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"It is better to be drunk with loss and to beat the ground, than to let the deeper things gradually escape."

- I. Compton-Burnett, letter to Francis King (1969)

"Cynical realism – it is the intelligent man’s best excuse for doing nothing in an intolerable situation."

- Aldous Huxley, "Time Must Have a Stop"

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Tuesday, 13 January 2004

Topic: The Economy

More on class warfare:
Work is for losers. Portfolios are for winners - real men.
FDR was the worst, and most insidiously evil president in history.
No, I'm not making up this stuff.

In my recent posts here on the issue of the economy and job loss I was edging toward some sort of unified theory about capitalism and work. Sort of.

Friday, 9 January 2004, at the end of The Brave New World, I said, with some bitterness, "Best to own a business - be a capitalist - and not to work for one."

Well, here is someone as bitter, who draws the same conclusions.

See Good for Investors, Bad for the Rest

Harold Meyerson, The Washington Post, Wednesday, January 14, 2004; Page A19

Meyerson opens with this:
If you work for a living in George W. Bush's America, you're a sap.

Take a quick look, or a long one, at the tax code as Bush has altered it during his three years as president, and you're compelled to conclude that work has become a distinctly inferior kind of income acquisition in the eyes of the law. Bush tax policy rewards investment and inheritance. Relying on work for your income, by contrast, turns you into a second-class citizen.

In his first round of tax cuts in 2001, Bush got Congress to phase out the estate tax by 2010. Last year, with Republicans in control on Capitol Hill, he reduced the top tax rate on dividends from 39.6 percent to 15 percent, and brought the capital gains tax rate down from 20 percent to 15 percent as well.

This year, his new budget proposes that families be allowed to shield as much as $30,000 yearly on their investment income, which will abolish all remaining taxes on such income. Meanwhile, the income tax cuts to most middle-class families don't exceed a couple of hundred dollars, and payroll taxes for employees remain untouched. In part, this devaluing of work is simply an expression of Bush family values. As Kevin Phillips points out in his new biography of the Bush dynasty, the Bushes don't do anything so vulgar as going into professions. Rather, the clan lives by its connections. For George W. and his brothers, work has meant riffling through Pappy's Rolodex. Theirs is the cronyest form of capitalism.

But a broader theory is at work here, too. It says that investment, rather than labor, powers economic growth, so rewarding investment is merely the most direct way to help the economy.
I'm so glad it's just not me.

It seems the current theory, or the theory of the current administration, is that Clark and the Democrats have it all wrong. Tax breaks for ordinary working folks who might actually spend the money and fire up the economy won't do the economy any good.

You have to get business, particularly large corporations, and the wealthy, feeling good and optimistic. That's where the growth begins.

Meyerson's take on that?
A lovely theory, but if anyone thinks the Bush tax cuts have spurred economic growth, I have a low-tax investment in a bridge to Brooklyn. To be sure, investment income and corporate profits are high. But just 278,000 new jobs have been generated since June, which means the recovery is about 7.5 million jobs shy of the norm for post-World War II recoveries. Bush's Council of Economic Advisers had predicted job growth of 510,000 from the 2003 tax cuts, plus another 1,335,000 new jobs, during the second half of last year.
This seems to be the worst unemployment situation since 1944-45, when WWII was running down. The very worst by far.

Yeah, well, but corporate profits are way up. What about that? Doesn't that matter?

Well, what about that? One doesn't get warm optimistic fuzzies about that when you cannot find work. And a lot of people cannot.

But corporations are making tons of money.

Ah yes, but I was writing specifically about outsourcing and jobs disappearing because of that. How does outsourcing and tax policy fit in here?

Here's how Meyerson sees that:
Outsourcing has turned the phrase "investment-led growth" into the grimmest of oxymorons. It means that Bush's tax policy subsidizes job growth in India and China rather than the United States. And in failing to create more employment here at home, the tax cuts have also helped depress wages. Real wages in the United States actually fell 0.7 percent in the fourth quarter of last year.
And he says this of the response of those who would run against Bush:
To all this, the Democratic presidential candidates have proposed a reversal of the Bush tax priorities. John Edwards is the most explicit, calling for an increase in taxes on most forms of investment income while lowering the taxes on employment. Wesley Clark has proposed eliminating income taxes for more than half the households in the United States, and Howard Dean is reportedly mulling over a plan to cut payroll taxes.

