Category Archives: Economics

Canary in the Coal Mine

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Idiom in the News: Canary in the Coal Mine, by ShareAmerica, 11/12/14

canary in a coal mine (plural canaries in a coal mine or canaries in coal mines)

  1. (idiomatic) Something whose sensitivity to adverse conditions makes it a useful early indicator of such conditions; something which warns of the coming of greater danger or trouble by a deterioration in its health or welfare.

Last summer, while attending a Tibetan teaching in the east bay, I spent two nights in a motel about 30 miles east, to save money on room cost. The exit was Cordelia, familiar I’m sure to everyone who travels on Highway 80 to or from the San Francisco area. There are lots of gas stations, fast food places, and motels.

I was surprised to see that the one sit down restaurant – a Denny’s – had closed, after decades as a fixture at that exit. I reflected then that it seemed analogous to the economic “hollowing out of the middle,” you see in department stores: Walmart and Target appear to be doing well, as are high end boutiques, but the mainstream “mall anchors” – Macy’s, Penny’s, and the late-great Sears, are struggling or gone.

Similarly, on the food front, fast is thriving, as are the kind of restaurants you visit for anniversaries and birthdays, but the “family style restaurant,” the place for a Saturday morning breakfast, or a casual lunch, or a visit with a friend over coffee and pie, appears to be in trouble.

That hunch, sparked by a defunct Denny’s last year, has materialized with a vengeance this summer in the immediate neighborhood. Continue reading →

Notes from 2017 – The war on what???

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Intruder Alert! St. Nicholas, by Thomas Nast

Intruder Alert! St. Nicholas, by Thomas Nast

Piety and commercialism, two unlovely attributes, are rampant at this time of year, so it’s time for my annual Christmas history post. If you search on “Christmas” here, you’ll find some interesting info on things like the Ghostly Christmas tree ship (Christmas Tree Facts and Legends), my grinchly rant on “Holiday music,” and most poignantly, the Christmas Truce, when to the chagrin of the generals, peace broke out on the western front on Dec. 25, 1914.

One thing you won’t find are notes on a “war on Christmas,” since there isn’t one. No one out here in the world cares whether you say “Merry Christmas,” or “Happy Holidays.” But if you look back in history, you’ll find a number of instances of Christians waging war on Christmas. Consider that:

–Early Christians did not celebrate Christmas. Origen of Alexandria, a third century theologian, wrote that “only sinners like Herod and Pharaoh celebrate their birthdays.”

–Christians didn’t celebrate Christmas until the ninth century reign of Charlemagne.

–During the middle ages, the Feast of Epiphany was more important than Christmas, which didn’t really emerge as a feast until 1377, when Richard II held a months long blowout with his nobles. Twenty-eight oxen and 300 sheep were slaughtered for the event, which according to chroniclers, featured “drunkenness, promiscuity, and gambling.” Early Christmas carols were sung, but they were bawdy.

–In 1645, Oliver Cromwell banned Christmas in England, and the Mayflower pilgrims outlawed it in Boston from 1658-1681.

–The New York City Police Department was formed after a Christmas riot in 1828. We read on History.com that “The early 19th century was a period of class conflict and turmoil. During this time, unemployment was high and gang rioting by the disenchanted classes often occurred during the Christmas season.”

–The “one percent” of the day responded with a campaign to transform a holiday long known for outlandish behavior into a commercial, family centered time, drafting the work of Thomas Nast, Charles Dickens, Washington Irving and others for the task.

–Victorian sensibilities focused on family and children, and it was only then, in 1870 that Christmas become a legal holiday in America. We’ve been led to believe we celebrate this day as it has been done for centuries, but that simply isn’t so (Humbug Revisited: A Brief History of Christmas).

I have no complaints about Christmas as a spiritual holiday, and it’s a great time to remember family and friends, but I do my best to ignore the cultural trappings. I boycott stores that force employees to work on Thanksgiving. I celebrate “Buy Nothing Day,” instead of Black Friday.

I will end with an observation I once heard an Art History professor share on the iconography of Santa Claus.

Glance at the Thomas Nast illustration at the start of this post. If you saw this guy in your living room, you’d either unlock your gun safe or call 911. He’s looking for your liquor cabinet and fridge, as he carries a sack of loot boosted from the neighbors!

Now look at the “Jolly Old Elf” in this modern representation below – white hair and beard but a child’s nose! This is an infantilized Santa Claus! It may help to get parents of very young children out to Toys R Us, but I don’t think it does much good for the maturity level of the culture…

Happy Solstice everyone!

Santa with puppies, kittens, and the facial features of a child.

