Productivity: Is The Boom Over?

I wish there were more articles on ITT regarding the economy. What has been presented in this one merely skirts the edge of the complex house of cards our economic system has become. Productivity is a significant indicator. But to simply allude to hedge funds and other machinations on Wall Street without examining derivatives and the game being played regarding the dollar’s status as the reserve currency is to fail to address the debt culture that underlies most of our problems.

It seems part of our conundrum is we are all bombarded with such an overload of information in these times that most rarely take time to read subjects over 500 words in length. Unfortunately the dilemmas that confront us have an increasing level of complexity. Most are poorly served by an executive summary format. And so it goes.

Productivity gains and wage gains have not been tied together for at least the last 10 years. The gains in ‘productivity’ have been the source of the widening profit margins of corporations during that period. It doesn’t surprise me that, with many states now passing legislation mandating increases in the minimum wage, ‘productivity’ (i.e., profit gouging at the expense of workers) has taken a minor hit. What surprises me is that In These Times would post an analysis that didn’t recognize this state of affairs for what it is.

Can we please look at ‘indicators’ that have some bearing on the wages and quality of life enjoyed by working people, rather than assuming that what’s good for Exxon (Wal-Mart, Pfizer, Microsoft...) is good for America?

Over or not, productivity certainly has been OVERRATED!

Let’s take a look at two points from the article:

1. Productivity growth… “It measures the value of goods and services produced in an hour of work.”

2. “ While everyone knows that computers and information technology were central in this boom, computers (even PCs) had been around for decades without having any measurable impact on productivity growth.”

What has accounted for the increase/decrease in the productivity numbers? 
To look good, companies, financial gurus, government agencies can simply use a new yardstick.

Official data measuring has changed over the past couple of decades largely due to elastic scales. Hedonics have made equipment values float — if a new piece of equipment cost twice as much out of pocket, but was four times as fast — it “cost” you half as much. (Try banking those savings.)

Comparisons have gone increasingly short term — monthly, yearly, but seldom 10, 20, or thirty years.

How many “Made in U.S.A.” comparisons ignore the subassemblies from foreign facilities?

Since the boss’s secretary can now book flights on the internet, travel agents are eliminated, she also does the company newsletter, Power Point presentations, and a whole list of other new tasks — but who’s measuring her productivity? Compared to what?

With the incentives to leave early many former tasks have disappeared and new ones added with no one to set a benchmark. In even a small to medium size company, who knows? Middle and upper management were the last to learn anything about computers — all they know is what the ads (and “experts” like the Fed) have told them.

In a one person business like mine it was fairly easy to keep track of productivity — After the first ten years of digital versus pre-computers, I found I spent 27.3% more non-billable time at work.

There is no question some processes are faster, some things are better, most are just different.

The biggest downside is the shortfall of those wonderful, new tech jobs people like Thomas Friedman are fond of talking about. Tech induced productivity “allows” (requires) many tasks to be done by many fewer people for far less money.

Remember who used to take care of your phones?  Filled your gas tank? Who does it now?

Another effect of increased productivity is increase unemployment.  If 8 workers can suddenly produce what it used to take 10 workers to make, 2 workers will soon be unemployed.

I don’t have a link handy, but there have been numerous stories that increased productivity due to techonological advances has caused more lost jobs in the US than globalization and outsourcing.  This is a two-edged sword, because the productivity of US workers (largely due to an excellent infrastructure, automation, and other tech advances) is one of the things that keeps higher paid US workers competitive with lower paid workers in developing states.

“Over or not, productivity certainly has been OVERRATED!”

I don’t think so. The time it takes to obtain the necessities of life (shelter, food, clothes, etc) is at a very low point. Folks living in primitive cultures (e.g., the Kombi in West Papua, a stone age level people) spend most of their time working hard to eke out meager existences. Even the “poor” in the US and other developed countries live a materially rich existence compared to how most people lived 100 years ago. I think this is due to extreme increases in productivity - how we raise food, wash clothes, get around, etc etc etc. We are very fortunate to live in times of plenty.

Perhaps the real problem is that expectations grow faster than productivity? No matter how much we have we always want more and better. This is the treadmill that leads to discontent.

Of course, all things change and times like this never last forever. Best to enjoy it while it lasts (and prudent to tread lightly, both as cultures and individuals).

“Another effect of increased productivity is increase unemployment.  If 8 workers can suddenly produce what it used to take 10 workers to make, 2 workers will soon be unemployed.”

The US has a very low rate of unemployment. New jobs are created that often are better than the old ones that go away. No more people making buggy whips, but lots building computers.

That said, the least intelligent of us are having a harder and harder time getting ahead. Being strong, which was very valuable 50-100 years ago is now almost worthless. But this might lead to an adapting population, as people choose mates that are successful and reproduce, passing on desired characteristics.

Wolf,

I seem to recall the two of us having this exchange before. My recent experience (bad) versus your experience (good). We are better off in many ways than 100 years ago, but I maintain we are not as well off in general as thirty or forty years ago—more taxes, fewer benefits, lower quality job prospects. I think the author was writing about even more recent times.

The numbers reliability will decide the outcome. I see the 4.5% number as a real low ball and not just because I live in a rust belt state. Job quality is talked about in positive general terms by government and authors like Friedman, but nobody wants to ask the middle class folks who are truly hurting.

It has already begun to effect the better educated people in accounting, architecture, medicine and those formerly in manufacturing skilled jobs will continue to squeeze down against the unskilled. I know several people of post retirement age like me, who have gone back to work at least part time at jobs they used to do in high school — delivering papers or packing groceries.

I just read today that GM is asking to cut retiree benefits again.

As far as evolution goes, consider that today we (at great expense) rescue and repair babies who would have died a century ago or less. Also, we have 30 years of unwed breeding among the least educated which was encouraged by gov. programs.

Wolf,

Here is an article on the current job market — March 15, 2007.

http://www.cepr.net/index.php?option=com_content&task=view&id=1082&I Itemid=77

Over 40 million U.S. Jobs — 1 in 3 — Pay Low Wages

WTH, you are more right here than the Lone Wolf. That boy is Scorp’s illegitimate son and looks at the world through Limbaughian rose tinted glasses.  Always double the official unemployment rate. As soon as the Lone Wolf gets sacked he will start to agree with you. His kind have to learn everything the hard way. There are certain people you can’t teach anything to. They are trainable but uneducable. From touching the hot stove to going to the ER to extract his pecker from a coke bottle the Lone Wolf has to learn everything though trial and error, mostly the latter in his case. But you are a Saint, WTH, for trying to enlighten him. Unfortunately you’d have more luck with a mule.

Productivity is directly proportional to Hope.

“New jobs are created that often are better than the old ones that go away. No more people making buggy whips, but lots building computers.”

What is Wolf’s idea of ‘better’ jobs? The shift over the last 20 years in the US has been from highly-paid unionized manufacturing jobs with vacation time, health insurance, and retirement benefits to low-wage service jobs with few or no benefits. Those retail clerks (aka ‘sales associates’), Starbucks barristas, hotel and restaurant workers cannot be outsourced, so they’re the jobs that people move into when their factory jobs go to India, China, and Latin America.

Service positions are notoriously impervious to unionization (God bless SIEU for their heroic efforts!) so most service workers have little say in their working conditions and little recourse when unjustly treated. These folks are now the backbone of the US economy, and enable our ‘too busy to cook’ lifestyle, but they aren’t considered worthy of a living wage, so many have two or more jobs to make rent.

As a worker in the retail sector, I’d agree with Wolf that jobs are better now than 100 years ago, but they’re sure a lot worse than they were 50 years ago, or even 25 years ago. We’re headed in the wrong direction.

Until we measure our economic health on the basis of how the majority of people (and especially CHILDREN) live, rather than how much money a few people are making, we are clueless about the actual situation. Which was my objection to the original article.

IMO Productivity has always been the only legitimate way to “earn” more money for any given task.

I mean really EARN it.

Pay as a reward for longevity, as a thank you for loyal service and hard work are “feel good” measures and, while nice, are inflationary and may become seen as entitlements.

When I left my last job (1966) which had a single boss (the studio owner) I knew I was producing twice what he was, but making less than one-third what he was billing me for. His only cost was my per hour cost — I was turned down for a $0.25/hr raise.

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I was essentially self employed already. I received an agreed on hourly rate, but no benefits — I paid my own Social Security (Self Employment Tax), my family heal care, disability and life insurance and had no vacation time or sick days. So I left.

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I continued to keep time cards on all projects so I could measure my actual productivity and raised my per hour charges to maintain the client cost per job. Very simple when only a one person business.

