What’s
Wrong Today:

“The struggle of man against
power is the struggle of memory against forgetting” – Milan Kundera

Yesterday was the 100th anniversary of the Ludlow Massacre. The Massacre was the result of a strike against the Colorado Fuel & Iron Company (CF&I),
owned by John
D. Rockefeller, Jr., the Rocky Mountain Fuel Company (RMF), and
the Victor-American Fuel Company (VAF).

The strike
resulted in the violent deaths of at least 19 people; reported death tolls vary,
but included two women and eleven children, asphyxiated and burned to death in a
tent that passed for a home. The deaths occurred after a day-long fight between striking
workers and a private militia hired by Rockefeller. The face-off raged on for
14 hours, during which the miners’ tent colony came under machine gun fire. The
tents were ultimately torched by the militia.

According
to the Lawyersgunsandmoney
blog:

Rockefeller
was widely blamed by the public for the deaths. The strike was organized by the
United Mine Workers of America
(UMWA) against coal mining companies in Colorado.

In
retaliation for Ludlow, armed miners attacked dozens of mines over the next ten
days, engaging in several skirmishes with the Colorado National Guard. Estimates
vary, but the entire conflict cost between 69 and 199 lives. It has been
described as the deadliest strike in the history of the US.

The Ludlow
Massacre was a watershed moment in American labor relations. Howard Zinn
in The
Politics of History described the Ludlow Massacre as:

The Ludlow
Massacre quickly evolved into a national rallying cry for labor unions and
eventually helped lead to New Deal labor reforms. But over the years, the
tragedy in Ludlow Colorado has been largely forgotten.

It may seem like ancient history, but in 1913, workers were not
paid for traveling into the mines, shoring up the mine ceilings, or fixing
tools. Many died in mine cave-ins or from disease. Workers lived in
company towns. Moreover, company housing meant that CF&I agents could enter
your home at any time, you had to shop at the company store using company
scrip, and company thugs ruled the camp, firing anyone associated with
unionism.

The United
Mine Workers of America had organized the workers in southern Colorado
throughout the early 1910s, despite significant efforts at repression. The workforce
was comprised of large numbers of Greeks, Mexicans, and Italians, a practice which discouraged communication that might lead to organization.

In 1913,
the union presented their demands to CF&I for basic working and human
rights, including an 8-hour day, the right to choose their own homes and
doctors, a pay raise, and enforcement of mine safety laws to CF&I. The
company rejected them out of hand, and the miners went on strike, and the
Massacre was the result.

The Ludlow Massacre
occurred at the end of the Gilded
Age, a period spanning the final three decades of the nineteenth
century; from the 1870s to 1900. The term comes from a book by Mark Twain, The Gilded Age: A Tale of Today,
satirizing what he believed to be an
era of serious social problems disguised by a thin gilding of gold.

Consider what John
D. Rockefeller Jr. said
to his Colorado miners in 1915 after the anger over the Massacre had died down: (emphasis
by the Wrongologist)

There
you have it, another shining example of capitalist benevolence in action.
Despite the paternalism, every worker right and benefit we have was
literally bought with the blood of union men and women fighting tooth and nail
against overwhelming odds to win them and often dying in the process.

And you
know when private companies stopped killing the strikers? When FEDERAL
GOVERNMENT troops (ordered by President Wilson) stepped in. In the libertarian wet dream world of
Rand Paul and the Koch Brothers, we would be back to 12 hour days, 6 days a
week.

We
could argue whether or not a different approach in the 1870s would have been
better, but in today’s world, the massing of capital that has occurred among multinational
corporations can only be balanced by strong government power, provided that
politicians are willing to use that power. Shrinking government can only be in
the interest of the average citizen if the power of massed capital is reduced to
a point that it is less than the power of government to control it.

In March, the Wrongologist alerted
readers to Thomas Piketty’s book Capitalism
in the 21st Century. Paul Krugman, in his review of Piketty’s book for the NY
Review of Books said:  

A
rising level of capital to total wealth concentrates power, because ownership of capital is always
much more unequally distributed than labor income.

