Category: Economic Policy

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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Capitalism Must Be Reformed

The Daily Escape:

Mt. Fuji, Japan at sunset – November, 2018 photo by miles360x

From the Economist:

In 2016, a survey found that more than half of young Americans no longer support capitalism.

One reason that young people have lost faith in capitalism is the exceptional market concentration that has taken place in the US in the past few years. US firms have gotten bigger, often by acquiring their competition. This is true across many markets. Vox reports that: (parenthesis by Wrongo)

Four companies…control 97% of the dry cat food sector: NestlĂ©, J.M. Smucker, Supermarket Brand, and Mars. According to the report, NestlĂ© has a 57% (share of)…the industry, owning brands such as Purina, Fancy Feast, Felix, and Friskies. Altria, Reynolds American, and Imperial have a 92% market share of the cigarette and tobacco manufacturing industry. Anheuser-Busch InBev, MillerCoors, and Constellation have a 75% share of the beer industry. Hillenbrand and Matthews have a 76% share of the coffin and casket manufacturing industry.

On November 26th, the Open Markets Institute, an anti-monopoly think tank, released a data set showing the market share of the largest companies in each industry. Pulling the data together was a challenge, because the FTC halted the collection and publication of industry concentration data in 1981, during the time of Ronald Regan. Now, David Leonhardt of the NYT has turned it into a table:

As you can see, big companies are much more dominant than they were just 15 years ago. More from Leonhardt:

The new corporate behemoths have been very good for their executives and largest shareholders — and bad for almost everyone else. Sooner or later, the companies tend to raise prices. They hold down wages, because where else are workers going to go? They use their resources to sway government policy. Many of our economic ills — like income stagnation and a decline in entrepreneurship — stem partly from corporate gigantism.

Sarah Miller, deputy director of the Open Markets Institute, told Vox: (brackets by Wrongo)

… [When] you go to the store, you see all of these brands, but guess what? They’re all being operated by the same companies…She called the system a scam economy where competition is an illusion, and choice is an illusion.

The primary issue with corporate concentration is its potential to drive up prices. The fewer sellers, the fewer choices consumers have for goods and services, and thus, there is less pressure for the big competitors to hold prices down.

Even if many consumers don’t immediately realize they are victims of concentration, it’s visible when millions of homes only have one internet provider. Or, when four cellphone providers control 98% percent of the market (Verizon, AT&T, T-Mobile, and Sprint). And if the T-Mobile and Sprint merger plan goes through, there will be just three.

Ultimately, monopolies aren’t just an economic problem. They are also a political one. Democrats believe that anti-monopolism can be a political winner. It’s a way to address voters’ anxiety over high drug prices, digital privacy, and low wages.

We have been at this rodeo before. At the start of the 20th century, we broke up monopolies in railways and energy. In 1984, we broke up AT&T, only to see the “Baby Bells” recombine in the 1990s. We’ve simply stopped enforcing our anti-trust laws over the past 40 years.

Meanwhile, the public has been manipulated to believe that ever larger companies are in their best interests. We celebrate the “right” of large corporations to operate in unfettered ways.

But, Econ 101 shows that the trajectory of a monopoly starts with economies of scale, and ends with economies of exploitation. And remember that six corporations own 90% of the media. We won’t hear much about wrongdoing at Amazon from the Washington Post.

The required anti-trust laws are already on the books, but interpretation of them has changed over the years under Republican administrations. Eventually, we will have to break up existing giants, like we did before. One obvious candidate is Amazon, a company that will soon dominate the supply chain and all logistics in the US.

Facebook, which has gobbled up Instagram and WhatsApp, may be another candidate.

America is very late in addressing the negative outcomes of free markets, so there’s no time like the present to begin to Make America Love Small Business Again.

Voters need to push for anti-trust enforcement, which can only be done by the federal government. We have to insist that the protection of citizens is more important than protecting the 1%.

Let’s close with this quote from Louis Brandeis: “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

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A Strategy for 2020 Emerges

The Daily Escape:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They also outnumber the small percentage of persuadable Republican voters.

