Can US Workers Bridge A Cultural Divide?

The Daily Escape:

Peaks Island, ME – August 2019 photo by Kendall Lavoie. Peaks Island is a popular destination for day trips on the ferry from Portland. As you might expect, it has a small population in winter, tripling in summer, with many more day trip tourists. There is one taxi, a relatively new Ford Flex. It was purchased through donations by townspeople last year.

(Apologies for the sustained period of no reporting, the longest since the Wrongologist’s founding in 2010.)

Wrongo and Ms. Right watched “American Factory” on Netflix last night. The story begins with the closing of a Dayton Ohio GM truck plant in 2008, and the layoff of 2,000 plant workers. Seven years later, Fuyao Glass, a Chinese company that manufactures glass for trucks and automobiles opened in the Dayton factory. Cao Dewang, the Chinese Chairman of the Fuyao Group had a bold idea: Pair American workers with Chinese workers, who are brought to Ohio to train and work alongside their American counterparts.

The former GM workers are initially ecstatic. They’re happy to land a new factory job. Never mind that the closed GM plant was unionized, and paid more than $25 an hour, while Fuyao is non-union, with starting pay of $14 an hour. But, the laid-off people of Dayton are happy to have a new job.

Soon it’s clear that the operating results aren’t meeting Fuyao’s plan. There is an obvious and growing culture divide. First, Chinese workers have no problem working 12+ hours a day and at least six days a week, while the Americans are used to five days in eight-hour shifts.

Second, individual expression is difficult for the Chinese but hardly for Americans. During a seminar for Chinese workers to help them understand American culture, a Chinese manager assures them:

“You can even joke about the president. No one can do anything to you.”

That’s followed by amazed looks.

The movie starts by trying to learn, “will the new plant succeed?” But success has different meanings: Success for the Chinese owner is different from success for the American worker, who only wants to know, “will these be steady jobs?” Success for the management means something different. Can the factory fulfill their orders at the same volume and quality as Fuyao’s Chinese factory? What will it take for the new factory to become profitable?

These different goals, and the pressure to meet them drives the film. As one frustrated Chinese manager complains:

“American workers are difficult, and their output is low. I can’t train them.”

The American view? One fired US manager says:

“You can’t spell Fuyao without FU”.

OTOH, a move to start a union was soundly defeated.

American Factory is really about how culture drives what we expect to get from a job. Everyone wants to get paid, but what the Americans want from a job is different from what the Chinese are looking for. Americans see the job as an extension of self, and a way to earn. The Chinese see the job as part of the company’s drive to succeed. And also as a means for China to succeed.

There is a quite a bit of soul-searching in the film. The soul of the American factory worker, of American manufacturing in general and the future soul of the global economy are at stake. In addition, late in the film, Cao Dewang, the Chinese CEO wonders aloud:

“I don’t know if I’m a contributor or a sinner.”

He’s reflecting on what was lost between his young life in rural China and his later outstanding business success.

But, Cao and his Chinese managers aren’t villains in “American Factory.” It is a nuanced story, although clearly its sympathies are with the American workers. The film raises many issues: How can companies remain competitive in a global economy? Is it worth it to give taxpayer breaks for companies that relocate? Can global companies bridge the culture gaps that occur whenever a firm locates abroad?

Much of the interest in the film is due to its production company, Higher Ground, formed in partnership with Netflix by former President Barack Obama and Michelle Obama. The filmmakers,  Steven Bognar and Julia Reichert began shooting independently in 2015 while Obama was still president.

In closing, note that at its high point, GM’s Dayton plant employed 10,000 people. Fuyao Glass America’s Dayton plant now employs 2,200 Americans and 200 Chinese. They had originally promised 5,000 employees, and received tax incentives to open the plant.

Some of the Chinese have now moved their families to Dayton, and their kids attend Dayton’s public schools.

By adding automation and fully Chinese management, the plant turned a profit in 2018, three years after it opened.

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Current and Future Job Growth Will Be In Cities

The Daily Escape:

Breezewood, PA – 2008 photo by Edward Burtynsky. Each year, 3.5 million passenger vehicles and 1.5 million trucks drive the half-mile Breezewood strip on Route 30. That’s because a law in the 1950s prohibited spending federal funds to connect a free road to a toll road. So, highway planners designed an interchange that routes drivers onto Route 30 for a half-mile.