All that is good in itself, but doesn't really grapple with the conundrum of job creation in a globalized economy.
So what does?

Meyerson argues for something like FDR-style public works projects. Public investment. Remember the WPA and NRA (not the National rifle Association - think the 1930s and dams and roads and things).

Ah yes, but I have been on the receiving end of many a lecture from my conservative friend on how FDR was by far the worst president in American history, responsible for destroying the American character. How? He made people lose their self-reliance and sense of personal responsibility, turning them into infantile whiners, people who saw themselves as victims, who felt is was their right to have some "mommy government" intervene and make things all better, when they should have changed their attitudes and taken responsibility for themselves - and acted like adults, not self-righteous children. FDR created a nation of dependent whiners.

And it's not just my conservative friend. Perhaps later I'll review the three or four books published in the last eighteen months that make that argument.

Is all this class warfare? You bet.

Posted by Alan at 22:35 PST | Post Comment | Permalink

Topic: World View

Another recommendation...

Over at MetropoleParis Ric Erickson has some comments on Starbucks opening their first caf? (using the term loosely) in Paris. Check it out.

And he always has good photos, and some odd ones, like these.


My comments on the Paris Starbucks opening are here, and here.

And if you like Ric's site, do support it with a donation of course.

Posted by Alan at 21:31 PST | Post Comment | Permalink
Updated: Tuesday, 13 January 2004 21:50 PST home

Topic: Bush

Political Discourse Made Simple

The Price of Loyalty: George W. Bush, the White House and the Education of Paul O'Neill
Ron Suskind, Simon and Schuster Adult Publishing Group, 368 pages
Publication Date: January 13, 2004

This is all over the news. Everyone is talking about it.

Paul O'Neill, who had been CEO of Alcoa, was Bush's first Treasury Secretary. He lasted two years, and then got fired. He shot off his mouth a lot. He thought the tax cuts for the rich were kind of stupid and wouldn't do much good. He thought the tariffs on imported steel would cost jobs, and be stupid too. That sort of thing.

Yeah, and in the book he says the planning for the invasion and occupation of Iraq started nine days after Bush took office, eight months before the WTC and Pentagon attacks. We were going to removed the government of Iraq and occupy that country no matter what - we were going to war. It had been decided. Bush and his crew just decided not to tell us that.

Some people find this disturbing. Some of us just sigh.

Eric Alterman at MSNBC's Altercation has been listening to those on the right, the Bush guys who say this is nothing to fret about. He hears what they're saying.
"It's no big deal that Bush and company were plotting the invasion of Iraq in January of 2001 without ever mentioning it in the election; that was the policy of the Clinton administration too. Everybody wanted to overthrow Saddam Hussein." Or in other words, "Why is this even news? Let's get back to what a brave selfless leader we have."

It's hard to know where to begin over how disingenuous this argument is. I mean sure, I wanted to overthrow Saddam Hussein too. The question, like all questions, is one of means and ends.

Did I want to overthrow Saddam Hussein if it meant undermining our democratic debate with deliberate deception; spending hundreds of billions, perhaps trillions of dollars in reconstruction costs; killing hundreds, if not thousands of young men and women; killing thousands of Iraqis; inspiring more anti-U.S. terrorism; nearly destroying the Atlantic Alliance; and making the U.S. more isolated and hated than it has ever been in its entire history?

Um, no.

And neither would most Americans, I'm pretty sure.

And if Bush had been honest with the country about his intentions during the 2000 election - and if the media had paid more attention - Nick Lemann had this in the New Yorker in January 2001, by the way - instead of worrying about Gore's alleged character flaws, Bush would have certainly lost the election by a big enough margin to prevent the Supreme Court from handing him his minority "victory."
Maybe so. Too late now.

Posted by Alan at 16:39 PST | Post Comment | Permalink

Topic: Photos


On the poetry page at (the website of an old friend) you will find a new item called "Snowbird."

Winter in the rural area outside Boston sounds awful.

The poem ends with this:
Feeling he was quite done for the day,
He picked up the phone
And waited on hold,
For a ticket
To fly to LA.
It's early afternoon here in Los Angeles, in Hollywood. It's in the low eighties - a light breeze, and no humidity. A very few scattered clouds - high, cirrus. And this guy stands just at the edge of my balcony.