Santa with puppies, kittens, and the facial features of a child.

Changes

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2x2 Matrix: possible futures, by Gaurau Mishra. CC-BY-2.0

2×2 Matrix: possible futures, by Gaurau Mishra. CC-BY-2.0

Almost four years ago, I posted Change is the Only Constant, a discussion of the December, 2012 report of the National Intelligence Council, a consortium of the 16 major U.S. intelligence agencies. Since 1997, they have issued comprehensive reports on future trends after each presidential election and posted the reports online. We can expect the next installment this winter.

The 2012 edition, which predicts alternate futures for the year 2030, outlines some things that are certain, like aging populations in the developed world; some which are possible, and some “black swans” – potential surprises for good or ill. Here are two key predictions.

  • The rate of change in all areas of life will continue to accelerate and will be faster than anything anyone living has seen.
  • World population will grow from 7.1 billion (in 2012) to 8.3 billion in 2030. Demand for food will increase 35% and for water by 40%.

Keep this in mind as we look at a some current events.  I should preface these comments by saying I’ve long had a rule of thumb: never trust a politician who says, “I have a plan to create jobs.” Both presidential candidates have said those exact words this year.

The fantasy is that by pulling the right levers – cutting or raising taxes, threatening or cajoling China, building a wall at our southern border, and so on, we can restore whatever American golden age our imagination conjures. Maybe the 50’s, when we were the only industrial nation not ravaged by WWII. Maybe the 90’s dot com boom, when even your Starbucks barista had stock tips to share.

We all know that’s not going to happen. The truth is even harder to face than any elected or would-be elected American official has yet been willing to share.

On May 16, the BBC reported that China’s Foxconn, the largest electronics manufacturer in the world, where Apple and Samsung smart phones are made, replaced 60,000 workers with robots.  Chinese manufacturers are investing heavily in robotics. So much for bringing jobs back from China.

For an article in the August 1 issue of Time, (“What to do about jobs that are never coming back”), Rana Foroohar spoke to Andy Stern, a former head of the Service Employees International Union:  “Stern tells a persuasive story about a rapidly emerging economic order in which automation and ever smarter artificial intelligence will make even cheap foreign labor obsolete and give rise to a society that will be highly productive–except at creating new jobs. Today’s persistently stagnant wages and rageful political populism are early signs of the trouble this could generate.”

In a Common Dreams article published last week,  You Can’t Handle the Truth,  Richard Heinberg, steps back for a much longer view of our situation and says:

“We have overshot human population levels that are supportable long-term. Yet we have come to rely on continual expansion of population and consumption in order to generate economic growth—which we see as the solution to all problems. Our medicine is our poison.

“And most recently, as a way of keeping the party roaring, we have run up history’s biggest debt bubble—and we doubled down on it in response to the 2008 global financial crisis.

“All past civilizations have gone through similar patterns of over-growth and decline. But ours is the first global, fossil-fueled civilization, and its collapse will therefore correspondingly be more devastating (the bigger the boom, the bigger the bust).

“All of this constitutes a fairly simple and obvious truth. But evidently our leaders believe that most people simply can’t handle this truth. Either that or our leaders are, themselves, clueless. (I’m not sure which is worse.)”

“…any intention to “Make America Great Again”—if that means restoring a global empire that always gets its way, and whose economy is always growing, offering glittery gadgets for all—is utterly futile, but at least it acknowledges what so many sense in their gut: America isn’t what it used to be, and things are unraveling fast. Troublingly, when empires rot the result is sometimes a huge increase in violence—war and revolution.” (emphasis added)

The last major decline of empires, he notes, resulted in World War I. The US and the rest of the world are, in Heinberg’s words, “sleepwalking into history’s greatest shitstorm.”

“…Regardless how we address the challenges of climate change, resource depletion, overpopulation, debt deflation, species extinctions, ocean death, and on and on, we’re in for one hell of a century. It’s simply too late for a soft landing.

“I’d certainly prefer that we head into the grinder holding hands and singing “kumbaya” rather than with knives at each other’s throats. But better still would be avoiding the worst of the worst. Doing so would require our leaders to publicly acknowledge that a prolonged shrinkage of the economy is a done deal. From that initial recognition might follow a train of possible goals and strategies, including planned population decline, economic localization, the formation of cooperatives to replace corporations, and the abandonment of consumerism. Global efforts at resource conservation and climate mitigation could avert pointless wars.