An interesting article from Market Watch shows how nearly all job growth is in big cities, while rural America is being left behind:

“Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s. But….Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind.”

MarketWatch cites a July 2019 study by McKinsey forecasting that 25 cities that are home to about 30% of Americans will capture about 60% of the job growth between 2017 and 2030, just as they did between 2007 and 2017. In typical McKinsey fashion, they break cities and towns into many categories. Please read the report for full details. Here are their top-line findings about where the largest growth is happening:

  • Twelve mega-cities (and their extended suburbs) top the list: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Francisco and Washington.
  • Another 13 are high-growth hubs in or around smaller cities: Austin, Charlotte, Denver, Las Vegas, Minneapolis, Nashville, Orlando, Portland (Ore.), Raleigh, San Antonio, San Jose, Seattle, and Tampa.
  • Smaller, fast-growing cities and a few privileged rural counties will also add jobs, while vast swaths of the South, Midwest and Plains will lose jobs.
  • The New York metro area, home to 20 million people, added more jobs over the past year than did all of America’s small towns and rural areas, with a population of 46 million people, combined.

McKinsey’s forecast reinforces concerns about persistent economic inequality in America. Inclusive growth is a must, or it is likely that our society will fall apart. The problem: No one, and certainly not Republicans, have a magic wand that will bring back jobs to rural and small-town America.

Anyone who’s been paying attention knows that job growth is mostly occurring in places that vote for Democrats, while the stagnation is mostly in places that vote for Republicans. In 2016, Trump was smart to tailor a pitch to those parts of America, but their situations haven’t improved since his election.

And the divide is getting larger. Over the past year, only 12% of 389 metro areas had any significant job growth, according to an analysis of Bureau of Labor Statistics data by Aaron Sojourner, a former White House economist, now an associate professor at the University of Minnesota:

So, after 17 years of significant and broadly-spread growth, fewer towns and cities are now doing so well. And, of the 47 metros that gained significant numbers of jobs over the past year, 21 were on McKinsey’s top 25 list.

Meanwhile, the regional jobs data from the BLS shows that non-metropolitan areas, which account for 18% of jobs, had just 5% of job growth over the past year.

OTOH, income inequality is greatest in those cities with the highest jobs growth. But, we can’t write off one quarter of the US population simply because they live in low-growth areas. And politically, it’s essential. Rural America is overrepresented politically — we can’t ignore them.

But, what to do? Sanders and Warren have addressed this by trying to raise tax revenues from corporations, and funding free college. They along with others, believe in some form of Medicare-for-all, which could help address the fact that rural America is older, sicker, and poorer than ever before.

Yang proposes a universal basic income of $1,000/month for everyone.

Trump proposes tax cuts for the wealthy, tariffs and weakened environmental regulations, but despite all three, the situation has gotten worse since his election.

McKinsey suggests that communities that are being left behind ought to try almost everything: improved transportation to get residents to jobs, rural broadband, and lifelong job training.

Building consensus about how to address job growth and income inequality is the key to America’s future. This is what the 2020 presidential election should be about.

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Random Tuesday Thoughts

(Wrongo and Ms. Right are away until July 9th visiting our CA family. Expect the next column to be posted then.)

The Daily Escape:

White Sands National Monument, NM – 2019 photo by Bernard-F

#1: Wrongo watched the video of Trump walking across the Korean DMZ. While most foreign policy professionals will have a cranky reaction to the event, it represents progress. Both sides had stopped negotiations and in fact, were not even talking, after Trump walked out of the Hanoi meeting.

Whether it is a breakthrough that leads to a deal remains to be seen. OTOH, Trump took his daughter Ivanka and Tucker Carlson to the DMZ, while sending John Bolton (who he called “Mike”), and Mike Pompeo on to other tasks. Anything that drives the GOP neocons crazy can’t be all bad.

The incoherence of Trump’s global strategy shows itself in extending himself to North Korea, a country that has nuclear weapons, and the means to deliver them. The US has no agreement with NorKo to contain its weapons of mass destruction. We don’t even have a peace agreement after the War that ended in 1953, but we’re talking.