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

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Saturday Soother – Voter Turnout Edition

The Daily Escape:

Autumn, Blue Ridge Mountains, near Asheville, NC – 2018 photo by RedWhiteTruee

Wrongo guesses that we’ll know Tuesday night whether being an A-hole is a winning strategy for the Donald.

While traveling in Russia, Wrongo finished reading (and recommends) Amor Towle’s “A Gentleman in Moscow”. If you haven’t read it, the story is about a Russian nobleman who is sentenced in 1922 by the Bolsheviks to the equivalent of permanent house arrest in Moscow’s Hotel Metropol. He spends 30+ years living there.

Doesn’t it seem that we have been locked up for the past two years, waiting on the mid-terms? Let’s hope that on Tuesday, the doors will fly open, because we want out. We want a world with fewer lies, with fewer insults, maybe even a return to sanity.

Here’s a thought to launch you into the weekend. Despite Friday’s news about brisk new jobs creation, and the headline unemployment rate being at a 50-year low, MarketWatch reported that just 28% of Americans are financially healthy:

Some 44% of people said their expenses exceeded their income in the past year and they used credit to make ends meet. Another 42% said they have no retirement savings at all.

That’s despite a nine-year-long bull(ish) stock market, and consumer confidence levels nearing record highs. And, there’s more:

The median American household currently holds just $11,700 in savings, according to a recent analysis of Federal Reserve and Federal Deposit Insurance Corp. data by personal-finance site Magnify Money. The top 1% of households in the U.S. by income have a median savings of $1.1 million….The bottom 20% by income have no savings accounts and the second lowest 20% income earners have just $26,450 saved.

Meanwhile, the majority of Americans in a recent survey said their finances have not improved since the 2016 elections. Market Watch quotes Mark Hamrick, senior economic analyst at Bankrate:

All of this is a call to action: We need to make savings, both for retirement and for emergencies a higher priority, so that they aren’t the source of financial regret later in life.

So, all of you politicians who are running on the great economy ought to study up on a few facts, and find a few solutions.

A good start for the rest of us is showing up to vote on, or before next Tuesday.

But Wrongo senses that you’ve had enough, that you need to check out of the news feeds, to stop being carpet-bombed by political ads, and contemplate…nothing. To help you get started on your Saturday Soothing, brew up a large, hot steaming cup of Kenya Konyu coffee, with its sweet, tart and savory notes of dried berries and richly bittersweet flowers ($16.25 for 10 oz.). It comes from Branch Street Coffee Roasters in Youngstown, in the swing state of Ohio.

Since it’s another rainy Saturday in the Northeast, stay indoors and listen to English composer Sir Michael Tippett’s “Concerto for Double String Orchestra”. Here, the Adagio, the middle movement of the Concerto, is played by the Academy of St Martin-in-the-Fields, conducted by Sir Neville Marriner:

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

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Sunday Cartoon Blogging – August 26, 2018

The majority of Americans under 18 live in households that receive “means-tested assistance” from the US government. In 2016, according to the most recent data from the Census Bureau, there were approximately 73,586,000 people under 18 in the United States, and 38,365,000 of them, 52.1%, resided in households in which one or more persons received benefits from a means-tested government program.

Those programs include the Supplemental Nutrition Assistance Program (food stamps), Medicaid, public housing, Supplemental Security Income, the Special Supplemental Nutrition Program for Women, Infants and Children, Temporary Assistance for Needy Families, and the National School Lunch Program.

And when the Census Bureau excluded school lunch programs from its calculations, the percentage of those under 18 who lived in a household receiving means-tested assistance (44.8%), still exceeded the percentage in any other age bracket.

We have now had four straight years: 2013 – 2016, during which a majority of those under 18 lived in a household taking means-tested benefits.

The primary reason for this is that most in this category are single parent households headed by a woman. Many can’t find employment paying a decent wage with some benefits. Many have to choose between full-time work and childcare. Some are working 2-3 part time jobs but still can’t cover their expenses.

But, the economy is good, the stock market is great, so why worry about these banana republic statistics, America? On to cartoons.

Trump sings the Lynyrd Skynyrd song, “What’s That Smell?”