“But none of that was discussed at the conventions. No, America won’t be “Great” again, in the way Republicans are being encouraged to envision greatness. And no, we can’t have a future in which everyone is guaranteed a life that, in material respects, echoes TV situation comedies of the 1960s, regardless of race, religion, or sexual orientation…”

Heinberg’s conclusions aren’t easy to digest, and are tempting to deny. Keeping attention on even a few of the significant points in the articles referenced here leads to disturbing conclusions.

If 16 US Intelligence agencies are anywhere near correct in their numbers, in 14 years, 8.3 billion people will be competing for 40% less water and 35% less food (in this case, living up to their name, the intelligence agencies don’t waste anyone’s time denying the effects of climate change).

Can we imagine “global efforts at resource conservation” in which nations co-operate, and at least try to send relief where it’s needed?  Like after tsunamis or the earthquake in Nepal? Or are we headed toward a survivalist wet dream?  Futures aren’t set in stone, said the NIA. It all depends on how we behave (sinking feeling in the gut…).

I can see it both ways. Speaking of our current election, someone recently said to me, “I haven’t felt this bad about things since 9/11. Maybe it’s even worse.”  Maybe so. In the immediate aftermath of 9/11, we were a nation and a world largely united in awareness of our fragile humanity and revulsion at senseless suffering.

It strikes me that communities often pull together in the face of disaster when our leaders and governments won’t. That is Heinberg’s conclusion as well. Given our lack of competent leadership at the top, how can we build “local community resilience?”

I wish I knew. But since Iceland has more sense than to open it’s doors to American refugees, I’ll have time to think it over!  Meanwhile this quote from the Dalai Lama comes to mind:

“We can live without rituals. And we can live without religion. But we cannot live without kindness to each other.”

Changes are certain but futures aren’t set in stone…

The Big Lie

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“The great masses will more easily fall victim to a big lie than to a small one” – Adolf Hitler

“I crossed the green mountain / I slept by the stream
Heaven blazing in my head / I dreamt a monstrous dream
Something came up / Out of the sea
Swept through the land of / The rich and the free” – Bob Dylan

In their wildest dreams, demagogues of the past never imagined how easy television and social media would make it to use lies as means of persuasion. We can all quote our favorite absurdities from the political arena, but no one relies on the power of falsehood more effectively than the current Republican front runner and former star of a type of television that large numbers of people mistake for “reality.” The efforts of so called “fact checkers” are doomed from the start; studies have repeatedly shown that rational argument is the least effective means of persuading anyone of anything.

The lie that prompted me to write this post hasn’t yet caught media attention, but it’s one we’re likely to hear quoted more frequently as the election circus continues.

It goes like this:  “China is stealing our jobs.” The reality is, “Corporations are offshoring them for profit.”

A decade ago, when I worked at the Intel campus in Folsom, I took a half hour walk every day on my lunch hour. When it was too hot or cold or rainy, I’d walk inside, through through seven interconnected buildings, up one flight of stairs, down another, and so on. One day I noticed that an entire floor in one of the four story buildings was empty. “What happened?” I asked a manager. “Those jobs have moved to Shanghai,” he said.

I’ve had relatives and friends in different industries compelled to train their Asian replacements in order to get a severance package. A decade later it’s still going on. Beware of any politician with “a plan to create jobs” or who blames illegals from Mexico for out-of-work software developers.

This is old news. I’ve already discussed it in 2013, in a review of The Unwinding by George Packer, an account of the dissolution of the bonds of mutual loyalty that once seemed an integral part of corporate life in America. I mention it now because one of the friends with whom I ate Thanksgiving dinner this year recently saw his job move to India after a buyout.

My hero in this is a 40 something software developer named Bob who outsourced his own job to Shanghai. Working through an outsourcing company, he paid his Chinese counterpart one-sixth of his salary, spent his days surfing the web, especially cat videos, and occasionally introduced errors into the near-perfect code he received, lest his employer, Verizon, get suspicious.

When the story broke, a Verizon spokesperson simply said “Bob no longer works here.”  Too bad – he’d be a great fit in upper management.

“You can take my soul, but not my lack of enthusiasm!” – Wally, in Dilbert.

 

Socially Responsible Purchasing Power

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Here’s some nice info to pass on. I’m already a fan of Paul Newman salad dressings and popcorn, and it’s great to hear of garments made in America once again. I like the idea of socially responsible funds too, though once when I looked at them (sometime ago) I discovered they trailed index funds in their returns. Many things have changed since then, but you’ll want to investigate or check with a financial advisor. At any rate, it’s great to hear of opportunities to shop with conscience.

Guhyasamaja Center Blog

It’s human nature to want to buy stuff…more and more stuff. That being said, why not try to buy from socially responsible companies? Many companies donate a percentage of their sales to charity (for example, Paul Newman’s company has donated over $400 million to charities since 1982 from the sale of grocery items.