Contrast that with Trump’s walking away from the signed Iranian nuclear deal, which was negotiated to prevent an exact North Korea-type situation from happening. Inexplicable.

#2: Forbes has a very interesting article on new solar power capacity in California:

“Los Angeles Power and Water officials have struck a deal on the largest and cheapest solar + battery-storage project in the world, with a prestige solar battery supplier, at prices that leave fossil fuels in the dust and may relegate nuclear power to the dustbin.”

Cheaper than fossil fuels, the new plant will be built north of LA, in Kern County. LA officials said that it will be the largest and lowest-cost solar and high-capacity battery storage project in the US. When up and running, it will operate at half the estimated cost of power from a new natural gas plant. The plant is expected to deliver its first megawatt by April 2023.

#3: Reuters reports that Trump’s “deal” with China may not be a deal at all. In their article, China warns of long road ahead for deal with US after ice-breaking talks, Reuters quotes the official China Daily, an English-language daily often used by Beijing to put its message out to the rest of the world. It warned there was no guarantee there would ever be a deal: (emphasis by Wrongo)

“Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level.”

#4: Next, it’s that time of year again where Americans camp out for days in order to visit with a pop-up rural clinic nurse. Why? Because we have the most expensive “health care” on earth, and a system absolutely designed to keep it that way:

“They were told to arrive early if they wanted to see a doctor, so Lisa and Stevie Crider left their apartment in rural Tennessee almost 24 hours before the temporary medical clinic was scheduled to open. They packed a plastic bag with what had become their daily essentials after 21 years of marriage: An ice pack for his recurring chest pain. Tylenol for her swollen feet. Peroxide for the abscess in his mouth. Gatorade for her low blood sugar and chronic dehydration.”

A view from the volunteers:

“…a clinic volunteer….patrolled the parking lot late at night and handed out numbers to signify each patient’s place in the line. No. 48 went to a woman having panic attacks from adjacent Meigs County, where the last remaining mental-health provider had just moved away to Nashville. No. 207 went to a man with unmanaged heart disease from Polk County, where the only hospital had gone bankrupt and closed in 2017.”

With Republicans doing everything they can to break the Affordable Care Act, and then refusing to fix it, this is what their actions have caused. Rural hospitals are closing, people in rural counties have no health care. And the GOP tells them to blame Democrats. The reality is that Republicans in these states have cut funding for the programs that kept red state rural clinics and hospitals operating.

#5: Columbia University reported that scientists have discovered a gigantic aquifer of relatively fresh water trapped below the Atlantic Ocean. This undersea aquifer stretches from Massachusetts to New Jersey, extending more or less continuously out about 50 miles to the edge of the continental shelf.

The water was trapped in mile-deep ice 15,000 to 20,000 years ago. When the ice melted, sediments formed huge river deltas on top of the shelf, and fresh water got trapped there. It would have to be desalinated for most uses, but the cost would be much less than processing seawater.

See you next week!

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Monday Wake Up Call – April 8, 2019

The Daily Escape:

Three Brothers, Yosemite NP – February, 2019 photo by mattfloresfoto

Last week, the House of Representatives voted to reauthorize the Violence Against Women Act (VAWA). The reauthorization was opposed by 157 Republicans including four of the thirteen Republican women in the House. The debate turned on provisions in the bill that restrict those convicted of domestic abuse, assault, or stalking from buying or owning a firearm.

You would think that supporting the bill would be a no-brainer, but only 33 House Republicans voted for the bill. The NRA was opposed, warning that a vote in favor of the bill would be reflected in individual Congressperson’s NRA ratings.

The current law has been on the books for 25 years. The original law already prohibits spouses or former spouses convicted of abuse from purchasing a firearm, but an amendment to the bill closed the so-called “boyfriend loophole,” adding unmarried partners to the language. It would also prohibit people convicted of misdemeanor stalking offenses from owning or buying firearms, as well as abusers subject to temporary protective orders.

That all was a bridge too far for the NRA. NRA spokesperson Jennifer Baker:

“The gun control lobby and anti-gun politicians are intentionally politicizing the Violence Against Women Act as a smoke screen to push their gun control agenda…”

The NRA’s objection was that too many violent people would be prevented from owning a gun.