Speak to a Trumpist, and you’ll find a reasonable, fact-driven human being:

Trump tweets about “widespread” killings of white farmers in South Africa. Here’s the truth:

Immigration unmasks the hate:

DeVos shows that she’s a helper:

Mitch reserves his looks of disgust only for Democrats:

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Monday Wake Up Call – August 13, 2018

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

The Daily Escape:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Stay tuned.

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Send Establishment Democrats to the Bench

The Daily Escape:

City Hall Subway Station, NYC – via @themindcircle

We live in disorienting times. Disorienting in that our society, and our values, are in motion. We are no longer anchored by social mores, beliefs, or any shared vision of the future. Our politics are evolving as well. We can’t simply blame Trump, or those who elected him for taking us to this scary place. The bipartisan consensus that’s ruled this country since the 1940s — neoliberal domestic policy, and neoconservative foreign policy ─ no longer produces the same results for our citizens that it has produced since the Eisenhower era.

Establishment Democrats bear some of the blame. And looking forward to the mid-terms and beyond, they have failed to do the simplest work — forming a worldview, then persuading others about their vision, and the steps to achieve it.

We can also blame establishment Republicans, but they have collapsed. The new right is much farther right, more authoritarian, and whiter. And who would have thought they would be the pro-Russia, anti-FBI, anti-DOJ, and (maybe not a complete surprise), the pro-police state party?

History shows that when society turns like this, the establishment parties can disappear, as did the Federalists and the Whig parties. And when one party changes, the other must as well. After Lincoln, neither the Republicans, nor the Democrats, were the same parties.

Perhaps it’s time to take these words in the Constitution to heart:

…to secure these rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed…

Therefore, if the Dems are to win back the hearts and minds of the people, regardless of what the banks and corporations want to do, Government must be the advocate for the People.

That requires that our political parties confront the banks, corporations, military contractors, and the other oversized creatures that feed at the government trough.

Is that something that the establishment Democrats (Wrongo likes calling them the “Caviar Dems”) are willing to do? They used to champion social and economic justice, but not so much today. Today, they follow the same neo-liberal economic policies that Republicans champion.

And with few exceptions, they are as neo-conservative on foreign policy as any Republican.

Republicans have undergone a different mutation. They celebrate the globalized economy, and support the domestic gig economy as a means of growing corporate profits. They still celebrate Christian values, so controlling Supreme Court appointments is their great achievement, along with ruinous tax cuts.

America’s corporate tax revenues are going down, while social and infrastructure costs keep rising. So far, under both parties, government has continued to spend money it doesn’t have. It borrows, and pretends that everything is under control.

Now, after 10 years of economic expansion, we continue to pile up deficits. What’s going to happen in the next recession? The truth is, we are poorer, and weaker, as a country than we think. But few politicians are willing to help us face reality.

We see both Bernie Sanders and Alexandria Ocasio-Cortez, the Democratic nominee for Congress in NY, describe themselves as socialists. But, in fact, that’s not what they are. Merriam-Webster defines socialism as:

Any of various economic and political theories advocating collective, or governmental ownership and administration of the means of production and distribution of goods.

Obviously, they hope to take over the corporate-friendly establishment Democratic Party, but if you call yourself a socialist, then, at a minimum, you need to advocate for government ownership of the means of production, i.e., industry. You’re only a socialist to the extent that you advocate that.

Will Bernie or Alexandria nationalize General Motors, Apple, or ExxonMobil? No.

Even advocating for “Medicare for all,” isn’t socialism. Neither Medicare, nor other single-payer programs like Medicaid, are really socialized medicine. No one is advocating for an actual government takeover of hospitals, or turning doctors into government employees. If they really wanted socialized medicine, their cry would be “VA for all,” not “Medicare for all.”

Sanders and Ocasio-Cortez are social democrats. In a social democracy, individuals and corporations continue to own the capital and the means of production. Wealth remains produced privately.

But taxation, government spending, and regulation of the private sector are much more muscular under social democracy than is the case under today’s neo-liberal economic system.

Joel Pett has a great illustration of the difference between Sanders/Ocasio-Cortez and Republicans:

It’s time for the Dems to change direction. Carry the “Medicare for all” banner proudly. Work to end income inequality. Work to add jobs for the middle class.

Send the establishment Democrats to the bench.