We
have come full circle, entering another “Gilded Age”. The plutocrats, corporatists
and corporations argue for the primacy of capital over people, and many, many of our politicians
support that call.

If politics is about power, then the
powerful will have the advantage. We will see an endless loop of the more
powerful crushing the less powerful, with any
change in the power balance just a random fluke, like what happened after Ludlow catalyzed
real change.

If politics can be about policy,
then truth has an advantage, and progress can happen.

“The greatest power of the mass media
is the power to ignore. The worst thing about this power is that you may not
even know it’s being used” – Sam
Smith

It
is 13 years since 9/11. Since then, our political leaders empowered a national
security state, which brought the loss of much of our personal liberties. Few
Americans noticed the dark consequences of these changes to the law of the land.

And there
was little call for debate in
the main stream media regarding the growing power of the security state. What limited
attention there was did not lead to follow-up by the major networks, or by old-school
print media. That is, until Edward Snowden met with Glenn Greenwald and Laura
Poitras and the story was picked up and followed closely by the Guardian and the Washington Post.

The
newspapers revealed the NSA’s involvement in a dragnet collection of the
phone records of millions of Americans, the creation of software “backdoors”
that allow intelligence agencies to access data held by Facebook and Google.
They reported on the cracking of Internet encryption that is essential to
safeguarding the security of Web users.

Because of the
commitment by both news outlets, the question of the legality of the NSA’s
activities is a front-burner issue around the world.

Congratulations
to both newspapers.

Big Brother apparently can’t watch everything:

That rancher in Nevada isn’t the only deadbeat grazer:

Our dark past reappeared in Kansas:

Republicans put their Easter eggs in one basket:

Not all necessary repairs in Capitol building will be made:

What’s
Wrong Today:

The US and
Europe banked on a successful regime-change in Kiev. But Kiev
has a very weak hand, and may not gain control of the dissident cities in
Eastern Ukraine. In fact, it could devolve into civil war.

This sets up a dilemma for President
Obama. He has made it clear that military
force against Russia’s past and possible future actions in Ukraine are not an
option. But he has also made it clear that the US will stand up for Ukraine.
This has led him to implement some sanctions
that have had impact, while threatening more if Russia continues its Ukraine
land grab.

It is also a
dilemma for President Putin.
Since the time of Catherine
the Great, Russia has looked to be a part of the West. Putin is acting like
Russia is willing to move away from the West and to pursue a very different
course. He seems unconcerned by Russia’s ejection
from the G-8. Moving away from the West toward the third world may be a risky substitute for an ambitious leader bent on making a legacy. 

His
takeover of Crimea and the earlier annexation of South Ossetia from Georgia
show that Putin is willing to remain estranged from the West in order to keep
the “Novy
Russia” dream alive. That may have worked well in the last century, but it is
unlikely to work as effectively today. Here’s why:

In the UK
Telegraph, Ambrose Bierce reports that The US has powerful financial tools
that were developed after 9/11. They are financial sanctions that we have yet
to fully implement against Russia. The strategy relies on the US dollar as the
world’s reserve currency, which gives it control over huge portions of the
global banking system. He quotes Juan Zarate, a US Treasury and White House
official who helped spearhead the development of this policy after 9/11:  

Bierce quotes
Mr. Zarate as saying that the US can go it alone with sanctions if necessary,
so that it may not matter whether the EU continues to drag its feet over Russian
sanctions.

The
stealth weapon is a “scarlet letter”, devised under Section 311 of
the US Patriot Act.
Once a bank is accused of money-laundering or supporting terrorist activities, it
becomes radioactive. This can be a death sentence, even if the bank has no
operations in the US, since most global banks will not knowingly defy US
regulators. They are more likely to sever dealings with the target bank.