Nancy Pelosi said in a speech on the House floor:

“There should be nothing partisan or political about ending the scourge of domestic violence and sexual assault, which one in three women faces today…”

Is this a good look for Republican lawmakers? We think of the GOP as excellent in controlling the political narrative, but a headline that says “157 House Republicans support violence against women” will leave a mark. It doesn’t help the NRA either. The group can be said to favor gun rights more than they care about protecting women from domestic violence. Another bad look.

It gets worse for both the GOP and the NRA: Think back to the Texas church mass shooting, and remember that the shooter got a gun because the US Air Force never reported his domestic violence court martial conviction — 26 people died.

Common sense is not common. The VAWA has been in place for 25 years, and there has been very little serious opposition until now. The amendment seems reasonable. This may be a case where the NRA lost its ability to think objectively. But, the bill faces an uncertain future. With these new gun control provisions, it is likely to be dead on arrival in the GOP-held Senate.

It’s clear now that the NRA doesn’t care about the problem of domestic violence. All they want is more gun sales.

And the Republicans are right there with them. Their motto should be: Greed, Guns and God.

Time to wake up, America! The GOP’s position against the VAWA demonstrates their bias against women and in favor of the NRA. To help you wake up, Wrongo brings back the Monday rock song feature. Today we hear from Chrissy Hyde of the Pretenders. We present her song “My City is Gone” from her third album, “Learning to Crawl”. It was released 35 years ago in 1984.

The song’s title was chosen because there had already been a song called “Ohio” by Crosby, Stills, Nash and Young:

Some might realize that the bass line in this song is used by the execrable Rush Limbaugh as the music bumper on his radio show. Hyde agreed to let him use it as long as the proceeds were donated to animal rescue.

Sample Lyrics:

I went back to Ohio
But my city was gone
There was no train station
There was no downtown
South Howard had disappeared
All my favorite places
My city had been pulled down
Reduced to parking spaces
A, o, way to go Ohio

Her lyrics could have been a letter sent 35 years ago to the Democrats as a warning about what was happening in the heartland. It was unread, and marked “return to sender”.

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

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Monday Wake Up Call – December 10, 2018

The Daily Escape:

The twin peaks of Ushba, Caucasus Mountains, Georgia – photo by Pflunt

Last week, Bernie Sanders was with Paul Jay on the Real News Network. The discussion was about how growing income inequality isn’t simply unfair. Bernie said:

Concentration of wealth in America causes concentration of political power.

Sanders had spoken at (his wife Jane’s) Sanders Institute in Vermont on Wednesday. In his subsequent interview, Bernie said:

But it is not just that the one tenth of 1 percent owns more wealth than the bottom 90%. They don’t put their wealth underneath their mattresses….They use that wealth to perpetrate, perpetuate their power. And they do that politically. So you have the Koch brothers and a handful of billionaires who pour hundreds of millions of dollars into elections, because the Supreme Court gutted the campaign finance laws…and now allow billionaires quite openly to buy elections.

We all know that wealth equals political power. Sanders gave a great example:

Lloyd Blankfein, the head of Goldman Sachs, came to Congress a few years ago…after the taxpayers of this country bailed them out because of their greed and their illegal behavior…..These guys, after getting bailed out, they come to Congress. They say, you know what we think Congress should do is…cut Social Security, and Medicare, and Medicaid. And by the way, lower corporate tax rates and give more tax breaks to the wealthy. That’s power. That’s chutzpah. We have it all, we can do whatever we want to do.

He closes with this:

My vision is that we have got to have the guts to take on Wall Street, take on the pharmaceutical industry, take on the insurance industry, take on the 1 percent, and create an economy that works for all.

….We’re seeing great young candidates who didn’t wait on line for 20 years to get permission to run, but kind of jumped in and beat some long-term incumbents. They’re saying, hey, I come from the community. I know what’s going on in this community, and I’m going to fight for working people, and I’m not afraid to take on big money…..So a two-part approach…..we need to fight for our agenda. We need to elect candidates from the grassroots who…are going to implement that agenda.

Bernie is the best messenger about our urgent need to reform capitalism.