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Monday Wake Up Call – June 4, 2018

The Daily Escape:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Teacher Strikes Are Pointing the Way to Change in 2018

The Daily Escape:

Baltimore Oriole in crab apple tree – 2014 photo by Wrongo

Happy (or unhappy) tax day!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Run on these issues. See what happens.

 

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Saturday Soother – April 14, 2018

The Daily Escape:

Pang Mapha Cave in Thailand – photo by John Spies

We’ve made it to Saturday! This concludes one of the more cacophonous political weeks in quite a while.

Paul Ryan is retiring from Congress, and is taking his signed first editions of Ayn Rand’s books back to Janesville, WI. No need to hold a benefit, Paul has $10 million in campaign funds in the bank, and is likely to land a rainmaker job on Wall Street.

Ryan joins the record number of Republicans who’ve decided against seeking re-election. They’re fleeing the anger directed at them for both their hyper-partisanship, and their inability to do much. It is difficult to overestimate the damage Ryan has done to this country. His devotion to the Republican narrative at the expense of truth hasn’t helped our democracy.

His “deficit reduction” proposals were always frauds. The revenue loss from tax cuts always exceeded any explicit spending cuts, so Ryan’s pretense of fiscal responsibility came entirely from “magic asterisks”: Extra revenue from closing unspecified loopholes, reduced spending from cutting unspecified programs.

Ryan took the helm of the House two and a half years ago, because he was seen as the only Congresscritter who could keep Republicans from fratricide. They had already shut down the government, and toppled their former Speaker, John Boehner.

Ryan leaves with the gaps in the party as evident as ever, but drawn along slightly different lines, with nativists and populists following the lead of President Trump. This hard right faction is pitted against what little remains of Mr. Ryan’s brand of traditional conservatism. But Ryan hewed to all of the Right-wing talking points. He faithfully ran interference for those who tried to turn the middle class into serfs beholden to the 1%. And he was in the NRA’s pocket. Sayonara, Mr. Ryan.

And, despite two days of congressional hearings on Facebook, the image that remains is Mark Zuckerberg trying to explain to people who have no idea of how Facebook works what he’s going to do to fix what they don’t understand.

There was a lot of talk about how to better ensure privacy, how to prevent user data from being provided to advertisers. But that is the business model of Facebook: Advertisers use the data collected by Facebook to present specific consumers with what they’re specifically selling.

It works because users often want to buy exactly what they’re being sold. That’s how Facebook makes money.

Users happily share details about themselves and their lives, and Facebook provides those data to advertisers. Even if it’s a little creepy, advertisers are learning way too much about every Facebook user, and most of Facebook’s users are willing participants in the creepiness.

Facebook certainly shouldn’t be allowed to sell those data to any party running a political operation. But it remains to be seen whether Facebook can effectively self-regulate, or whether Congress is up to the task of regulating that which it knows nearly nothing about…sort of like when they tried to regulate Wall Street.

Most of us can read between the political lines. Ryan’s one accomplishment is a flawed tax cut that will turn out huge budget deficits for years.

Zuckerberg? Well, almost everyone’s on Facebook. And on Facebook, like in Congress, half-truths predominate. Facebook gives you the latest selfie of your friends who are at a dinner that you weren’t invited to. Everybody joins because it’s free, and hundreds of millions of Americans already use it.

So this week, Zuckerberg and Ryan both got out of DC unscathed. Hard to believe that Zuckerberg is the more consequential person.

Anyhow, it’s a warm Saturday in the northeast, and the yardwork beckons. For some procrastinators, so does that final touch-up on the old 1040 form. Before getting to all that, it’s time to settle back and have a tall strong cup of PT Coffee of Topeka, Kansas’s Finca Kilimanjaro / Burundi Process + Ethiopia Process with its tasting notes of Fig, Caramel, and Cedar ($54/16oz.).

Now settle back in a chair where you can watch the birds building their nests, and listen to Jean-Baptiste DuPont play Franz Liszt’s, PrĂ©lude et Fugue sur Bach on the 1889 CavaillĂ©-Coll organ in the Basilica Saint-Sernin in Toulouse, France. Liszt composed this in 1855, as an homage to JS Bach. Note that the organist uses no sheet music:

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

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