Over the next forty years I continued to be appalled at the amount of time I saw wasted at the companies who were my clients. Chatting around the coffee machine or by managers in meetings, casual phone policies (personal calls), inefficient decision making processes and CYA activity in U.S. business is rampant.

I doubt that most managers have any idea what real productivity levels are in their departments or what real productivity could be. If this is so, how can any outside source (government or private) even have a clue?

Productivity as another economic stat that is sort of just a guess.

We never count the world that is off the legal grid of business. Under the table work, the drug trade, etc.

At a legitimate business, increased productivity can really be nothing but a scam. A worker is told to concentrate on things that reflect productivity and ignore the tasks that don’t count. A retail worker may be told to deal with customers all the time and not clean the display or the number of meetings is decreased or shortened. In other words, non-productive work is given the shaft that results in pumping the productivity stat. I know it happens where I work. I look back five years and tasks we used to do that didn’t count in productivity we do far less, we are getting sloppy truth be told.

The other side of the coin is whether the productivity is the same quality when increased. And I have a sneaky suspicion that we are getting less quality on many goods and services. The goods, well, we don’t even make so many of them any more, and plenty of them are of less quality. The service, I’m not as satisfied by service as I used to be. But the quality factor is ignored in productivity stats.

That’s my two cents worth as others here have named other thoughts I already had.

It may well be the case that heightened productivity growth may make more income available to workers. But that hasn’t been the case. Most recent studies of US productivity growth over the past twenty years or so show that although there is an overall trend towards higher productivity, and GDP growth in general, workers’ incomes are lagging seriously behind such growth. Increased productivity only helps workers’ incomes when there exists suffient political will to make it happen.

cabby,

That day will come when workers can afford to buy more congressmen than CEOs can.

Instead of political willl we have an over abundance of “political won’t”.

Notice how few soloists we have on any issue — the Iraq war, health care, Social Security reform, the economy — everyone joins the chorus, but each wants to direct.

WTH, you sound like a Taylorist. No one can or should be busy all the time nor productivity the end/all & be/all, it’s what the consumers want in the marketplace that is GOD. You can be productive as ll hell but if the product (derivative of “productive") doesn’t sell, the “productivity” is wasted time, effort and money. I’ve had to discipline employees for excessive personal calls, etc., but I realize that no one plug away at the daily grind nonstop. “Political will” has nothing to do with economics, ignore Marxists like Chicago cabbie and since you live in Illinois, stay out of his cab. It’s a menace to the public. Increased productivity only helps if you are producing something enough people want to buy and that has nothing in common with that sick old Judaeo-Christian Protestant Ethic bullshit. I’m reasonably productive but I do other things at work too.
Peachfuzz, we spend too much time focussing on children, I’d rather be with cats. Every goddamn bottle has some childproof cap it takes Charles Atlas to screw off. Children need to be seen and not heard. Not more stolen taxpayer $ but good ass beatings are better here. Have them learn the classics and limit the socializing with their equally ignorant peers. The teacher should be the model of Germanic domination, get rid of progressive ed and phys ed.

I can tell those economists what happened in 1995. That was the year everyone I know started to go online. Email and the internet grew dramatically in use between 1995 and about 2000/2001 when absolutely everyone was online. In 1995, very few people communicated via email, you didn’t submit your articles via email (usually) and you didn’t do most of your research online unless you were with a paper that paid for Nexis/Lexis. There was no Google yet, but the first search engines were starting to appear. I can see the difference it has made in my own work, which I can now complete in half if not a third the time.

Now can I have those clueless economists’ paychecks? As someone pointed out, failing to mention the uncoupling of productivity and wage growth has got to be a factor in there somewhere. People who haven’t had raises in five years become less productive. I’ve seen it happen around me.

How about the demoralization that comes from job and wage uncertainty?  How about exhaustion from working overtime without pay and working several jobs to eke out a living?  How about the frustration of working for people who always want more from you but don’t want to give you anything? 

Wouldn’t those be factors in decreasing productivity?

Carolyn Kay
MakeThemAccountable.com

Anastasia,

The flip side of the coin for your internet theory is that many businesses complain mightily about endless email, the drudgery of finding the important emails amongst the spam and useless stuff. People spend a lot of down time sending around the latest email jokes and crap “important read this” stuff. My wife talks about how much emailing goes on around the office that has absolutely nothing to do with work, as well as surfing the web just for fun. Her boss spends plenty of time on a dating website. And every year about this time I read in the newspaper about how people at work watch the March Madness basketball games on-line and keep up on their brackets while at work.

It’s probably a productivity wash. The Internet can speed things up and also provide reasons to waste time.

Mike,

You never heard anything from me about productivity being more important than customer demand. My only point on productivity is that it is the only reasonable measure for increasing pay for a given job.

There is no single reason why products and services sell and the reasons fluctuate.

Supply and demand are basic, but as you point out producing unwanted items are going to leave you with a large rotting inventory. To sell you must do it at a price the customer is willing to pay for an item he needs or wants, of a quality which is as good or better than your competition.

What I see happening in the U.S. today is merely an extrapolation of what happened to my business, to many of my clients and to my area of the country.

With a confluence of circumstances—

• the end of the Cold War military economy,
• the accessibility of cheap labor,
• the ease and speed of communication,
•the falling quality of many Made in USA products,
• increase in manufacturing and operating costs
(I may have missed some)…

PRICE rapidly became the dominant factor for nearly everything and many goods and services are treated like commodities.

• Cost-cutting hit hard—downsizing, right sizing, out-sourcing became the way larger companies began to avoid union wages, worker benefits, capital outlays.

• Quality at a cheaper price—The quality of the U.S. autos of the 1970s was so bad (I bought a 1973 Pontiac — beautiful, rode fine, due to EPA diddling it didn’t run worth a crap.).

The downward price spiral caused my clients to cut their prices —

•They retiried their most expensive/experienced employees, (my contacts)

• Eliminated “non-productive” items like advertising

• Began relocating to cheap labor sources or selling out to a competitor

Locally, we are now trying competing with the next closest towns for the leftover businesses —

• Offering tax incentives to come here

• Subsidizing airlines to fly from here

• Bribing big box stores to build

• Attempting to sell our vacant stores and factories as condos.

It is pathetic and apparently spreading nation wide.
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Anyone who likes cats can’t be as gruff and tough as you like to pretend. Our oldest, Lizzie, is 19 blind and deaf, but purrs at the slightest touch.  Her purr supply always keeps up with our demand.

I don’t understand why teachers should become the very “model of Germanic domination” and I’m not sure the meaning of the recommendation. BM is a known fascist sympathizer and apologist. Perhaps this puts his statement into some perspective. His contempt for youth, which is something perhaps we all feel at some time, is especially rank. He is a vicious individual. He is also dogmatic and ignorant.  I guess we must suffer his presence here on this and other threads.

Shitcago, I’m a libertarian, not a National Socialist like you or a fascist, fascism being the New Deal Corporate State brand of socialism. Nor have I apologized for revisionism, am a forthright historical revisionist.  I’m not a fan of the Germans but I totally disagree with this hippy dippy 60s nonsense that the teacher learns as much from the students, if that was the case that person should not be teaching. By definition the teacher has to know more, hopefully much more, than the student. The
old German pedagogical method was good because the students had to learn, the classroom was not a political bullsession. And the stupidass ignorance of the untutored young was not respected or tolerated.  And yes, youth IS wasted on the young.
WTH, give my love to Lizzie. The first Clarabelle, a beautiful tort, I got when I was 18 and was 36 when she died, half my life and all of my adult life. The current Clarabelle will be 13 on May 1. As will Jacob and Michelle, I’m guessing in their cases.  I totally agree with you on the all the coercive, eminent domain and other sleazy tactics that Wal-Mart’s uses and some others. Totally opposed to the subsidies for them. Don’t mind tax breaks AS LONG as the tax expenditures don’t exceed them. In places like Berkeley because of the left it takes an act of god to get anyhting built or any new business approved. Advertising is productive but how much so depends on the concretes of any given situation, the left has been spewing this garbage that advertisers are forcing people to buy at some subliminal level. We do have free will. Your right about the low auto quality in the 70s, my 73 Vega lasted 78. Since the 90s auto quality in US cars has dramatically improved though
very expensive. Most of your other points I agree with.
Carolyn, only management employees don’t get OT as I well know !

The Republican Congress and the Bush administration paved the way to allow businesses to make many positions that hadn’t previously been considered management positions exempt from the wage and hour laws.  Millions of people were affected, and no longer receive overtime pay.

And that doesn’t include the situations where management illegally forces people to work overtime without pay.