In a similar vein, Seth Godin wrote last week about what he calls “Linchpin Jobs”. These are jobs that few can do, and which contribute greatly to society. That’s an interesting concept, but Wrongo focused on his apt description of “Cog Jobs”, which anyone can do, and which can be done with little effort, or skills: (emphasis by Wrongo)

Industry offered a deal to the worker:

Here’s a job. We’ll pay you as little as we can get away with while still being able to fill the job. We’ll make sure it’s easy to find people for this job, because we don’t want you to have much in the way of power or influence….In return, you’ll work as little as you can get away with. That’s the only sane way to respond to the role of being a cog.

This is the dilemma that faces low-skilled workers today: They can find work, but they can’t live on what they make at only one job. Clearly, cog-like work doesn’t create nearly as much value as intelligent work, but not everyone can find a linchpin job, they’re rare.

Can the paradigm that concentration of wealth equals concentration of power be shifted? Is Bernie Sanders the next FDR? While Wrongo thinks we need a younger leader to reform capitalism, Bernie is the right messenger for reform. His effectiveness as a messenger is clear when we see that 70% of the American people now support Medicare for All, just two years after his 2016 campaign.

And the message is clear. Without reform, we’ll have to look our grandchildren in the eye, and say we’ve wrecked their future.

Time to wake up America! This is the signal issue of our time. The reform of Capitalism must be at the top of our agenda.

Whomever the Democrats nominate for president in 2020 has to be a person that can start America down the road toward reducing the concentration of both money and power in America.

The choice in 2020 will either be more Trump, or a Democrat.

We shouldn’t select another tepid corporate Democrat. They probably won’t win. If by some chance one wins, we’d have to watch as our society becomes even more unequal for the rest of our lifetimes.

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Can America Learn From France’s Yellow Vest Movement?

The Daily Escape:

Turtlehead Pond, Groton State Forest, VT – October 2018 photo by mattmacphersonphoto

The Yellow Vests have thrown France into turmoil with their protests in recent weeks. They say they want lower taxes, higher salaries, freedom from gnawing financial fear, and a better life.

It’s a uniquely French phenomenon. Every automobile in France is supposed to be equipped with a yellow vest, so that in case of car accident or breakdown, the driver can put it on to ensure visibility and avoid getting run over.

That enabled the wearing of a yellow vest to demonstrate against unpopular government measures to catch on quickly. Most people had one. The symbolism was fitting: in case of an income inequality emergency, show people that you don’t want to be run over.

What set off the protests was a rise in gasoline taxes. But it became immediately clear that much more was driving the protests, that the gasoline tax was the last straw in a long series of measures favoring the rich at the expense of the majority of the population.

That’s why the movement achieved almost instant popularity and support.

The Yellow Vests held their first demonstrations on Saturday, November 17 on the Champs-Elysées in Paris. Most French trade union demonstrations are well organized. People carry banners and listen to speeches from leaders at the end. But, the Yellow Vests showed up without any organization, and no leaders to tell them where to go, or to speak for the crowd’s demands.

They were just there in yellow vests, angry and ready to explain their anger to any listener. Their message was:

We can’t make ends meet. The cost of living keeps going up, and our incomes keep going down. We just can’t take it anymore. The government must stop what it’s doing and change course.

This is another example that income disparity between the rich and rest of us is out of control on a global basis.

The Yellow Vest protesters know that our political systems are controlled by the rich, and by their captured politicians. They are enriching themselves on the backs of the working and middle classes. Interestingly, it was the French economist, Thomas Piketty, who has researched and publicized the fact that the US has the largest income gap of any Western nation.

We should be paying closer attention both to Piketty and the Yellow Vests.

Global corporations and their fellow traveler politicians know that this sort of discontent is infectious, so politicians always try to quell it quickly. If the American 90% got the idea from France, revolution might migrate, as our revolution in 1776 migrated to France in 1789.

It is interesting that the NYT reports that in France, the Yellow Vest protests were totally unanticipated by the government.

We all know that income inequality is a growing global problem, so how can it be that the suffering of a country’s citizens and their protest against the French government’s plan to increase gas taxes would be “totally unanticipated by the parties’’?  Are the powers that be in France completely tone-deaf to the needs of their constituents?