A new company, Fed By Threads, specializes in Made-In-America organic ethical vegan clothing that feeds 12 emergency meals to hungry Americans via foodbanks per item sold. The company’s founders, Jade Beall and Alok Appurdurai, created the company when they learned about the tremendous suffering that sheep, silkworms, cows, goats and other animals experience in the production of clothing. They also are firm believers in paying fare wages to garment workers and in keeping these jobs in America.

Also, the number of socially responsible / sustainable investment mutual funds has grown over the years. Some lend money…

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Robots ‘R Us, installment 2

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The Steam Man of the Prairies, 1868. Public Domain.

The Steam Man of the Prairies, 1868. Public Domain.

An obscure author, Edward S. Ellis, who published a dime novel called The Steam Man of the Prairies 145 years ago, may prove to have been a visionary according to two recent news articles.

The first, in the New York Times, reports that Google quietly acquired seven robotics companies over the last six months (Google Puts Money on Robots).  The scale of the investment is huge and appears to be aimed at automating manufacturing processes.  “The opportunity is massive,” chirped Andrew McAfee, an M.I.T. research scientist.  “There are still people who walk around in factories and pick things up in distribution centers and work in the back rooms of grocery stores.”

The second article I noticed bears an uncanny relation to the cover of  The Steam Man.  The California DMV has set rules for companies aiming to test automated cars (Driverless Cars Could be Cruising California Roads by Spring).  To put it in the terms of the M.I.T scientist, we may soon be able to robotize trucks and remove even more inefficient humans from the workforce.

The problem with this manufacturer’s wet dream should be obvious.  Robert Reich, former Secretary of Labor under Bill Clinton puts it simply: “the economy remains lousy for most people. It will likely remain that way: As technology and globalization take over the economy, the U.S. has no national strategy for creating more good jobs in America.” (The True Price of Great Holiday Deals).

Economic discussion, with few exceptions, focuses on how to get back to the good old days of (relatively) full employment and opportunity for those who work hard.  Politicians bicker over which levers to pull, but no one dares to ask the fundamental question: has the structure of the world economy changed too much to recapture that particular sort of past “good times?”

A few years ago, news got out of worker mistreatment at Foxconn, the huge Chinese assembly plant where much of our high-tech gear is assembled.  Foxconn agreed to reforms, and the CEO announced plans to deploy a million robots.  By December 2011, robotic arms had reduced the number of workers on certain assembly lines from “20 or 30 down to 5.”  As we argue over fair wages for fast food workers, it’s a good bet their employers are working on ways to automate the task of making a burger, which can’t be harder than plugging components into a motherboard.

The problem, of course, is that downsized workers will not be buying either Happy Meals or iPhones.

Last March, in a post called Robots ‘R Us (?), a first look at such issues, I quoted a blogger named Orkinpod who was already considering them in depth.  On Feb. 27 he said:  “When the future arrives (and I believe that it is very, very close), and machines can supply all the things that humans could possibly ever want, what is everybody going to do?”

One thing many may wind up doing is working on food production.  Last summer I wrote of a compelling PBS NewsHour series, “Food for 9 Billion” (1).  That’s the total number of hungry humans who will occupy the planet in 2050 as the amount of arable land continues to shrink.  One of several examples given of coming change was Singapore, where five million people live on an island with only 240 acres of undeveloped land.  A 50 year old Singapore engineer developed a revolutionary type of vertical greenhouse that prompted the Directer of the National Institute of Education to say, “I think, eventually, urban factories for vegetable production will take the place of electronic factories in Singapore.”

It’s a grand irony to reflect that industrialism, which began by channeling people out of agriculture, may have succeeded too well; its end game my involve shifting some of them back into food production again.  But what about everyone else?  What happens as robotics and marvels like 3D printers leave ever more people idle?  Insiders aren’t even asking the question, though science fiction writers have since the mid 20th century.

robot3

Unfortunately, in stories where humans go up against robots, the outcomes are usually not the ones we would like to see.

Pope Francis on Economic Justice

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Pope Francis

“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses 2 points?” – Pope Francis (1)

On Tuesday, Pope Francis delivered a sharp rebuke of unfettered capitalism as “idolatry of money” that will lead to “a new tyranny.” (2)  His language was specifically directed at those in the United States who continue to defend “trickle-down economics,” which he said “has never been confirmed by the facts, [and] expresses a crude and naive trust in the goodness of those wielding economic power.”

“Meanwhile,” he said, “the excluded are still waiting.”