Carolyn Kay
MakeThemAccountable.com

What situations ? If it’s illegal why aren’t people raising hell ? I’ve heard about the change from nonexempt to exempt but I also heard it was being challenged in courts.

People aren’t raising hell because they need their jobs.  They need their insurance.  They don’t want to lose vesting in their retirement plans.

Laws have been relaxed, and so have regulations.  Enforcement agencies have been starved.  Companies have been advised by the agencies that are supposed to protect workers how to sidestep the laws the do exist.

Republicans call it compassionate conservatism.

Carolyn Kay
MakeThemAccountable.com

BM doesn’t know that labor has no power. The Republican congress isn’t going to listen to a bunch of unskilled low wage workers complain about their lost overtime when big business is lining their pockets with campaign contributions. Even most of organized labor, what’s left of it, is earning pre-tax income below the national median. The real income of the working poor may have increased a bit over time but real value of the median wage today is worth less than it was thirty years ago. Most families in the bottom 80% of society absolutely need two incomes to support a family of four or more. This wasn’t the case years ago. Real median income has declined by over 6% since 2000 while real GDP growth has increased nearly 15% in the same period. Corporate profits as a portion of the national income have also greatly risen in this same period.Inequality is the issue. This is what needs to be addressed.

Your stats are bogus, Chicago, but the point here is that the market determines wages and salaries, not Congress.

Yes, the market determines wages and salaries, Mike, but it’s a rigged market.

Big business pays Congress to depress wages by bringing in skilled labor through special visas, allowing offshoring without any penalty, and allowing millions of unskilled laborers to cross the border.

Are you really as naive as you seem to be?

Carolyn Kay
MakeThemAccountable.com

How is it rigged ? It can’t be under the market as such. If there IS rigging it is due to government intervention that favor some interests at the expense of the rest. Now this is probably true but not across the board. I have read arguments on both sides of the immigration issue. A solution would be to make sure no one who comes here is ever entitled to government assistance and require them to have employment or own property here. Hans Herman-Hoppe was written on this frequently on the lew rockwell.com website. I should warn you that if you are in favor of enforcing the law at the border you will labelled “racist” by the many left-lib nuts on this board. Good luck !

Caro, Mike,

“....it’s a rigged market.” (Caro)

“If there IS rigging it is due to government intervention that favor some interests at the expense of the rest.” (Mike)
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Exactly!  Congress, big business, several presidential administrations, Wall Street gurus, economists, CNBC and a media willing to babble on with whatever it is fed — all continually intervene and promote in their own interests.

All of the above have acted in concert to enact legislation and policies most favorable to a select few. The individual tax breaks get all the controversy and divert attention from the massive moves such as he American Jobs Creation Act of 2004. This single piece of nice sounding congressional action — placated the EEU, (which had complained about US favors to US firms) gave even more favorable tax deals to foreign earnings by US corporations, and had no constraints which would add jobs for of people in the US.

When asked about Halliburton’s move to Dubai last week Senator Durbin and Congressman Manzullo — replied that if this was to avoid taxes it would need to looked into.  Give me a break!

For two decades US employers have been encouraged to cut US payrolls by offshoring operations. The immediate effect on the bottom line boosted share prices and made presidents look good, options for CEOs worth a fortune, and “… gave US consumers cheaper prices.”

Government data distortions and short term comparisons added to the economic data allowing a theoretical surplus under Clinton and talk of a “good economy” under Bush.

Politicians get campaign donations and lobbying jobs (should they somehow be voted out).

Business execs get immense wealth (and write books about how smart they are).

Wall Street gets commissions.

And the media gets to report on how many new billionaires “we” now have and worships at the feet of people like Bill Gates and Jack Welch (all without needing to do any serious investigative reporting).

I actually agree with most of what you posted above, WTH ! Don’t die of shock, please. These types are what Rand called “pull peddlers” in Atlas Shrugged.

Which side are we on?

To paraphrase William Jefferson Clinton, “I guess it depends on which ‘we’ WE is.”

Is it still, “We the people of these United States of America...”?

I’m posting this same commentary on a couple of threads here because they are in a very real way each part of the same national problem — that of deciding just who is the “WE” today.

The issues of productivity, medical care, income inequality are all interrelated. These issues, which greatly matter to millions of us, go unaddressed while congress diddles with high visibility investigations of great interest to the media.

Today I received an email response to a lunch invitation I sent yesterday. My friend will be unable to attend the semi annual gathering of graphics people (mostly retirees) because he will be working.

He’s not quite old enough to collect Social Security and has seven more years before he and his wife are eligible for Medicare. His wife’s brain surgery for a tumor last year boosted his insurance to obscenely high premiums, he lost his last client (a travel agency) in the fall, and has been laying floor tile, painting houses and doing house cleaning to supplement his evaporating business income.

He’s an excellent designer with 30 or 40 years of experience and is a perfect example of trickle down economics. (It is not just the cream that trickles.) Because he was self employed, he is not a part of the employment data, had no unemployment benefits or group insurance.

He’s spent his savings buying computers and software upgrades and learned the new requisite digital techniques. He kept lowering his prices to remain competitive, yet the effects of CEOs offshoring our manufacturing jobs have trickled through to even his non-manufacturing customers.
Now (at age 60 and about 160 lbs) he is a new employee of the federal government and has a walking mail route. But at least he has insurance.

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Just a few moments ago on CNBC I heard the CEO of Blockbuster is NOT going to receive his full $64 million golden parachute. (The company’s stock has been falling since 2000.) He will, however, have 30 months in which to exercise his stock options, so I think he’ll be OK.

wth - thanks for the link and your thoughtful comments. We live in a strange economy - probably the best the world has ever seen, yet it does have very significant deficiencies. I suppose the hope for those in the bottom 10-20% is to advance, which i imagine most do. Those who cannot, either due to lack of intelligence, ambition or whatever are being left behind.

Still i have to wonder if a significant number of hard working Americans are also being left behind due to no fault of their own. This seems unlikely to me, but i would be interested in your opinion on this.

Mike, I too was seduced by Ayn Rand when I was young.  After I was knocked around a bit by life, however, I began to realize that there were no old people, no children, and not even any regular ordinary people in her books.  Everyone was a superhero or a leech on society.

Most of us are somewhere in between those two.  I gave up on a philosophy that only deals with .00001% of the population.

Carolyn Kay
MakeThemAccountable.com

Thanks, Carolyn, for your feedback. I’m not really interested in percentages of the population when it comes to truth, morality, objectivity, values or anything else. I think your figure is off because I
think her message applies to everyone. Eddie Willers was the best of the so-called average man (hate that term) and she treated him fairly.  If people choose to be ordinary or average there’s not much to be done there. She was trying to lift a higher standard to repair too. She recognized youth and old age but there was no particular reason to emphasize them in the context of her message.
WTH, forget “we” the insignia of collectivists and concentrate on “I.” If you have to have an altruistic justification for things, think of yourself has one improved unit. And that would be the truth, your a very smart, perceptive fellow. On those golden parachute ripoffs the shareholders have to get off their lazy butts and start monitoring these clowns’ performance. The Home Depot CEO had a similar ripoff after a failed performance. Let’s just keep the left bitch egalitarian language of envy and hate out of it.
Wolf, your the only one that’s not making it.

BM,

My stats are not bogus. They are from the Congressional Budget Office. By all accounts the productivity index has lept way ahead of the growth of the national median household income which is itself quite inflated by the fact that it represents double incomes of married couples filed as joint returns. This is the case more often in the lower half of society than in the upper one percent. Caro is right to reject philosophies that cater to small elite numbers of people. They are not representitive and thus do not shed light on the truth in examining their highly unique situations. Those who prefer to examine them to the exclusion of most of the rest of us have agendas that are hostile to most of us and care little for either truth or justice.

Philosophy and truth is not determined by numbers and the CBO has been partisan for years. Integrity and rationality as well as economic laws are not subject to majority whim or vote. By truth and justice you mean using the state to rob your betters. Your crazed idea of a very tiny elite and a great mass of impoverished proletarians doesn’t conform to reality. Because of the huge expense of government most people can’t survive on one income as they did before.

Wolf,

I have related a bit of my own experience and that of my youngest son — both graphic designs and illustrators — our diminishing value was due to a number of factors, but primarily the computerization of the graphics business, the addition of world wide price competition through the internet and the effects of globalization on our clients.

I have a list of over 50 people (who I know) that have lost their jobs, their businesses, their benefits, or all of these. They span the U.S. and include machinists, architects, a TV producer, a bank trust officer, several salesmen, engineers.... 