So, are there lessons for America in the Yellow Vest movement? There should be, because the issue here is similar to the issue in France, and elsewhere in Europe. That issue is economic insecurity.

There’s no political will to deal with job insecurity. There’s no mechanism in place for those who can’t pay their bills. Soon, given automation and AI, there will not be enough work available for everyone to support themselves and their families. Underemployed people will still need food, shelter, and health care, so they might start by demonstrating in order to get them.

The sooner our corporate and political leaders decide to work on these problems, the better we all will sleep at night. But, no one in the top 10% of our economic strata has any idea what it is like to go without the necessities; it is simply inconceivable to them.

Many think that there are no consequences to the inequality that has developed in America since 1980, but there certainly will be consequences. We are in the midst of economic class warfare. The politicians, bought by the corporate plutocrats, are pushing their corporatist agenda down the throats of the middle and working classes.

We can either engage in a slow reform of Capitalism, or we can wait another generation, and participate in an urgent, rapid destruction of Capitalism as we know it today.

If we opt to go slow, let’s not kid ourselves. You don’t close a deep wound with a Band-Aid. It takes surgery.

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We’re Too Short to be on This Ride

The Daily Escape:

Lion’s Head, Capetown South Africa, viewed from Tabletop Mountain – 2012 photo by Wrongo

A WaPo report said that Donald Trump discussed giving Janet Yellen another term as head of the Federal Reserve, but was concerned that she was too short. He thought that at 5 feet, 3 inches, she just wasn’t tall enough to get the job done.

Wrongo thinks Yellen’s performance was about the same as her predecessor, Ben Bernanke, and her successor, Jerome Powell. Shouldn’t the real question be: Do we know what’s wrong with our economy, and do we have people in place with enough strength and/or courage to fix it? They can also be short, as long as they have ability and vision.

And it isn’t only in the US: (brackets by Wrongo)

Income inequality has increased in nearly all regions of the world over the past four decades, according to the World Inequality Report 2018. Since 1980, the global top 1% of earners have…[garnered] twice as much of the global growth as have the poorest 50%.

More from the World Inequality Report: (emphasis by Wrongo)

Such acute economic imbalances can lead to political, economic, and social catastrophes if they are not properly monitored and addressed….Governments need to do more to keep society fair…Public services, taxation, social safety nets – all of these have a role to play.

We’re seeing a slow-rolling social catastrophe in the US. We’re seeing alienation across class, race, age and gender. We’re divided as never before, with the possible exception of the pre-Civil War period.

Aren’t we all too short to be on this ride?

Central banks play an integral part in the global economy, and their performance (including the Fed’s) during the 2008 Great Recession was for the most part, admirable.

But central banks can only use monetary policy to partially solve issues of economic inequality. The most robust solutions lie in fiscal policy. Fiscal policy is how Congress and other elected officials influence the economy using spending, taxation and regulation.

Take student loans. Many of our university students are simply being led to the debt gallows. Currently, 44.5 million student loan borrowers in the US owe a total of $1.5 trillion. Student loans are the fastest growing segment of US household debt, seeing almost 157% growth since the Great Recession.

From Bloomberg:

Student loans are being issued at unprecedented rates as more American students pursue higher education. But the cost of tuition at both private and public institutions is touching all-time highs, while interest rates on student loans are also rising. Students are spending more time working instead of studying. (Some 85% of current students now work paid jobs while enrolled.)

Student loan debt has the highest “over 90 days” delinquency rate of all household debt. More than 10% of student borrowers are at least 90 days delinquent. Mortgages and auto loans have a 1.1% and 4% 90-day delinquency rate, respectively,

And if the student loan can’t be repaid, it isn’t expunged by bankruptcy. In fact, students can’t outlive their debt. The feds can garnish social security payments to repay a student’s outstanding debt.

As young adults struggle to pay back their loans, they’re forced to make financial choices that create a drag on the economy. Student debt has delayed marriages. It has led to a decline in home ownership. Sixteen percent of young workers aged 25 to 35 lived with their parents in 2017, up 4% from 10 years earlier.

We are only beginning to understand the social costs of our politics. We are in the midst of a brewing social disaster. And these are self-inflicted wounds, fixable with different government policies. But, most of today’s politicians are too short to get on that ride.