This
arsenal was first deployed against Ukraine (of all places) in December, 2002.
Its banks were accused of laundering funds from Russia’s organized crime rings.
Kiev capitulated. Burma, North Cyprus, Belarus and Latvia were all forced to
comply with US requirements. The biggest test was Iran. Then-president Mahmoud
Ahmadinejad said of the US sanctions:

We know
that the sanctions regime brought Iran to the bargaining table, and the
framework for an agreement to stop development of their nuclear weapons program
emerged.  

Russia has
experience with the sanctions program. They saw what was possible when the two
countries were “partners” in the fight against Jihadist terrorism. The
Chinese gained experience in 2005, when the US hit Banco Delta Asia (BDA) in
Macao for serving as a conduit for North Korean commercial piracy. China pulled
the plug. BDA collapsed within two weeks. That experience also caused China to tip off
Washington when Mr. Putin proposed a joint Sino-Russian attack
on Fannie Mae and Freddie Mac bonds in 2008, aiming to precipitate a dollar
crash.

However, Russia
is a formidable enemy. It is the world’s biggest producer of energy with a
$2 trillion economy. It is also tightly linked to the German and East European
economies. New sanctions could start as part of a calibrated escalation,
issuing scarlet letters to the Russian banks that are helping Syria.

This could
graduate to sanctions on Russian defense firms, mineral exports and energy,
culminating in a squeeze on Gazprom should all else fail. From Robert
Kahn at the Council on Foreign Relations:

Russia has
$470 billion of foreign reserves, but they have fallen by at least $35 billion
since the Ukraine crisis began. Moscow cannot easily deploy its reserves in an
economic slump without causing its money supply to shrink, deepening a
recession that as the NY
Times reported yesterday, is almost certainly currently under way. Really harsh sanctions could cause an economic dilemma for Mr. Putin.

Compared
to the EU, the US does relatively little business with Russia. Trade between
the US and Russia amounted to just $40 billion last year, or about 1% of total
US trade. If Russian oil, gas, fertilizer,
plastics, chemicals and related trade shrinks, the US will feel
relatively little pain.

However, Bloomberg/Business
Week reports that if the US targets Russia, it could cause collateral damage for a handful of large US corporations. Boeing relies on titanium from Siberia and has invested
$7 billion in Russia since the early 1990s; the company plans to buy $18
billion of Russian titanium over the coming decades. Exxon Mobil also has
a deep partnership with Rosneft, Russia’s state-owned oil giant. So,
there could be some political fall-out ahead for the Obama administration.

Although
the Obama administration had success
with its sanctions levied against Iran, Russia a different animal. Iran was isolated,
and the crushing sanctions that went into effect in 2012 were a combination of
presidential executive orders, UN resolutions, and acts of Congress. Russia,
however, is the 8th largest economy in the world, and Europe is
dragging its feet on sanctions.

So,
dilemmas abound for both Mr. Putin and Mr. Obama.

Americans who
suggest that we have a duty to help Ukraine should think about our over-zealous
promises to other countries, and how they have undermined our duty to American
citizens. Through our lack of foresight, planning and accountability, we have
wasted our blood and treasure.

The
Chinese and Russians aren’t spilling their soldiers’ blood or wasting money
irresponsibly. So let’s not send our money and kids on what looks like another fool’s
errand, this time in Ukraine.

Hit ’em
with sanctions. Hit ‘em hard.

What’s
Wrong Today:

Events are
overtaking the narrative of the US and Europe propping up a new, West-leaning
government in Ukraine. There is a possibility of a major escalation, well beyond
the current war of words between Russia and the West.

What
should NATO’s response be to a deeper incursion into Ukraine by Russia? What
are the risks to us? Risk assessment begins with the fact that we are supporting
a weak, unstable, but friendly government in Kiev. It abuts the Russian army,
which has articulated a promise to protect Russian nationals abroad in their
military doctrine since the early 1990s.

It
is in our (and NATO’s) interest that this situation not escalate. Ukraine needs
to establish a process for long-term reconciliation with the Russian-speaking
population in Eastern Ukraine to hold off a Russian incursion.