I don't miss my years in London, Ontario. Just my Canadian friends.

But I like Boston. I know some great pipe shops there. Boston in the summer is best, I suppose.

This is Los Angeles right now.

Posted by Alan at 13:38 PST | Post Comment | View Comments (1) | Permalink
Updated: Tuesday, 13 January 2004 15:45 PST home

Topic: The Economy

The issue? Unemployment and outsourcing of American job overseas.

On Friday, 9 January 2004 I posted this The Brave New World: "While workers are necessary, and so have to be kept alive, they have no hope of any better treatment since they are infinitely available, replaceable, and generally interchangeable." Really. That's a fact, Jack! and reprinted it in the weekly magazine here.

The issue? Unemployment and outsourcing of American job overseas.

This was a discussion of the eighteenth century economist David Ricardo and his "Iron Law of Wages." The iron law of wages is simple and logical. It says that wages will tend to stabilize at or about subsistence level. That seemed inevitable to Ricardo, since while workers are necessary, and so have to be kept alive, they have no hope of any better treatment since they are infinitely available, replaceable, and generally interchangeable.

And that is the problem. Previously the pool of available labor was limited - a matter of geography. Now, for the first time in history, thanks to modern computer networking and telephony, we really do have "infinitely available" labor, worldwide, twenty-four hours a day. This IS new.

Yes, Ricardo's wage theory had seemed untrue. The supply of competent workers in a given place was not unlimited; neither workers nor industry were perfectly mobile, and labor demonstrated in the last two centuries that it could mobilize and defend itself. This "iron law of wages" would function only if the supply of labor is infinite and totally mobile.

And now we pretty much have that. Globalization.

In reaction Phillip Raines sent this:
Just a quick note to express my appreciation of the op-ed on the worker and with globalization there is no end to replaceable labor. The worker is an issue near and dear to my heart. I heard a consumer advocate poo-pooing the efforts of furniture builders lobbying to impose tariffs on Chinese furniture. Asian manufacturing is taking over and unless the craftsmen get their real estate licenses they have little hope of surviving. Real estate and journalism are the only professions that won't get out sourced. Pitiful.
Well my reaction was this:
The thing is that this is a problem without an obvious solution. Tariffs just drive prices higher for no reason - one pays more for the same crap. Now that we actually have a real global labor market, things will shake out to those who can "do it best for the lowest cost" getting the work. Time and distance don't matter any longer. And that had to happen. This is part of the "global village" business Marshall McLuhan failed to consider. Small world, uncomfortable world.

Of course it's not quite as simple as that - it's more like the work goes to those "who can do it good enough at a lower cost."

Most stuff sold is "good enough" stuff. In theory there should still be a market for fine, specialized, unique work. Real craftsmanship, not ordinary things. For common, useful "good enough" items - jeans, shirts, shoes, pressed-wood dining room chairs, and answers to questions about how to set up your DVD deck or get your mail-in rebate - well, that can be done most anywhere by anyone. We ain't special.

So if you want a cotton shirt that's "good enough" Wal-Mart will fix you up. And it'll come from Bangladesh. If you want something really fine, well, it won't.

Most folks look at the choices, look in the wallet, and, each item at a time, do the trade-off. What's "good enough" is usually what they buy.

Damn, I sound like William Morris and the Craft Movement assholes of the late nineteenth century! But no, some things are best mass-produced. Canned anchovies - and socks and light bulbs and all the rest. Fine stuff. Useful. I'm not a Luddite. I'm not going to handcraft my own writing paper. So my pipe cleaners come from Senegal. So what? Global mass production is fine for the bits and bobs of life - and political pressure will sooner or later take care of the sweatshops and exploitation of the downtrodden. Really. As world communication also becomes more globally open you can't hide that crap.

But I'm still out of work.
Well, this provoked a reaction from Rick Brown, the "news guy" as I call him:
Not sure if real estate can be outsourced, although there may be some of that whenever the economy is such that the Japanese and Saudis buy up all those buildings in New York City.

But journalism has been quietly outsourced for years. We just don't hear much about it because journalists usually think of reporting on news business issues as a form of, pardon my French, professional masturbation.