Many of the early victims, like my cousin’s husband, were given the carrot or the stick. His employer for 39 years gave him the option of early retirement (he was 60) with his health insurance coverage until 65, or stay and take his chances. Within 5 years they sold the profitable division, declared bankruptcy and dissolved the 150 year-old company.

There are several books I can recommend which describe how management pockets big gains at the expense of shareholders and employees. Others tell how age, past earnings, “excessive” education, years of experience, can handicap people in the workplace. (These details meant higher pay.) (I will post a bibliography if you are interested.)

Two of my friends were the top salesmen in their offices and among the first to go. One was 59 and had worked for MCI for years. The other was 48 and had hit a new sales record of over $9 million in one year at a packaging company. Both were “too expensive” according to the accounting dept. and were replace by entry level college grads. The savings were immediate and the waste in time and lost business due to inexperience are impossible to quantify.

In one of the many books I’ve read, a CEO is quoted as saying, “We see our employees as appliances… when we need them we plug them in and when we don’t we unplug them. You can always get another.”

I have a printout of a U.S. Census Bureau report — Changes in Median Household Income: 1969 to 1996 — which it shows a gain of 6.3% (in 1996 dollars) for all households. The largest gain was for a one person, male head of household, over 65 (+63.2%) and the biggest loss for male householder, with children, no spouse (-8.1%).

The comparisons we hear about are all much shorter term and selected from the best categories. They don’t need to lie, just tell what they want to.

I got this in 2000 from: www.census.gov/hhes/income/medhhold/t5a.html (Table 5a.)

The process has been gradual, spans 10 or 15 years and was not limited to the blue collar, low income jobs “which Americans don’t want to do” which thhe NAFTA proponents advertised.

It has spread to medical, accounting, brokerage, and as we all know so well, tech support and telemarketing. (Your income tax preparer could very likely be sending your most personal information around the world today.)

What is happening seems so bizarre that thse old enough to have retired before 1990 can’t believe it. Anyone who has benefitted from it will deny it. Those who know it from experience can’t change it. Those who see it coming their way have no one on their side. Worst of all it is so easy for those gaining from it to discredit the whole issue.

Cabby,

“My stats are not bogus. They are from the Congressional Budget Office.”
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For your consideration:

JUICED NUMBERS - How the Government Gets the Statistics
It “Wants,” Markets Get Manipulated, and Citizens Get Deluded, and Worse

http://www.financialsense.com/fsu/editorials/2006/0325.html

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I find the hedonic adjustments to be especially creative.

wth - thanks again. If nothing else, the experiences you site make me believe even more that living on a fraction of ones income is extremely important (say 80%). It is only by saving over a long period of time that we can overcome our “indentured servitude” status and become financially stable, even when the world around us is not.

One thing that puzzles me greatly is why a company would lay off a worker that is making it money? It seems to be against the companies self interest. . .

Wolf,

Agreed — not good business, but many business decisions are made more for an immediate individual benefit than for the good of the company.

For example: If the boss says our department needs to cut our budget by ten percent cutting the person making the most money (and sales) might get it done. Showing good numbers in the short term is often done at the expense of the long term. He gets promoted for giving a good employee the gate.

Government is notorious for such shortsightedness. In Illinois about 15 years ago more than 400,000 mental patients who were judged OK when taking meds were released and the state budget for the hospitals cut.

Those people are now a large part of the mysterious appearance of Street People. When not taking their meds they can’t hold a job or care for themselves properly. (A good friend was director of one of those facilities cut.)

That governor is long gone as are most of the people who objected at the time. Our current cost overall must be substanially higher due to such a decision — higher crime rate, emergency care for the people, food pantries and homeless shelters.

Wolf, I’d like to add to your comment about our strange economy.

For instance, we are told that education is the answer. Yet college costs have been increasing to the point that even middle class is having trouble paying the bill, usually having to be saddle with massive loans to pay off after graduation.

And education is not the be-all. What if all of us were to be given free college educations and we graduated, say 90% of our population, then obviously there are not nearly that many jobs that would need all that education. I know plenty of college educated people that are underemployed even today. I read a couple of years ago in the newspaper (wish I could cite it) that BA graduates earn an average of $23,000 a year. That doesn’t show that a BA is worth much. And averages can be deceptive, what of the few who do end up running some great start-up and pull in millions, the skew of the average might mean that many BA’s are under $20,000. And what of an education that we were told would be good for us, computers come to mind which even those are being outsourced.

But beyond that plenty of people are simple not adept at a career that a college education might point them to, or to be able to handle college. We need a portion of the economy that allows these people to make a decent living without having to load up on two jobs just to make the bills. We are creating a bad cycle for families. Two income parents with one or both working two jobs trying to bring up their kids with essentially not even being a part of their kids lives.

Economics isn’t always about the money. Things like raising kids in a family that has time for them and can provide them with a decent education, a safe environment, etc. for most, hopefully all Americans should be more of a priority than how many millions some CEO pulls. Sure it sounds socialist, but so does “We the People.” Beyond that, if we continue down a road where we have such stress in families or economic reasons not to even have families then we are possibly on a road to eventual crisis, downturn as a power or even revolution.

The stats have shown quite clearly that the rich are getting richer at the expense of the middle and lower class. We’ve been here before, the gilded age and We the People back then got quite upset with that and fought back in many manners, politically and with workers strikes that resulted in plenty of violence.

But we have become a society of fear. Mostly a fear of standing up to elites because we are so worried of losing our jobs. We keep giving an inch (no raise this year) another inch (401K rather than full retirement) another inch, (shared payment for health care, if health care even paid for), another inch (drug testing), another inch (cameras in the workforce), another inch (outsourced jobs) inch after inch. I wonder how many inches on how many people results in some sort of dissipation of that fear.

The CBO is the most reliable of all the government sources. Besides I have reviewed all kinds of relevant sources for a few years now and the same proportionalities keep cropping up. US labor productivity has increased by at least 27% since 2000 and by nearly 90 since the early 1970s when the economy began to slow down and go into a recession. Since 2000, the real median wage has been reduced by about 6% and since the early 1970s by at least 20 to 20%. It takes more hours of labor today to purchase a standard consumer basket of goods than it did 35 years ago. This only requires simple reflection and common sense.

News has come out that over 200,000 more Auto Workers are to be laid off soon. The direct impact on the US economy will be catastrophic. This will mean that between 900,000 and one million UAW members will have been laid off from the US auto industry since 1978 when auto layoffs began in earnest. Those who stay on at Delphi, Ford, and GM will have their pay reduced in the next contract by 40% from 27.50/hour to 16.50/hour while the Auto majors pocket billions in profit and the CEOs vote themselves handsome raises and bonuses. It is no wonder that the distribution of wealth and income is so skewed and the economy is so slow. Tax cuts haven’t spurred the economy. Lack of effective demand, low job growth, and unemployment is the core problem. Productive investment in plant and equipment has averaged a quarter of one percent annually over the past five years since the Bush Tax cuts have been in effect. The capital gains tax, which disproportionately favors the upper 1%, was slashed to 15% which means that the super rich, who glean most of their income from investments will have a lower effective rate of taxation than many of the working poor whose effective rate is between 15% and 25%. This is a disgrace. The rate of economic growth has slowed down since the savings rate of the rich is 25% while that of the poor is negative. The financial markets that the rich invest in don’t generate many jobs but the spending of the working poor does generate millions of jobs. The equity and soundness of the Bush policies are poor.

GDP growth is high. This doesn’t most people benefit. The Dow Jones and the NASDEQ have been going up but mostly in response to the wealth of US companies whose profits are increasingly earned through foreign based production. This harms US workers. Our productivity is only making the rich more wealthy. And the deficit is most from tax cuts and military spending on this obscene war. Social Security doesn’t count as social spending because tax payers pay for it with a special premium that goes to a special fund that is often robbed to pay other government expenses. Global capitalism is skewing the distribution of wealth and power and is at the root of our current malaise.

We need much more real capitalism and much less government. Saying the CBO is the most reliable voice (based on what ?) in a government of lying agencies isn’t exactly a ringing endorsement.  We don’t need WTO, NAFTA, CAFTA, all this crap, we just need to bilaterally remove tariff (tax) barriers. It’s precisely the rich who create the jobs through their investment and it is not a subsidy to let them keep more of their own money. You get a skewered perspective from ridding an excrement filled rattle trap cab around Chicago all day. By the way you are being investigated for passing up black passngers, you leftist phony ! If lazy bums like you would buy new cars those auto workers might still be working. By your anti-capitalist behavior you are sabotaging the whole economy and bringing on a real holocaust here ! Those figures on the “real median wage” are as phony as three dollar bills. 90% of us are far better off than in 1970 or 1990. If your not, it’s your fault. You failed at serving your master, King Consumer, you piece of crap failure and like everyone else I am ashamed of you.