That
may be impossible. Edward
Luttwak, a writer on strategy, believes:

The
Dnieper as a dividing border gives Crimea to Russia including its naval base. A
Dnieper border has the decisive advantage of enclosing a population that
includes many ethnic Russians, many Russian-speaking Ukrainians, and many
Ukrainians who see their future with Moscow because their livelihood depends on
Russian firms or is in Russia itself. The map below shows how the Dnieper
neatly divides Ukraine:

The
US, Europeans and NATO now face a hard choice: Either start a new “cold war” of
non-cooperation with Moscow, or else join in a process of defining a non-failing state out of the current Ukraine,
west of the Dnieper.

Putin
will not be socialized into a policy of acceptable international conduct. He is
an expansionist, and he is willing to use force. How and where will we contain
him? Do we raise the price of military intervention so high that he won’t try this
again?

When the
USSR folded, NATO changed from a
defensive organization to an offensive one, aiming at expanding its power
and reach into the Baltic states of the former Soviet Union. The question today
is, does NATO have a balanced strategy of deterrence and containment for the
current threat posed by Russia in the Baltic? The answer is no.

Russian troops
along Ukraine’s border show no signs of leaving, and Russian President Vladimir
Putin has done little to suggest that Russia’s ambitions stop at Crimea. So, it falls to NATO to
re-evaluate their strategy vis-à-vis Russia. NATO Deputy Secretary General Ambassador Alexander Vershbow said
exactly that in a speech last week:

He also
said that Russia’s actions against Ukraine were a wake-up call for the
Euro-Atlantic community. So, it is clear
that the current series of events were not part of NATO contingency planning,
despite the fact that the triggering events in Ukraine were orchestrated by the West.

However, most believe
NATO will do little to deter Russia. You
don’t have to be a Chicken Hawk Republican to worry that Putin may radically
alter the “facts on the ground” in ways that a strong (or stronger) US/NATO
action could be too late to
head off. So, what should NATO
do? Sean Paul Kelly asks:

The West
gives up its goal of having Ukraine be a part of NATO and Russia allows the
Ukraine to become a neutral republic, similar to Finland. Kelly says the risks
of military involvement far outweigh the rewards of having the Ukraine in the
US orbit.

A hostile Russia
could do great harm to Western interests globally, particularly in Iran and
Syria today, or in China in the future. In short, a permanently hostile and
threatening Russia is not in anyone’s interest, including Ukraine’s.

We need to think clearly about our goals in
Eastern Europe and weigh them against our greater global strategy. This work is not
done by reading a comic book, or watching a summer blockbuster movie, it takes
thinking and planning.

Yet today, 20
years after the end of the Cold War and the disappearance of the Soviet Union, it
is clear that the US has not consolidated any advantage geopolitically,
nor has it used its “peace dividend” productively.

Happily returning
to a Cold War mentality is the path that most of DC and all of the neo-cons
want for America. It will take a very tough-minded President Obama to blunt these
calls for intervention. Our national interest is not threatened in Ukraine; our
interest is in solving this crisis without committing troops and without spending
any more than the $1 billion we have already committed to Ukraine. That will require Europe to come to a consensus about what to do. After all, they are more threatened by Russia, both economically and militarily.

Let’s
start on that path today.

What’s
Wrong Today:

Last week,
the NYT
covered the release of payment data by Medicare to doctors which showed that the
50 physicians who got the most Medicare money in 2012 were ophthalmologists. While
some of that may come from questionable billings, it mostly results from doctors’ incentives to
choose more expensive drugs than necessary. From Bloomberg: (brackets by the Wrongologist)

How does
this work with ophthalmologists? The drug Lucentis is used to treat macular
degeneration, and it cost Medicare almost $2,000 a shot in 2012.

Another drug,
Avastin, which works just as well,
costs about $50. If you were the doctor, playing within a system that pays you 6%
of the drug’s cost, which would you choose? Since Medicare spent nearly $1
billion on Lucentis in 2012, this tells you that most ophthalmologists went
with the expensive drug.