Whereas newspapers and networks used to always send Americans overseas to report back, in recent decades, they've relied more on lower-wage locals to do the job. In the case of TV, they've also turned more to buying video wallpaper from the cheaper subscription-based "agencies" such as Visnews (now Reuters TV) and UPITN (I forget what they're called now). AP and UPI used to dominate the American wire service scene, but UPI pretty much folded, giving way to AFP and Reuters. And AP has always leaned heavily on its foreign members.

My gripe with journalists being outsourced is not that we need to save those jobs for Americans (what difference would it make anyway, since they'd be living overseas and spending their money there?), it's that we Americans are not getting as much foreign news as we used to, and certainly not as much as we need. When spending becomes an issue, it's apparently just not as important to have a reporter on the scene, much less one who knows how to explain stories in ways Americans can understand.

But I must admit, I've never fully understood what I see as the paradoxical attitude of so many liberals, who one might think would have a humanitarian concern for all the world's peoples, arguing "America First" positions when it comes to labor.

On principle, I personally find it hard to screw the rest of the world in the name of maintaining Fortress America's sumptuously high lifestyle. I don't understand why some Chinese guy in Shanghai should lose his job making Huffy bikes and watch his family starve, just because some American guy in Ohio wants to keep that job for himself just so he can afford to buy a Hummer.

(Disclosure: Yes, my wife is a highly-paid executive in an American company, and I might not be so quick to believe the aforementioned if she gets downsized. But I can tell you this now, that if it does happen and I do change my thinking because of it, I'll be wrong. Why? Because I shouldn't allow myself to become a self-involved conservative who's ability to see the big picture is limited by what he sees going on in his own pocketbook.)

Concerning the issue of quality: That's not a real issue. Examples follow.

Example #1: Why is it that air travelers cram themselves into sardine cans and sit there for four hours on a flight to the coast, with nothing to eat but a bag of peanuts and a Diet Pepsi? I find this especially relevant whenever I open any books about the early airline industry that show magazine advertisements with photos of hypothetical air passengers in the future, sitting around tables, playing cards and ordering gourmet meals.

The answer? Most travelers look at price, not quality. Airlines give customers only what most customers are willing to pay for, and an airplane roomy enough for card tables costs more per passenger-mile than most people want to pay just to go from here to there.

Example #2: In fact, when it comes to quality, there are many higher quality products made more cheaply overseas that sell for less than vaguely similar products made here. Example: My wife's Honda Civic Hybrid. At this point, you can't even buy an American-made hybrid car.

Yes, sweatshops are a problem that we, the world, need to do something about. Someone does need to put pressure on those factories, but to make them change their ways, not to close them down. After all, we need to remember that the real problem with sweatshops is the inhumane conditions the worker is forced to endure, not that someone over here has dibs on that foreign guy's job. (But I also agree with Alan when he says globalization of media means that bit-by-bit, sweatshops will probably become less sweaty.)

If you don't agree with my position, and feel that we Americans have a birthright to protect American jobs, then I advise two concurrent courses of action:

1.) Join a "Buy American" campaign that fights for high tariffs and boycotts foreign goods, and
2.) ... okay, I was going to say "Vote Republican," but obviously that won't help. Since big business, which is an important part of the GOP core, loves cheap labor and is therefore in favor of open markets, even though that sort of thinking runs counter to the famously conservative "fuck the foreigners, let's look out for ourselves" attitude, I guess there is no major political party that panders to precisely what you might be looking for in this area. But in the meantime, you may want to keep an eye peeled for Pat Buchanan and Ralph Nader.

I swear that what I say here is the truth, the whole truth, et cetera, but I'd guess the reason you don't hear much about it elsewhere is because there's no party that stands for what I believe, either. In other words, my opinion has the disadvantage of sounding anti-labor and anti-American at the same time, which leads us to that question Mort Sahl used to end his act with: "So, is there anyone here I haven't offended?"

And this is why, my fellow Americans, that I am announcing to you today my solemn intention to NOT become a candidate for the office of the President of the United States! God Bless this Great Country of Ours ... and especially, the child who's got his own!
And your reaction? You can add a comment here, or send one by email to of course. Let me know if you mind my publishing what you say.

Posted by Alan at 10:19 PST | Post Comment | Permalink

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