You never ever give evidence for your erronious accusation of liar. Calling someone a liar only because they represent the government is childish and dishonest itself. No one else has ever credibly called the CBO’s integrity into question and frankly their apporach to the data is more inclusive and reliable than other government agencies like the IRS.

We have real capitalism. How much more real can it get? The tariffs are down. They are down because of all the “free trade” agreements you profess to hate. The reason? US goods manufactured aboad in China and Mexico can re-enter the US practically duty free and thus remain price competitive.

Right now the rich are NOT creating jobs through ANY investment. I’ve already cited the low annual rates of productive investment growth at being about one quarter of one percent over the past five years since the Bush tax cuts began to take effect.

I’m sorry but taxis are not a form of government theft. They facilitate the economy and even out the necessary infrastructural and social investment in our society. Currently this is done regressively. Tell me why this is wrong rather than refering me to some Libertarian dogma to read which I refuse to do.

We tend to purchase our cars from auctions. No one buys a new cab for $30, 000 or we would go broke. We try to keep all such new cab investments under $3,000. Usually they’re old State of Illinois Police Squad Cars. They work fine.

There is universal agreement amoung economists on the stagnant to declining nature of the national median wage. Some left economists like James Cypher, who has a brilliant article in the current issue of Dollars & Sense, point out the figure is overinflating just by virtue of its inclusion of such things as supervisory bonuses, perks, and higher than average salary levels without which the true story of the real median workers salary would be even more appalling than it is currently shown to be these days.

WTH gave a source disputing your claim about the CBO. Can’t you even read ? I have given many sources and in particular George Reisman’s Capitalism for an encyclopedic refutation of all the fallacies that you have been promoting. Both Bushes and Reagan RAISED tariffs many times, we do not anything remotely approaching free trade or capitalism but again rather than take up the limited space here I’ve given one source above that will answer all of your questions. Taxes ARE theft, they are extracted at the point of a gun, they are NOT analogous to club dues. “Universal agreement” THERE YOU GO AGAIN ! There obviously isn’t any such animal as anyone can tell by checking the refs I’ve given here and elsewhere. Your refusal to read anything you disagree with is notorious, whether revisionism or libertarianism but somehow you expect we will all bow down to the socialist hacks at Dollars and Sense and the other sources you push...........Right.

US tariffs are at an all time historic low. Customs Revenue now comprises less than 5% of the dollar value of total merchandise imports according to the US Customs Service. This is part of the globalization trend. The idea is to import US manufacturing goods back in from China and Mexico so that they are price competitive on the domestic market. Trade is being eclipsed by foriegn direct investment (FDI). Transnational Corporations (TNCs) simply move to the markets they want to sell in and begin to manufacture there through wholly owned local subsidiaries of the parent corporation. About a third of all global trade is intra-firm trade and thus FDI related. Trade has not grown at as fast a rate as FDI over the past twenty years although it has slowed with the general slowdown in global economic activity since 2001.

I really don’t know how much more capitalist we can become. US government regulations have been at an all time low as well as the effect rate of taxation. The traditional policy of progressive taxation in the US is all but gone and we have become a nation of haves and have nots. The rich rule the roost!!  Total tax revenues as a proportion of the GDP, according to the CBO, dropped from an historic high of almost 21% in the late 1990s to 17.9% in 2002 and is falling fast with the effects of the new tax cuts. The corporate share of total federal tax revenues as a proportion of the US GDP dropped from a peak of about 6% in the early 1950s to about 1.4% currently. The new capital gains tax cuts should drop this ratio even more. The overall corporate share of federal tax revenues has dropped markedly under Bush as well. The regressive payroll tax, which has risen steadily over the past fifty years, has been accounting for a greater and greater share of the federal tax receipts. In addition, stock market values, which exceeded the inflation adjusted value of the GDP for the first time in the late 1990s with the Equities bubble, also contributed to the boost in federal tax revenues and continues to do so more than did real economic growth since 2002 from tax cuts.

Taxation is the price we pay for civilization. It is not theft. We all use public goods and services. The rich are now being subsidized at an alarming rate which is the idea of capitalism. Look at how social programs subsidize the low wages of Walmart workers. Even a somewhat conservative study by Michael J. Hicks of Marshall University in 2005 found that Walmart places an additional average burden of nearly $900 per worker annually on the Medicaid system due to their inadequate health benefits.

Capitalism is not about markets and market activity. It is about class power and class conflict. Today the working class is on its back. The rich have won this round.  It is obvious to even conservative thinkers. The Libertarian Party will never have any more political relevance than it now has and that is far to much for most people’s taste.

Actually they aren’t to rebut your first sentence. But rather than waste further time refuting for the umpteenth time your assertions from your usually unreliable socialist sources like Dollars and Sense, I refer everyone to the George Reisman website and to his magnum opus, Capitalism, which can be read at the site or purchased there or at Amazon, etc. Capitalism is totally about markets and individual freedom, the class stuff was concocted by a very third rate thinker and personal degenerate Karl Marx. Marx hated Jews and Judaism but confused capitalism with both. Absurd idea. He read in the London Library all day while his children starved. Ever since he has been the role model par excellence envy-eaten bums like Chicago Cabbie. Quoting the discredited Oliver Shit In His Pants Holmes lying description of taxation does not an argument make. I recently read that the average IQ in Israel is 99, which explains a lot. There have recently been some long overdue critical books totally dissecting the amoral, statist and pragmatist philosophy of Oliver Shit In His Pants Holmes. Murray Rothbard totally debunked his fire in a crowded theatre nonsense as a free speecj limitation in For A New Liberty, also available from Amazon and others. WalMart workers should not be getting subsidized by the government but that is not WalMart’s fault but the wholeassed “pwogwessive” lunatics in state legislatures. WalMart does resort to eminent domain AND THAT IS TOTALLY EVIL. Shitcago repeats the Chimskyite Big Lie that foreign trade is only between the branches of the same companies. Noam Pol Pot Apologist Chimsky has admitted that he knows NOTHING about economics and doesn’t want to. The regressive payroll tax was a brainchild of Chicago semi-statist Milton Friedman.  The rich pay more taxes so they should get more from the cuts. The trouble is not the cuts but the fact that spending HAS greatly increased more under Bush than FDR and LBJ combined.
As far as the Libertarian Party goes, 99% of libertarians have never supported it. Your flogging a dead horse, another example of “the Jewish genius.” Ha ! Mediocre little man with his big colostomy bag, Einstein is rolling over in his grave deeply ashamed of the transparent mediocrity of so many of his beloved peepul.

I hope you’re not calling Einstein mediocre, BM. That is foolish even for you. You distorted much of what I said anyhow. BTW, I used mostly US Government sources not socialist ragsheets. OWH was right about taxes and free speech. Freedom isn’t license. One needs to be considerate of others’ rights and a responsible citizen.

Walmart workers are subsidized by local and federal programs. It is Walmart’s fault. The government can’t abandon the workers and Walmart refuses to take up the slack regardless of the government’s action or inaction. Anyhow, the state, as we know, is a tool of the rich who pay more taxies but control a disproportionate share of wealth and income. Their share of tax savings is also a bigger share of their pre-tax gross income than the share for those in the bottom eighty percent of the income scale. This is Bush’s favortism of the rich. It is causing more problems than it solves quite aside from being entirely inequitable.

I wrote that Einstein would be turning over in his grave if you could see mediocre Jews like YOU trying to pose as part of a “brilliant” race. You can’t read any straighter than you can think. It’s not WalMart’s fault if various pwogwessive idiots decide to improperly intervene in on their relationship with their workers to subsidize. Holmes was wrong because if there is a fire, it’s fine to say so, if there isn’t, then the person yelling fire is committing fraud on the other patrons. So it’s not a question of limiting anyone’s rights, like all free speech issues it’s a property rights issue. Read the Rothbard book and learn something, you empty headed baboon. US Government IS a socialist source. Always seeking to increase their own power like all bureaucrats. Of course, the rich control the state, they control everything and that’s how it should be. The poor, the failures have no grounds or reasons to control anything. Are you really this dense ?

blondemike, “Of course, the rich control the state, they control everything and that’s how it should be. The poor, the failures have no grounds or reasons to control anything.”

Are you serious??? Wow!! Either you are rich or you’ve fallen for all the versions of propaganda that the rich have always used to justify their status. If this is truly your viewpoint, then the only political argument we should ever have in this country is which rich person (people) should be running our country, rich left or rich right. And since a rich left might actually advocate some small measures for the poor (or the failures as you put it) then really it is only which rich right is best for the other rich.