This
problem goes well beyond the decision to use one drug for macular degeneration. Of
the $20 billion Medicare spent on drugs administered by doctors in 2010, 85%
went to the 55 most expensive drugs. In what seems unlikely to be a coincidence,
42 of those drugs also showed an increased use from
2008 to 2010.

Get that?
You’re an ophthalmologist. You see a patient with macular degeneration. You
have two options. One pays you $3. The other pays you $120. Which are you going
to choose?

We’re not
talking about costs to the patients. We’re talking about payments to doctors.
Medicare is going to cover the cost of the drug no matter what (which is also
crazy, since one costs them 3900% more than the other). We’re talking about the
“profit” the physician or practice makes. They get $3 or $120.

Do we
really think that doctors are absolutely not influenced by this?

The
Centers for Medicare & Medicaid Services, (CMS) the agency that runs
Medicare, is required to pay for treatment that a doctor deems medically
necessary, and it lacks the authority
to direct treatment based on cost. All Medicare can do to control costs
is tell doctors the price of what they’re prescribing, as well as the
alternatives. That means, they have almost no power over the choice of drugs.

To remedy some
of this, President Obama’s latest budget proposed lowering the administrative
fee to 3% from 6%. This would save Medicare an estimated $7 billion over 10 years. That’s not chump change. While it is a
step in the right direction, it changes the math to $1.50 for Avastin and $60
for Lucentis, probably not enough to change behavior.

A different
approach would be to impose a dollar cap on doctors’ administrative fees, such
as setting a fixed fee per injection, regardless of drug. Bloomberg suggests
that a better approach would be to adopt the tactics used by private insurers
and use price signals to promote the least expensive drug options:

Even
though some Docs will undoubtedly still try to game the system, all (!) Congress
has to do is authorize Medicare to
negotiate prices. As the country’s #1 buyer of medical equipment and
prescription medications, it’s the easiest, most effective way to rein in
costs.

Doctors
should choose the drug that clinical trials have shown to be the most
effective. When there’s no appreciable difference in effectiveness, they should
choose the cheapest. Since there’s no free lunch and Medicare’s financial
solvency is in doubt, cost must
be taken into consideration. If Lucentis is only marginally more
effective than Avastin (or not at all), then in a world of funding scarcity, Medicare would
be justified in covering only the latter (at a savings of approximately $1900 a
dose).

The question
is, who came up with the dumb idea to pay doctors not in proportion to their
effort or the health outcomes they achieve, but in proportion to the price of
the drug they prescribe?

Think it was Congress?

I was trying to daydream, but my mind kept wandering – Steven Wright

Ahh Spring! The air is getting warm, green has returned to the landscape. Aside from the longer days, which are like a present from Mother Nature, and the return of greenery, days
in the 60+ degree range after such a cold winter make you feel like things are going
to be all right, for a while anyway.

It’s the
difference between thinking about problems while sitting at your desk and
thinking about them at happy hour.

Nevertheless,
there are still things in the world of domestic and global politics, and
political economy that are wrong. And here are a few cartoons to put an
exclamation point on what was wrong this week. 

Equal
pay is all about politics for Republicans:

Steven Colbert inspires right-wing concerns:

Nothing will stop a bad kid with a knife except a good kid with a knife:

Who says doctors won’t take Medicare?

Hillary ducks shoe thrown her way:

Jeb and Hillary plot in same old game:

What’s
Wrong Today:

“Institutions will try to preserve the
problem to which they are the solution.” – Clay
Shirky

Today
we return to a question that dominated this blog in 2012: What kind of country
do you want? The quote above by Clay Shirky, a writer on the
social and economic effects of Internet technologies, is a great place to start.
In a sense, we are defined by the problems we are solving. The Shirky Principle,
describes a co-dependency, in which the entity tends to prolong the problem it
is solving.

This
describes the politics of deadlock
that drives our country today. But, progress demands that we must let go of
the current political process. 