So, how to solve the simultaneous equations of high poverty rates, income inequality and an impending social disaster?

It won’t be easy, and it starts with politicians admitting that our economy doesn’t work for everyone, and that it must be reformed. Then, we can move beyond the tired rallying cries of “more tax cuts” to a capitalism which incorporates a social consciousness that can get people on the track to better paying, and more secure jobs.

An April 2018 study of survey data from 16 European countries found that economic deprivation increased right-wing populist tendencies. Sam van Noort, a co-author of the report said:

Individuals who “feel economically less well-off” were more likely to be attracted by the far right…and radical right respondents are more likely to be male, subjectively poorer, less educated [and] younger.

This will also happen here, unless the voters have determination, and even the short politicians have courage.

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Monday Wake Up Call – December 3, 2018

The Daily Escape:

Boston Public Library – photo by joethommas

The NYT’s David Brooks:

We’re enjoying one of the best economies of our lifetime. The GDP is growing at about 3.5% a year, which is about a point faster than many experts thought possible. We’re in the middle of the second-longest recovery in American history, and if it lasts for another eight months it will be the longest ever.

So everything’s good, no? Not really. More from Brooks: (emphasis by Wrongo)

Researchers with the Gallup-Sharecare Well-Being Index interviewed 160,000 adults in 2017 to ask about their financial security, social relationships, sense of purpose and connectedness to community. Last year turned out to be the worst year for well-being of any since the study began 10 years ago.

And people’s faith in capitalism has declined, especially among the young. Only 45% of those between 18 and 29 see capitalism positively, a lower rate than in 2010.

Brooks’ conclusion? It’s not the economy, we all just need more community connections.

His is another attempt to dress up the now-failing neoliberal economics. Things look good today from some perspectives, but our economy is crushingly cruel from others. Brooks seems to think that millions of Americans are struggling to pay their rent or mortgage, education loans, health care insurance or buy groceries because they have failed to master the art of networking in their neighborhoods.

Alienation is behind the rise of Trumpism, and the rise of populism across the world. In that sense, Brooks is correct, but the leading cause of people’s alienation is economic inequality.

And the leading cause of economic inequality is corporate America’s free rein, supported by their helpmates in Washington. Last week, Wrongo wrote about the exceptional market concentration that has taken place in the US in the past few years. He suggested America needs a revitalized anti-trust initiative. In The Myth of Capitalism, authors Jonathan Tepper and Denise Hearns write:

Capitalism without competition is not capitalism.

For decades, most economists dismissed antitrust actions as superfluous, so long as consumers were not the victims of price-gouging. Monopoly capitalism is back, and it’s harmful, even if a company’s core product (like Google’s and Facebook’s) is free to consumers. As we wrote last week, there’s excessive corporate concentration in most industries, including air travel, banking, beer, health insurance, cell service, and even in the funeral industry.

All of this has led to a huge and growing inequality gap. That means there is little or no economic security for a large and growing section of the American population. People see their communities stagnating, or dying. They feel hopeless, angry, and yes, alienated.

One consequence is that we’ve seen three years of declining life expectancy, linked to growing drug use and suicides. We seem to be on the edge of a social catastrophe.

But our real worry has to be political. People could become so desperate for change that they are willing to do anything to get it. The worry then, is that few vote and a minority elects a strong man populist leader, simply because he/she tells them what they want to hear. That leader can then go out and wreak havoc on our Constitutional Republic.

After that, anything could happen.

Despite what Brooks thinks, we don’t have a crisis of connections. It’s a crisis of poorly paying jobs, job insecurity, and poverty. When people look at their economic prospects, they despair for their children. Doesn’t it matter that in America, health care, education, and transportation all lag behind other developed countries?

The unbridled ideology of free markets is the enemy. Our problem isn’t that individual entrepreneurs went out and took all the gains for themselves, leaving the rest of us holding the bag. It’s more about how neoliberal economics is used both by government and corporations to justify an anti-tax and anti-trust approach that has led to extreme wealth and income concentration in the top 1% of Americans.

The reality is that the nation’s wealth has become the exclusive property of the already prosperous.

We need to wake up America! We have to stop for a second, and think about how we can dig out of this mess. When America bought in to FDR’s New Deal programs 75 years ago, we entered an era we now think back on nostalgically as “great”.