Cabby,

Globalization is not new. Columbus and other explorers engaged in globalization as has every major nation throughout history. What is new is the manipulation by the U.S. campaign to use it as a ploy for restructuring our society to the benefit of an elite few.

Every day when I hear/read the latest political and economic spin I can’t help comparing our life today with the foresight of Aldous Huxley in his book, “Brave New World.” I reread it and his later one, “Brave New World Revisited” last year — wow!

There are so many parallels it is uncanny.

One similarity is the way the masses are kept in line…

There is our fascination with virtual reality shows like American Idol, Who wants to be a millionaire?, Survival, Apprentice and other competition. Then there are all the pseudo participation polls… What will the Fed do next? Who is the father? Did Scooter Libby do it?

Even what is billed as war news is offered for our opinion — The Wall Street Journal “want” to know if we think vets are getting proper help to reassimilate into civilian life — how would I know except for their reports?  We report — you decide… Yeah, sure.

The next president game show will run longer than most network TV sitcoms and soaps.

Meanwhile our jobs continue to disappear, we are told the economy is good and the Fed has things under control. They can’t even control their former spinmester Big Al.

About 35% of China’s exports were to the US and much of that comes from expatriate US manufacturers — but the latest numbers have been dropping. Possibly the US consumer is either becoming cautious (that will be the day), or he is running out of credit.

Speaking of credit, while they can’t dump US Treasuries with out committing economic suicide, they are buying fewer of ours in favor of other alternatives. We therefore have switched to selling other assets like tollways and lotteries.
One of the most obvious scams is the announcement by Haliburton that they are moving their headquarters to Dubai — What!?!  Could this be a tax dodge? Both Durbin and Manzullo were aghast at the possibility and said it should be questioned. Heard any questions from either yet?

The tariff issue will be raised, discussed, lobbied for and against, decried by the right and demanded by the left and like all issues of genuine interest to average Americans go into committee limbo until another show takes center stage.

I feel like I’m in an Andy Hardy movie, “Hey, let’s put on a show!” or a rerun of “It’s a Wonderful Life.”

We watched a movie last night, “Thank you for not smoking.” It’s about a lobbyist for big tobacco who at one point is on a talk show with Mothers Against Tobacco, a couple of other anti-tobacco representatives and a young boy who has cancer.

The accusation is made that the tobacco companies are killing the boy. He immediately replies, “That is ridiculous — why would we do that? We’d be killing a young customer — the future of our business. It’s Mr. Jones here, who wants him dead so he can blame us.”

Later he explains to his young son how he goes about spinning. They begin talking about what ice cream is better chocolate or vanilla. At some point the son says, “You haven’t proven to me that I was wrong when I said chocolate is best.” His reply was, “I don’t have to. It’s not about you and me. All I need to do is show all of them out there (the rest of the world) that you are not right and I win.”

Sounds just like congress, TV news and a whole bunch of the stuff on the internet. Nobody has to accomplish anything — just pretend they are and life can go on as usual.

BM,

What property rights are you talking about. If some causes deaths from the trampling of people from a mad rush to the exits because he yelled falsely about some immenant threat in the club, theater or whatever venue he is responsible for their deaths. He failed to regard their rights to safely. He can be criminally liable. This is obvious. Also the government is not socialist nor is the published information it puts out. Socialism is a system not a thing automatically connected to public institutions like the CBO or the IRS.

WTH,

Globalization in the modern sense is not international economic interaction which has always existed but the transnationalization of formerly national economies through foreign direct investment (FDI) by transnational corporations (TNCs) and transnationalized production. It is also epitomised by supra-national governance of the global economy by such undemocratic and unaccountable institutions as the WTO.

I was suprised that the US market is only 35% of all current Chinese exports. The recent Chinese diversification of their portfolio investment is doubtless related to their export market diversification. This is a very bad sign and a possible portend of the decline of the US Dollar. The deficits and growing national debt is doubtless causing the Chinese and others to have second thoughts about the viability of the future US economy. The Chinese have over a $trillion in foreign exchange reserves and can potentially become a major global financial liquidity source. Their ability to affect the world economy by quickly shifting funds aroung is amazing. The US is hosting more foreign investment than it sends abroad. Most of it, about 80%, is portfolio investment because of the need to finance the trade and current account budget deficits. These deficits are costing us jobs and growth every year.  The privatization of roads, public works, and lotteries will only shift more wealth from the poor to the rich. They will not spend the wealth to expand GDP and jobs but to speculate further on securities and the equities market. The situation is similar to that which prevailed immediately prior to the crash of 1929. It is very dangerous.

I saw the Smoking Movie. Very funny and painfully accurate.

WTHeck, “About 35% of China’s exports were to the US and much of that comes from expatriate US manufacturers — but the latest numbers have been dropping. Possibly the US consumer is either becoming cautious (that will be the day), or he is running out of credit.”

Just this week, it turns out that China surpassed the US as the top exporter to the European Union. China is an economic powerhouse and beating us all over the world now. And you can bet that part of the reason they are able to do this is two-fold. One of course is their low wage workers, but the second is that they don’t spend a large portion of their GDP on military and war. The Chinese government policy and their business world works in lockstep and combined with their censorship would begin to compare to fascism but without the constant war footing. But I guess it’s still communism. It’s becoming tough to label a government and its economy.

I’m having trouble believing I live in a democracy. Just as you said, the president game show, but you forgot TV in there, Presidential TV Game Show. Already the TV media has narrowed down the favorites to a more manageable three or four per party. And the gossip about the candidates seems to be the big issues. How many wives for the Republican front runners? Hillary and Obama’s little spat.

I haven’t read Brave New World in years. Of course the book comparison to the Bush Administration is 1984. The thing I notice most is the use of fear of the outside world and the use of constant war to encourage nationalism. Cameras everywhere are here as well. Newspeak or the use of government propaganda, spin and the reframing and redefining of words is another good comparison. I’ll never forget when Bush stole a line right out of 1984 when he said, “I just want you to know that, when we talk about war, we’re really talking about peace.”

War is peace. It makes me wonder if the Bush speech writers are playing mind games with us or whether Bush ad-libbed and accidentally Orwelled us.

Thank You For Not Smoking was a great movie about the use of spin as well as being very funny. I loved the scenes of the meetings between the three lobbyists, alcohol, tobacco and firearms as they commiserate over their problems.

Some interesting things to consider about US trade with China and its effects on US employment could put things in better perspective. In the first place the US trade deficit is now nearing $1 trillion or about 7% of the current GDP with manufactured goods imports now making up more than 80% of the total balance of trade deficit.  Despite this, and the fact that we imported about $1.4 trillion in manufactured goods, there is still about $4.5 trillion in manufactured goods that we produce in a year. About $775 billion gets exported so there is a just about a $625 billion trade deficit in manufactured goods. This is hardly the cause of the US decline in manufacturing employment.

Over the past two decades since the recovery from the 1982 recession, US manufacturing productivity has doubled. Output has increased by almost two-thirds while manufacturing employment has dropped by nearly a fifth. Thus, increased efficiency has caused a reduction in US manufacturing employment. There is also the shift in consumption from consumer durables to services. The reduction in demand by the continued disappearance of higher paying jobs and their replacement by lower paying ones has also reduced demand for consumer goods and thus manufacturing employment.

The Bush Administration’s charge that the Chinese currency is undervalued is irrelevant. This would only make sense if there was a high degree of Chinese value added in the manufactured exports which there is not. Goods exported from China often contain value added from two or more countries including the US. Most of China’s contribution to the value added of its exports is the labor intensive assembly which is notoriously cheap. This is the main reason manufacturers locate there in the first place.

US/Chinese trade isn’t the reason for domestic US manufacturing unemployment. It is the globalization practices of US capitalists, such as offshoring production in a global race ot the bottom, and the advent of technologically efficient “lean” production here in the US. It is efforts to successfully boost productivity over the past two decades that have swelled US corporate profits. In a word, productivity is itself to blame for much of the current woes of the US working class. It has reduced manufacturing employment as it always has throughout capitalism’s history. This has also caused a precipitous drop in overall US wages by swelling the “reserve army of labor”.