President Obama said he was “hugely impressed with the pope’s pronouncements.”  Nevertheless, on Wednesday, the US announced it will close its Vatican embassy as a “cost saving measure.” (3)  The seven embassy staffers will be retained, just moved beyond the borders of Vatican City, which is the world’s smallest sovereign nation.

Republican senators, many of whom still advocate the trickle-down policies the pope condemned, were quick to denounce the administration’s move as “a slap in the face to Catholic Americans around the country.”

Though I’m not a Catholic, I find myself deeply grateful on this day of thanks, for the current Vicar of Christ.  When politicians of all persuasions spend most of their time defending an increasingly dysfunctional status quo, it is refreshing and marvelous to find a world leader willing to speak the truth.

 

Informed Citizen Disorder

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Words can sometimes illuminate.  Bill Moyers’ recent interview with Marty Kaplan, Professor of Entertainment, Media, and Society at USC, gave me a phrase that crystalizes the sense of despair that increasingly follows attending to current events.  “Our spirits have been sickened by the toxins baked into our political system,” Kaplan says.  That’s one definition of what he calls, “Informed Citizen Disorder.”

Marty Kaplan by adamrog, CC-by-SA-3.0

Marty Kaplan by adamrog, CC-by-SA-3.0

Kaplan has an impressive and varied resume; a degree in Microbiology from Harvard; a Ph.D in Modern Thought and Literature from Stanford; twelve years as a Vice President at Walt Disney Studios.  Kaplan wrote speeches for Walter Mondale and co-authored the screenplay for The Distinguished Gentleman (1992) starring Eddie Murphy.  He was the founding Director of the Norman Lear Center at USC, which studies “the social, political, economic and cultural impact of entertainment on the world.”

In the interview with Moyers, called Weapons of Mass Distraction, Kaplan spoke of the weeks he recently spent in Brazil, watching the widespread protests against “political corruption, economic injustice, poor health care, inadequate schools, lousy mass transit, [and] a crumbling infrastructure” while the government spends billions to host the 2014 World Cup and the 2016 Summer Olympics.

One of the obvious questions Kaplan asks is where are the protests in our country?  With ills so blatant and parallel to Brazil, where is our outrage?

“Sickened spirits,” is one of his answers.  Another is misdirection; what passes for journalism often has us asking the wrong questions as it feeds us “the infotainment narrative of life in America.”  Learned helplessness is another factor that Kaplan often cites.

Learned helplessness entered the language of psychology in a now-famous experiment conducted by Martin Seligman in 1967.  Dogs were subjected to electro-shocks with no means to avoid them.  Eventually, they stopped looking for an escape and entered a passive and “hopeless” mode.  In the experiment’s final phase, when means of avoidance were introduced, the dogs did not discover them, because the helplessness had been so thoroughly learned they no longer even tried.  Researchers had to retrain them to manipulate their surroundings again.

The analogies to our situation are obvious.  Citing incidents like the lack of change after Sandy Hook, Kaplan wonders how many times can we stand to have our hearts broken?  Answering a question from Moyers on “Informed Citizen Disorder,” he adds:  

“Ever since I was in junior high school, I was taught that to be a good citizen meant you needed to know what was going on in your country and in your world. You should read the paper, you should pay attention to the news, that’s part of your responsibility of being an American.

And the problem, especially in recent years, is the more informed I am, the more despondent I am, because day after day, there is news which drives me crazy and I want to see the public rise up in outrage and say, no, you can’t do that, banks. You can’t do that, corporations. You can’t do that polluters, you have to stop and pay attention to the laws, or we’re going to change the laws.

…every time that doesn’t happen…something bad happened and nothing was done about it…the sadder one is when you consume all that news…all the incentives are perverse. The way to be happy, to avoid this despondency is to be oblivious to it all, to live in Aldous Huxley’s ‘Brave New World.'”

Despite everything, Kaplan remains an optimist.  “I have kids,” he says, “I have to be.  The world has kids, we have to be.”  The alternative to optimism, Kaplan warns, is to “medicate yourself with the latest blockbuster and some sugar, salt, and fat that’s being marketed to you.  The only responsible thing that you can do is say that individuals can make a difference and I will try…”

Not the happy-happy answer we’d get from the “infotainment” world, but though Kaplan is an optimist, he’s not going to feed us bullshit.  I urge everyone to listen to the interview or read the transcript.  A key finding with learned helplessness that researchers discovered and Kaplan cites, is that since it is based on perception rather than fact, it can be quickly reversed.  We’re not there yet, he thinks, but maybe as people become more and more unhappy with the state of affairs around them, a critical mass is building that will lead ordinary citizens to demand change as we have done in the past.