This is
the most fascinating issue of our current time: The fact that electoral strategies have little to do with creating
consensus around ideas. Getting elected and staying elected isn’t just a part of the equation, it IS the equation: These
guys are trying to eke out a living by getting elected, and then by becoming millionaires, if they are not one when they arrive in DC.

Self-perpetuating
polarization is a feature of democracy, designed create and then solve political differences. If there were no differences, resolution wouldn’t be necessary. It
requires opposing candidates for us to choose between, and then our elected
representatives will occasionally vote on contested
legislation.

We need to
develop an entirely new understanding of politicians, parties, and elections,
because what we tell ourselves about our democracy does not mirror reality. Maybe
there’s no politics left and it’s all business.

The Shirky
Principle explains why neither party is interested in attempting to vanquish
the other. This is America, after all — you can barely swing a cat without
hitting someone whose self-interest can be bought for six figures.

In order
to compete with the Republicans financially, the Democrats have to raise equal
amounts of money. There is no way out for the Dems because they need the money to
compete. There is no way out for the Republicans because they need the extremist
voters that push them further away from the mainstream.

Both
parties must keep moving the solutions just beyond their reach to stay in power, and Americans are screwed as a result.

Lawrence
Lessig has an interesting column at the Atlantic
about campaign finance post the Supreme Court’s latest outrage, McCutcheon v. FEC, which struck down
aggregate limits on campaign contributions. He asks; What can we do to take control of
our government back from entrenched interests? Are Americans even interested in
doing so? Lessig quotes a July 2012 survey by the Clarus Research Group that asked this question:

80% of
people surveyed said they thought that reforms were only self-serving, designed
only to “help current members of Congress get re-elected.”

We are
resigned to the current system precisely because
we view the very process by which we would effect change as corrupt. This
causes us to steer away from the politics of reform, and focus our (dwindling
level of) political attention on other issues instead. The ordinary way we do
politics in America—Democrats yelling at Republicans, Republicans yelling at
Democrats—won’t move this issue, because neither side wants to change the
system under discussion. From Lessig: (brackets by the Wrongologist)

We’ll only get campaign finance reform if the people in Congress or our presidential
candidates ask for it. There are
proposals for fundamental electoral reform, and at least a few (e.g., the Government by the
People Act, or the American Anti-Corruption
Act) that could genuinely change the system, if enacted.

We won’t
get extensive reform though; we’ll get some sort of reform that preserves the
influence of money in politics while reducing the amount of time they have to spend
raising it.

What we
need is to enact legislation that places a hard,
absolute cap on the amount of money that can be spent for/by each candidate.
This would vitiate Citizen’s United
and McCutcheon and create a level
playing field in each race. The cap could vary by level of office sought, from
town councils to governors, to congress, the senate and the presidency.

Passing
legislation based on this idea requires a narrative that Americans will rally behind. The Wrongologist wrote here
about the importance of building a narrative that will convince voters that they
can actually create change:

Most people
in this world are focused on the things directly in front of them, finding the
resources to house, clothe and feed their families, to find jobs and just
survive. But the right narrative can unblock both practical and motivational issues, and can lead to real change.

So, let’s
work on changing how political influence happens.

Let’s
start with a hard cap on all campaign spending by candidate.

What’s
Wrong Today:

The
economy added 192,000 jobs in March. Various pundits made a big deal of the fact that with last
month’s gains, the level of private sector employment was finally back to its
pre-recession peak. But all that means is that we’ve finally climbed out of the hole
that the recession dug in the nation’s payrolls; it’s certainly not enough jobs
to employ the growth in the working-age population over all that time.

And
it took more than six years just to repair the damage, compared with 2-4 years
in the previous three recoveries.