If someone falsely cries fire in a crowded theatre or a noncrowded one they are commiting fraud on the other patrons and or owners. Holmes used that bad example as a rationale for limiting free speech but as Rothbard demonstrates in For A New Liberty he’s wrong, of course if there are also deaths that’s an additional criminal liability which in no way obviates the point that I was making. Your smoking and other examples are pathetic, the tobacco companies have no more liability for smokers than the gun manufacturers have for people who misuse firearms, everyone who is sentient has known for at least 50 years of the dangers of smoking and the only ones responsible for gun deaths are the punks who pull the triggers when committing crimes, people who shoot them in self-defense are fine. The prohibitionist mentality whether for the 100 year failed drug war, alcohol, guns, tobacco, you name it is wrong. En toto. Jon, only rich people run for President and for 99% of all political offices, that’s not even an issue. Socialism, Chicago Moron, IS government ownership. PERIOD. The rest of your Marxian premised class warfare garbage should be ignored and check out Reisman’s Capitalism. I realized there are mostly collectivist-statists who post here but you might want to recheck your premises anyway. Who wants the rich left morons undercutting the system that has made them wealthy ? The only anti-Bush thing last fall was anti-war and anti-Bush’s attacks on civil liberties. It was NOT a vote for socialism of any sort, most new Dems are Blue Dogs.

Only a few Dems are blue dogs. The voters voted against Republicans more than for Democrats. They also voted against the War in Iraq and against the increasing wealth and income gap in the US or as they put it “the disappearance of the middle class” which they think will be addressed best by tariffs and a cut in bloated CEO salaries. People are outraged by the maldistribution of wealth and rightly see it as a threat to democracy along with the Bush attacks on civil liberties.

You didn’t address my point about the OWH statement. If people are trampled to death in a crowded public place because of some irresponsible incitement to panic the truth or falsehood or “fraud” as you put it is irrelevant. If your wife was killed in such a frenzied rush for the exits as a result of some idiot yelling fire would you really care whether or not there was an actual fire? Isn’t his behaviour more relevant to the issue. And what the hell does property have to do with any of this. Instead of telling me about Rothbard or some other moron why don’t you recapitulate his argument. How does Rothbard argue against the claim by OWH? You haven’t told us. It seems that individual rights stop where the rights of others begin. You have no right to jeopordize another person’s safety. Our laws include charges like “conduct regardless of life”, “incitement”, and “reckless endangerment” to name but a few. Freedom isn’t license. You MUST respect the rights of others.

Government ownership is not socialism. It’s just government ownership!!  The government in this sense is not really any different than any other entity. In many societies state participation in the economy has helped to develop a vibrant, richly capitalized, and successful capitalist economy that is highly globalized. Israel, your favorite country, is only one stunning example of what I mean. From a somewhat autarchic state capitalist model from the Yishuv days until the global recession of the early 1980s, Israel and its more than $150 billion GDP has become the very epitome of neo-liberal capitalism. Over a fifth fo Israel’s gross fixed capital formation consists of Foreign Direct Investment while exports represent more than 60% of GDP. Israel’s high tech companies that trade exclusively on the Stock exchanges other than the TASE represent less than 15% of the total number of Israeli firms but almost half the total Israeli corporate market capitalization.

The extent of Israel’s globalization is proportionately greater than the US by some indicators. Until the 1980s, US imports and exports never exceeded 13% of total GNP. Now it is over 20% and climbing. These two economies have much in common in terms of their patterns of capitalist development. That began as somewhat autarchic with a large government role (Israel’s was much greater than the US where state ownership was always miniscule if at all) and ended up highly globalized and privatized. Capitalism is not a static system defined by absolute principles and dogmas but a highly diverse system which develops over time and incorporates all the aspects of society including the state. This point is lost on the Libertarians and other dogmatists.

The problem with hippies reporting economic statistics is in the ideology.  Productivity is influenced by technological changes to the market or by changes to the manufacturing capability not the emotional states of workers. Without a radical new technological breakthrough the current growth rate of 1.5 percent will remain stable.

As productivity increases the number of drones neccessary to push buttons decreases thus increasing unemployment. So yes a large increase in productivity can be harmful to the economy as a whole.

Productivity growth has slowed due to a severe loss of manufacturing capability due to Democratic imposition of NAFTA. As manaufacturing jobs and physical plants are removed to Mexico the total capability of the market to produce goods decreases thus the total of available growth in producitivity must also decrease. The upswing in productivity in the late 90’s is attributable directly to the introduction of the Internet and its fundemental changes to the business environment. WIth the introduction of robotic production in the early 80’s we saw a similar spike.

Good point Cabdriver. The TASE or Tel Aviv Stock Exchange is one of the finest sources of long term capital growth. The Makam or their T-Bill offers a higher interest rate somewhere over 4 percent as compared to around 2 percent for a US T-Bill. And while higher rates can be found in the more exotic markets TASE has proven the best long term option for secure reasonable growth. While I am not dumping my Treasury securities I am always looking for better profits.

I really don’t of any “hippies” who know of much less report economic statistics. I do, however, tend to consult such sources as the US government’s Bureau of Labor Statistics and the Congressional Budget Office as well as other respected sources. Labor productivity is the result of many things. Technology is one key source but there are others. Lean production, as labor activist and writer Kim Moody (not a hippy) puts it, is also due to employers downsizing the workforce while overburdening workers with more work while paying less for it. This has overwhelmingly added to the massive growth in output/manhour and a reduction in unit costs. As far as the IT revolution goes, many economists of all tendencies have said that while there was a definite contribution, its impact on overall US productivity is exaggerated. Much of the productivity increases were confined to certain industries like finance and certain other services that don’t make up the bulk of the US GDP.

In addition, NAFTA, a bipartisan cause because of its corporate nature, didn’t kill off as much US manufacturing as the technological advances you mentioned might have done. Some economists have pointed to the massive amount of manufacturing still done here in the US but this seems misleading. I always thought the ratio of domestic manufactured goods/US GDP has been steadily declining. One thing I discovered was that the BLS includes in its manufactured goods statistics is food processing of all types, non-food agricultural products such as fertilizers, pharmacuticals, tobacco processing and cigarette manufacturing. Much of this has become extremely low wage with an increasing amount done by immigrant labor especially in meat packing. Such circumstances have kept this sector, which is now growing, from being offshored as opposed to other sectors like consumer durables. Also, the 12% of US GDP now contributed by the US Manufacturing sector may only count US resident manufacturers and not that produced by FDI. In this case the dollar value of US manufacturing is about $1.5 trillion with the remaining $3 trillion as FDI. In any case we now host more FDI than we have abroad and most manufacturing done here, two-thirds of it, is by foreign investors.

Israel’s economic boom is due almost entirely to high tech in the fields of IT software and pharmacuticals and medical equipment. Massive amounts of FDI by INTEL in the late 1980s and early 1990s encouraged numerous Israeli startups and spinoffs. This led the early globalization of the Israeli economy which many writers correctly view as a stimulous to the OSLO diplomacy of the early 1990s. The TASE actually handles very little high tech stocks which are mostly traded on the NASDEQ. This is due both to cumbersome regulations and the small relative size of the Israeli economy (the total Dollar value of Israeli IT firm market capitalization exceeded half the Israeli GDP as early as four years ago.)Israeli capitalism is more globalized than even US capitalism.

The Blue Dogs are the biggest single caucus in the House Dems. Israel is a shit investment all the way around because it is a total parasite economy. see the website of Israel Shamir in Haifa. I did address your fire statement, it is only fraud if there is no fire, if people are stupid enough to rush out mindlessly they get exactly what they deserve. The real crime is the fraud iif there is no fire. I already gave you the book where you can reference Rothbard’s statement in full and I gave you the outline of his argument. Free speech is invariably tied in with private property rights, on someone else’s property your speech is considerably more limited than on your own if it is absolute. If I get up and urge you to burn down a building I have committed no crime but IF you take my advice you have. People are not automatons, they do not have to stampede out, if there’s a crime here it is solely on the stampeders, not on our free speech. By the way, TexASS MORON, regardless of your stupid views on automation and free trade, most Dems in 1993 voted against NAFTA, Clinton won it with Rep votes. As usual you have the facts wrong. If it wasn’t for the massive US & European aid & special trading concessions, Israel’s economy would be down the toilet. They have plenty of hi-tech people true but their actual credit standing as Chomsky noted would be at the Bangladesh level.  The last sentence of Chicago’s posting above is true but this will all go down the drain if the US invades Iran to do Israel’s dirty work and if Israel doesn’t get off the dime in negotiations with the Palestinians. Israel is 100% to blame for the stalemate and as the “holocaust” big lie becomes ever more discredited Israel has had it. Since the average IQ in Israel is 99 and they have their paranoid Masada complex, I’m not optimistic.

In the first place it is both involuntary and normal to panic in a dangerous situation. Also, those who don’t panic can be killed by those who do. Either way no one “deserves” to die in that situation and the blame goes to the one who yells fire. Property has nothing to do with it. Here in Chicago a similar thing occured at the E2 night club in the South Loop. 21 people were killed in a panic and made rush to exit the premesis because someone yelled that anthrax toxin had been relaeased in the club. Of course this was wrong but the issue wasn’t whether or not the claim was false but the lethal effect of the incitement. Speech can have the effect of actual behaviour or worse. The individual was prosecuted accordingly. So was the Club owner who found in severe violation of the City safely code on several counts.

