamacare, close to 18% of Americans had no health insurance.

There’s no doubt that many Americans are worried about the high prices at the grocery store and at the gas pump. But one reason inflation has increased is because people have more money in their pockets. Americans have $4 trillion more in their bank accounts than they did before the pandemic. So they’re working, earning money, and spending it.

The other factor driving inflation is the consolidation of companies into just a handful of major corporations, and the ability of those corporations to jack up prices. Corporate profits are at a 70-year high, yet American corporations are still raising prices. They’re doing so because there’s so little competition.

Republicans in Congress won’t stop corporate price gouging. And we know the GOP will blame Dems for high federal spending (which, as said above, is down 8% so far vs. last year). But the GOP won’t let the facts get in the way of their bad policies. They’ll use this manufactured crisis, along with refusing to raise the debt ceiling, to try to force Democrats to support cuts to Social Security, Medicare, and other social safety net programs.

As blog reader T. Grosso commented yesterday: (Brackets by Wrongo)

“It is such a good question to ask what the Republicans will do if they gain control. We obviously know the answer. They will block anything and everything that might help people so they can blame Biden for [it in] 2024.”

The Democrats’ closing argument needs to include a strong, populist message. They should be saying that Democrats believe people must come before profits. Dan Pfeiffer reports:

“The folks at Data for Progress tested a series of messages on inflation and found that emphasizing corporate greed was an effective pushback on concerns about inflation.”

OTOH, the inflation and economic message must be carefully crafted. It could backfire with some who have missed the current jobs market and are struggling to pay their bills.

Democrats should acknowledge the pain caused by high prices while pointing out that a strong economy and the Party’s fiscal responsibility are helping many people cope with higher prices today and will help to reduce inflation in the near future.

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