And it isn’t enough to talk about how we can look to Sweden or Norway as economic models. Both have populations of under 10 million, and our society is far less homogeneous than theirs.

We need a uniquely American solution to this problem. It will involve reforming capitalism, starting with tax reform, and enforcing anti-trust legislation.

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Saturday Soother – December 1, 2018

The Daily Escape:

Yukon Grizzly before hibernation – 2014 photo by Paul Nicklen

Quite the week. We had barely digested Thanksgiving dinner when we heard about Russia seizing three Ukrainian Navy vessels in the Azov Sea. We learned that Paul Manafort lied to Robert Mueller, and that his lawyer reported everything that occurred between Manafort and Mueller to the White House. Then, we heard that Trump’s former in-house lawyer, Michael Cohen has admitted to lying to Congress, and is now cooperating with Mueller. Who knows what it all means?

But, the big story this week was that we learned that life expectancy in the US fell to 78.6 years, a 0.3 year decline from our peak. From CNN:

Overdose deaths reached a new high in 2017, topping 70,000, while the suicide rate increased by 3.7%, the CDC’s National Center for Health Statistics reports.

We are witnessing social decay in America. This is consistent with what Angus Deaton and Ann Case called “deaths of despair” in 2017. The WSJ has a detailed breakdown, and also points out how other countries are continuing to show progress:

Data the Centers for Disease Control and Prevention released on Thursday show life expectancy fell by one-tenth of a percent, to 78.6 years, pushed down by the sharpest annual increase in suicides in nearly a decade and a continued rise in deaths from powerful opioid drugs like fentanyl. Influenza, pneumonia and diabetes also factored into last year’s increase.

From Yves Smith:

Americans take antidepressants at a higher rate than any country in the world. The average job tenure is a mere 4.4 years. In my youth, if you changed jobs in less than seven or eight years, you were seen as an opportunist or probably poor performer. The near impossibility of getting a new job if you are over 40 and the fact that outside hot fields, young people can also find it hard to get work commensurate with their education and experience, means that those who do have jobs can be and are exploited by their employers.

The 2017 data paint a dark picture of health and well-being in the US, reflecting the effects of addiction and despair, particularly among young and middle-aged adults. In addition, diseases are plaguing people with limited access to health care.

In the late part of the last century, and the early years of this century, there was a steady decline in heart-disease deaths. That offset a rising number of deaths from drugs and suicide. Now, we’re not seeing those heart-related declines, while drug and suicide deaths occur earlier in life, accounting for more years of life lost.

The worst aspect is that it never had to be this way. These drug and suicide deaths are “collateral damage” caused by the social and economic changes in America since the 1970s.

And we made most of those changes by choice.

Wrongo is reminded that last month, he learned that something similar had happened in Russia under Gorbachev. Under Perestroika, millions of Russians lost jobs. The government’s budget deficits grew. The death rate exceeded the birth rate. Nearly 700,000 children were abandoned by parents who couldn’t afford to take care of them. The average lifespan of men dropped to 59 years.

Are we in a slow motion disaster that could be similar to what Russia went through back in the 1990s?

We’ve become hardened. These American deaths are largely anonymous. When AIDS was ravishing the gay community in the 1980s, people were able to appreciate the huge number of deaths by seeing, or adding to, the AIDS Memorial Quilt, which eventually weighed more than 50 tons.

There is no equivalent recognition for these deaths of despair.

A traitorous American ruling class has sold out its middle and lower classes. If you doubt that, think about Wal-Mart. The Walton’s fortune was made by acting as an agent of Chinese manufacturers, in direct competition with US manufacturers. Doesn’t that seem like treason?

Relax, there’s nothing you can do about all of this today, the first day of December. Time to get what solace you can from a few minutes having a coffee, and a listen to a piece of soothing music.

Start by brewing a cup of Kona Mele Extra Fancy coffee from Hula Daddy Kona Coffee ($64.94/lb.). It has an aroma of dark chocolate, fruit and flowers. And shipping is free.

Now settle back and listen to a few minutes of George Winston’s “December”. Here are Part 1: Snow, Part 2: Midnight, and Part 3: Minstrels:

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

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