The Israeli economy isn’t parasitic even though it gets substantial aid. The total value of the US annual aid package is only about 2% of Israel’s GDP so obviously there has to be mostly trade and investment activity proping up the economy.  Israel trades with the US and the EU but also with China and the rest of East Asia as well as India. She also hosts a lot of FDI and invests abroad as well including in the US. Biologic, here in the Chicago area, is one of their companies that has much US participation.  Israel doesn’t need a US presence in the Gulf region. The idea that the US is in the Persian Gulf on behalf of Israeli Security is one of the most illogical and senseless lies of the modern age. What does Israel need with the US and its force in the Persian Gulf when it has over 200 deliverable nuclear bombs and a technologically advanced airforce that is the best and most sophisticated and operated by the world’s best pilots (a US assessment not an Israeli one). All the militaries of the Arab world combined have no real military option against Israel with or without the US presence. Why Israel would go to all the trouble to bring the US in at this time makes no sense.  In addition, Egypt and Jordan both have peace aggreements signed. Israel has always been safe and didn’t invite the US into the area for added security.

The average IQ in Israel is higher that 99 I can assure you.

No, the recent study I read gave it as exactly 99%. I have seen no evidence to the contrary. Israel has always been the neighborhood bully, thanks for your concession there, but it’s far from safe since it creates the enemies that will destroy it.  The Israeli economy is totally parasitic, that 2% figure is another big lie like the “six million” Jews allegedly killed in WW2. One ancient Jewish biblical type source actually gave 600 billion as their death in the old days ! Typical of the exaggerators and perjurers in this one group. The blame doesn’t go to people who yelled fire, you moron, it goes to the people who set the fire or the owners who were negligent in preventing one. You can’t punish speech because of “lethal incitement” since nothing a rabble rouser says FORCES you or anyone to undertake ANY actions. Only the people who undertake the criminal ACTIONS should be punished. Don;t waste my time reciting the moronic laws on the books and their unjust prosecutions. As I have demonstrated AND referenced for your further reading so no one has to take my word as the end all, Oliver Wendell Shit In His Pants was wrong. See Oliver Wendell Holmes:Destroyer of American Law, by attorney Thomas Bowden of Baltimore, available from the Ayn Rand Bookstore in audio form. The peace treaties with Egypt and Jordan were bad ideas because they strictly tactical maneuvers for Israel to continue its ceaseless occupation and ongoing aggression against the Palestinians and Lebanon. It is not normal to panic in an emergency situation, it is normal not to panic so you can preserve your life. The only issue here would be one of fraud if the statement is untrue, if not, there is no issue. If there are to be prosecutions the people who stampede should be prosecuted and the owners IF they maintained unsafe conditions.

Your reasoning is about as stupid as it gets. Obviously it is normal to panic in emergency situations. What do you think adrenaline does? It sure doesn’t calm you down!! The truth or falsehood of the statement used to incite is utterly irrelevant. Obviously false incitement is worse than truthful incitement but the person who shouts an alarm carelessly should be prosecuted because he caused the panic.  People are forced to panic in an emergency precisely because they are desparate to save their lives. I think you shrink from making the arguments because you can’t and don’t even fully understand them. You subsititute name dropping for actual thought. This is useless and silly.

The 2% figure is totally acurate. According to the current CIA fact book, the current Israeli GDP is just over $140 billion US dollars. The total amount of US aid to Israel is about $5 billion. The latter is between 2% and 3% of the former. No one ever made a claim about six billion anything, BM you are the exaggerator.

You can control your actions, regardless of how stressed it gets. You can’t control your emotions because those are involuntary but you can control if you are going to act on those or any emotions. That we DO have control over. The CIA Fact Book is worthless, I read the entry for the US and found it laughable. In either the Talmud or one ancient Jewish Book the estimate was NOT six billion but SIX HUNDRED BILLION. Butz brought this out in The Hoax Of The Twentieth Century.  I can find out exactly which one and get back to you. Your peepul have some world class records in the lying department as even many Jews I know acknowledge. The fact that we have given 250 BILLION dollars to Israel and largely since 1967 as well as the most favorable special free trade terms and a considerable amount of off the books money not even included in the annual five billion dollar ripoff.  That annual five bil has been going on since the 67 war. That’s 200 billion right there. Off the books funds and forgiveness of loans easily gets the other 50 billion.

Talk about pulling numbers out of one’s ass, BM, you’re the chief. The CIA fact book is totally reliable and is close in its claims to other reliable sources. The US has not given the State of Israel $5 billion annually since 1967. Naseer Aruri, a Palestinian writer who is as hostile to Israel as anyone, cites in his work, The Obstruction of Peace, that Israel has received about $105 billion between 1949 and 2003. The US was somewhat chilly towards Israel and only began the special relationship with the end of the 1973 War when the US delivered arms to Israel that turned the tide of the war against Syria and Egypt. Much of the rest of Israel’s money comes from private donations by Jewish, and now Christian Zionist, communities.

Arthur Butz is a moron. He was dismissed from his teaching post in the engineering department here in Evanston’s Northwestern University. The regents decided that an institution with the prestige of NWU shouldn’t retain a discredited holocaust denier.Good for them!!

Butz was never dismissed from his position as Professor of Electrical Engineering and is listed as a Professor Emeritus if you go to the Northwestern University website.  Some people may have wanted to get rid of him but they couldn’t because he had tenure and was an excellent teacher. This just proves what a liar you are. Go to pages 295-296 of the third revised edition of The Hoax Of The Twentieth Century wherein Butz quotes from the book Bar-Kokhba by the archaeologist Yigael Yadin who quotes from the Talmud and the Midrash Rabbah which claims that the Romans killed either “4 billion” or “40 million” or “800 million” Jews at the battle of Bethar ! I was wrong about the 600 Billion figure but the reasonableness of my comment stands. He references the Encyclopedia Judaica, vol. 4, page 735 and the Babylonian Talmud93b or page 627 in the translation edited by I. Epstein.
That source is wrong on the 105 billlion figure nor has the US EVER been cool to Israel since 1967. Before that hundreds of billions of German Govt reparations and tax exempt US Jewish contributions went to Israel. Israel was never even a state during WW2. They as a state should have received nothing from West Germany. The CIA “Fact” Book is not reliable at all nor is the CIA itself. You only assert that lie because that is your source. Those figures you quote are way understated as to the amount of US aid to Israel. If that 5 billion figure is correct and I have reason to believe that is understated, but if it is remotely correct it accounts for 200 billion of the 250 billion or quarter trillion and that massive aid did not just begin in fall 73.

I can’t account for Butz and his inane rantings. Thankfully for him he had the right to free expression and a good Jewish ACLU lawyer. The figures on Israeli aid are ridiculous and utterly unsubstantiated. I know they are factually incorrect because I have checked generally anti-Israel sources, the only ones I actually read, and have never seen such inflated figure. STOP READING THAT SHITTY NOONTIDE PRESS. They are stupid Neo-Nazi liars who will mislead you time and again. The correct figure for US/Israeli bilateral government to government aid flows is slightly in excess of $105 billion. That is all.

I also wonder who you are to reject the CIA factbook or any other US government source. I will check and see the US State Department figures. I’m sure they are more reliable than those of Noontide Press and its affiliates. Shameful little Nazi putz that Francis Parker Yockey.

Mikey
I would take investment advice from the homeless before I would take it from you. Israel is the only option for investment in the Eastern markets. Palestinians don’t have a stock exchange. Although it would be funny to own 500 shares of Achmed’s camels. 

If the Arabs would create something to invest in I would look closely at investing capital in other countries in the region.  But suicide bomb belts and hatred are their only commodities. So they will continue to fail and continue to remain ignorant savages.

Cabdriver is right the Israeli military is by far the most effective in the region. They have the capability to design and manfacture effective indiginous military hardware. The IAF raid on Saddams French built nuclear plant demonstrated the effectiveness of the pilots. Our expenditures are a small part of Israel’s total GDP and the aid we give provides thousands of American manufacturing jobs. Good trade off. If we can triple the amount we will piss Mikey off enough so that he might blow an O-ring and choke on his own bile.

I am so tired of hearing about Palestinians. Why should we help terrorists? Why should one dollar of my taxes pay for Palestinian hatred. Fuck haji. He want’s to vist Allah I want to help him along the way as quickly as possible