One
of the real tragedies of the recession and our weak jobs recovery is the
enormous number of people who work part-time
for economic reasons. The Bureau of Labor Statistics
(BLS) defines people in this category as:  

A little history: Before the 2001
recession, there were slightly more than 3 million workers in this category. By
September 2003, as the economy recovered, there were 4.84 million. Gradually, most
part-timers got full-time work, and the part-time number headed back down. In
April 2006, the number dropped below 4 million, but edged up again. Since
then, it has not returned to what “normal” meant before the 2001 recession:

When
layoffs soared during
the 2008 financial crisis, some people who kept their jobs were cut to part-time hours.
Then, during the recovery, many of the unemployed found part-time, rather than full-time
jobs. So the number of involuntary part-timers just exploded.

People in the “part-time
for economic reason” category peaked at 9.2 million in March 2010. The number
of part-timers had nearly tripled from the year 2000 and more than doubled from
before the financial crisis.

Since then, it has
been slowly declining, as more part-timers find full-time work. In March, it was at 7.4 million. The headline is that nearly five
years after the end of the recession, there
are still 80% more involuntary part-time workers than there were in 2007, and
130% more than in 2000.

There is clearly a business
logic at work. Companies use economic downturns to prune inefficiencies.
They are also making their workforces more flexible, bringing people in to work
only when absolutely needed. Some part-timers work irregular schedules, and are
kept on stand-by the rest of the time. This keeps the company from having to
include them in health care coverage or from accruing paid vacation time.

Many companies have
outsourced a portion of their staff to staffing agencies who recruit and pay their
workers. It can be a powerful tool to bring payroll expenses down, but it can
wreak havoc on the lives and incomes of workers.

Oh, and it is
terrible for the overall economy.

Back in September
2003, as hiring started to grow after
the previous recession, there were 2.26 million temporary workers out of 130.3 million total nonfarm employees. By June 2006, the number of
temps had jumped 17.8% to 2.66 million. Remember, the number of Part-Time workers today is about 7.4 million.

The chart below shows total non-farm employment and temporary
help employment, indexed to 100 in 2003:  

The chart shows that
temporary jobs dropped earlier, and faster than did total jobs. They
bottomed out at 1.75 million jobs when total employment bottomed out at 129.7
million.  

Since then, Temp jobs
have grown 62.4% from their post-recession low, while total non-farm employment
grew at 6.4% from its low, reaching 137.9 million.

Temp jobs have boomed
for structural reasons, including workforce flexibility and the big savings that accrue to companies on payroll expense and
employee benefits. Some of it is due to the way in which executives are
rewarded. It also explains some of the growth in earnings and share prices for
American firms.

The
other side of earnings growth is steady and relentless wage suppression.
Everyone knows that part timers aren’t worth what permanent workers are
worth. Thus, they have little to no bargaining power. We have seen this in the efforts of fast food workers to organize in the past few months.

There is little hope that this
trend will turn around. Temporary workers will not become full-time
employees in large numbers over the next few years, or indeed, possibly not before the next recession. Given population growth, it is possible that the
number of part-timers will never return to the levels we experienced in 2000.

 

What’s
Wrong Today:

A
few quick notes regarding yesterday’s column about exporting
natural gas. Blog reader and commenter extraordinaire, Terry McKenna said:

Bloomberg
echoed Terry’s worry when Russia invaded Crimea:

So here
comes the manufactured threat by speculators that attempts to boost prices. We’ve been
warned.

As Terry indicates, gas has been a cheap source of energy for us. But,
given the situation in Europe and the push by Republicans to export it, how
much longer will it be cheap?

According
to the CME
Group an energy consultancy, not for long: (emphasis, brackets and
parenthesis by the Wrongologist)

And
wouldn’t that be just grand for the energy industry?

As Terry commented, natural
gas is what is called a stranded asset.
That means it doesn’t travel well or cheaply. Until recently, pipelines were
the only transport method, so exporting was impossible. That changed about 30
years ago, as LNG became more available, and the energy industry began to build
infrastructure for it.

But
the cost of liquefying natural gas is very high. And the entire supply chain
for exporting LNG is expensive to build and maintain. You need to liquefy it,
pipe it into a special, pressurized tanker to transport it to Europe. You need a specialized
facility at the European port to take it off of the tanker and store it, and a
facility to de-liquefy (called re-gasification) the LNG, and distribute in
Europe’s existing pipeline infrastructure.

It
makes the “landed” cost of LNG in Europe very high. That will attract gas
supply to Europe, and thus cause gas prices domestically to increase, as demand
for our available supply will go to overseas buyers who will pay the most. Winter heating costs will go up for those Americans who heat with natural gas.

Now,
liquefying natural gas (LNG) for export sort of works, if there is a cheap
supply (as in Qatar) that doesn’t have to travel very far. But the farther
natural gas goes, the more of it burns off along the way, meaning a portion is
lost to evaporation, which adds to the cost (it also adds to the gasses that cause
climate change).

Even
without converting natural gas into LNG, a little over 8% of US natural gas is used up in processing and getting it to US customers.
Converting it into LNG, exporting it across the ocean (while some more burns
off), and re-gasifying uses up even more of the product.

Perhaps
the best outcome FOR AMERICA would be if virtually none of this natural gas
export capacity ever gets built. If it is really possible to get the natural
gas out of the ground, we need it here instead.

But
that would go against the basic energy policy of the Republicans and the business
media, which is “Drain America First”.

Otherwise,
prepare for higher natural gas prices.

What’s
Wrong Today:

From today’s
NYT:

Where 3,000
workers are building a terminal that will send American natural gas around the
world by the end of next year. By 2017, the facility built by Houston-based Cheniere Energy could handle
roughly a sixth the amount of gas that flows from Russia to Europe every day. But,
50% of this gas is promised to India and South Korea. Not a problem, according
to Condoleezza
Rice in yesterday’s WaPo:

Remember what John
Boehner said in March to the WSJ:

If only
our Republican friends were correct. Here is a Q & A from Gail
Tverberg:

The US Energy
Information Association (EIA) forecasts that by 2017, we will be able to meet America’s
domestic natural gas needs. Below is their chart:
  

Source:
Our Finite World, based on EIA’s
Annual Energy Outlook 2014

“EIA Fut”
means the future forecast of production and construction of production
facilities. OK, so maybe we could
export a little to help our European allies.

Then, Tverberg
asks the $2 question: (emphasis by the Wrongologist)

Tverberg
continues:

So we have
to come to the conclusion that if Republicans and the energy industry have
their way, we could be left with less
than half of current natural gas production for our own needs. And by
2040, natural gas consumption is expected to be 23% higher than in 2013. This,
according to Republicans, would help Europe to work more effectively with us to
blunt Russia’s possible continued aggression in Ukraine.

Here
we go again, listening to Republicans sing the same old tune. US natural gas
companies have been searching for a
rationale for more LNG terminals and found one in the Ukraine crisis.

The
rationale is ideal for the gas companies because politicians can help out by wrapping
themselves in the flag of national security. If these politicians are
successful, there will be more profits for the gas companies and US gas
consumers will face higher prices and more hydraulic fracturing.

This
means Republicans are fine with poisoning our groundwater in order to sell
fracked gas to Europe. Here are some additional questions for your
consideration:

• What
  exactly is in this for non-shareholders (citizens)?

• And
  how is any of this good for the American consumer of energy?

• Why
  must we place the Gulf of Mexico at greater environmental risk to enable Europe
  to avoid Russia?

• Why
  are our natural water aquifers being given away to energy companies to use up
  at will?

The
Republicans continue to placate big business and big finance by enabling them
to export our jobs, machines, know-how, and funding. Essentially, the
Republicans exported our economy, and now ask Democrats; where are the jobs? With
the export of gas we don’t really have, Republicans now want to help big
business export the fuel of our economy, one of our strategic natural
resources.

If
they continue to decimate our economy (and our nation) in so many ways like
pirates stashing their take elsewhere, we should call them traitors.

The US has been an aggressor
in the Middle East for more than 60 years, beginning with deposing a
democratically elected government in Iran, in order to control our sources of energy.

Now that we have something approaching energy self-sufficiency, the Republican plan
is to EXPORT it?