As seen from Just Above Sunset

Friday, 10 June 2005

Topic: The Economy

Chasing the Zeitgeist: "Are there no prisons, are there no poor houses?"

The May 22 issue of Just Above Sunset was hard to assemble. The zeitgeist ("the general intellectual, moral, and cultural climate" or, if you will, the spirit or "ghost" of the times, if that's what the German means) kept running away. Monday of the week I thought that week’s topic discussed everywhere would be the New York Times stirring up issues of class, but on Tuesday the Newsweek Koran story broke, and Wednesday everyone was talking about George Galloway blowing everyone away in the Senate hearing, on Thursday the talk was all of the responsibilities of the press and possible censorship, and Friday Laura Bush landed in the Middle East as probably the only person we could send there now without too much problem, and even then she had some trouble. As I said before, you can chase the zeitgeist all you want. It’s a slippery devil.

That week you could read A Touch of Class - a riff on the Times series and data tables Class in America: Shadowy Lines That Still Divide (May 15, with tables and interactive graphics here) – and by the way, in the Components of Class online thing I score in the 87th percentile (pretty classy).

In the item, Orwell came up. Lots of references came up. But a good deal of the discussion had to do with class mobility – not much of that these days – and why most of the heartland, or whatever we are now calling the fly-over part of America, those on the lower side of the economy, persist in supporting the current folks in power, who cut taxes for the rich and cut programs for those in the middle, and lower.

The whole discussion was buried by other issues that week, but in the last line there was the claim the issue would be back.

It's back.

Samantha Henig in the Columbia Journalism Review on June 5 notes that three major newspapers "decided within months, and even days, of one another to publish a major series exploring class in America."

The besides the New York Times?

- The Los Angeles Times "New Deal" series was last October (here).

- The Wall Street Journal published own "Moving Up: Challenges to the American Dream" on May 13 (here but you have to be a paid subscriber to read it). That seems to be the first installment of a series that will continue.

Henig's breakdown?

The Wall Street Journal led off its Friday the 13th sneak attack on the New York Times (newspapers love to play these Beat ya! games) with a headline (that left no doubt as to the series' premise: "As Rich-Poor Gap Widens in the U.S., Class Mobility Stalls, Those in Bottom Rung Enjoy Better Odds in Europe."

The piece, by David Wessel, effectively dismantled the idea of the American Dream with evidence that social mobility in the United States is no longer what it's cracked up to be. In fact, even "class-bound Europe" might offer more of an opportunity to scale the ranks than America. Although most Americans still cling to the idea that "their country remains a land of unbounded opportunity," as Wessel put it, leading economists and sociologists recently have accepted that not only does it matter who your daddy is, but it matters more now than it did thirty years ago.

? Two days later, the New York Times anteed up with a long, rather windy introduction to its own class series, an essay that was striking, among other things, for its lack of actual reporting. It, too, included the obligatory Benjamin Franklin reference, as well as quotes from Becker and Solon.

Once it was done clearing its throat for the entire length of its opener, the Times in subsequent parts of its series served up an avalanche of detailed, if largely anecdotal, reporting. But in the process it essentially abandoned the sort of critical analysis of class in America over the past few decades that the Journal and, earlier, the Los Angeles Times, had attempted. Instead, the Times set out to look at how class affects individuals. Not individuals in the aggregate, but rather a few very specific individuals: "a lawyer who rose out of an impoverished Kentucky hollow; an unemployed metal worker in Spokane, Wash., regretting his decision to skip college; a multimillionaire in Nantucket, Mass., musing over the cachet of his 200-foot yacht." Each day brought a new topic - health, marriage, religion, education, immigration, corporate nomads - with a new set of stories to illustrate how conceptions of class color each of those topics.

Much of the rest is a lengthy discussion of these techniques ? and worth a close reading if you are interested in how the press should or should not report ? but at least the topic is in the air again, or part of the zeitgeist.

But what was said, not how it was said, was more interesting ? and the local paper out here led the way -

? months before the New York Times and Wall Street Journal were exploring class, the Los Angeles Times was drawing some conclusions of its own - and timely ones, at that. Starting its series in the heat of election fever, the Times drew connections between the isolated rags-to-riches or riches-to-rags tales, the academic research showing stagnated social mobility, and the political implications of the two.

The first article of its series, by Peter G. Gosselin, published on October 10, 2004, called attention to a deliberate move by government leaders that began 25 years ago to rely upon and even subsidize the free market, while cutting back on government regulation and reining in social programs. The resulting economic makeover, Gosselin says, "has come at a large and largely unnoticed price: a measurable increase in the risks that Americans must bear as they provide for their families, pay for their houses, save for their retirements and grab for the good life." He questioned President Bush's campaign assertions at the time that "people are better off relying on themselves, rather than on business or government, in case of trouble" by providing both anecdotal and analytical evidence to the contrary.

Instead of just presenting individual anecdotes and relying on pathos to keep people reading, leaving the question of "but how do we fix this?" dangling unsaid, the Los Angeles Times dared not only to ask, but also to answer. ?

Why so many people less financially secure than ever before "even as the nation, by many measures, has grown far more prosperous." It was because of "a deliberate shifting of economic risks from the broad shoulders of business and government to the backs of working families."

So? Stop doing that.

In fact, the Los Angeles Times came back on May 15, the same day that the New York Times published its extensive overview of class, with an article (a special in the business section) examining the current administration policies - Bush's recommendations for Social Security, and the recent court ruling which permits "United Airlines' parent to dump its pensions on the federal government," thereby leaving "workers and their families bearing big new risks." It wasn't pretty. In other words, something is up.

Friday, June 10, in the New York Times, Paul Krugman in Losing Our Country decides to explain just what's up ? as each major newspaper on each coast is now working the issue.

Krugman?

? The middle-class society I grew up in no longer exists.

Working families have seen little if any progress over the past 30 years. Adjusted for inflation, the income of the median family doubled between 1947 and 1973. But it rose only 22 percent from 1973 to 2003, and much of that gain was the result of wives' entering the paid labor force or working longer hours, not rising wages.

Meanwhile, economic security is a thing of the past: year-to-year fluctuations in the incomes of working families are far larger than they were a generation ago. All it takes is a bit of bad luck in employment or health to plunge a family that seems solidly middle-class into poverty.

But the wealthy have done very well indeed. Since 1973 the average income of the top 1 percent of Americans has doubled, and the income of the top 0.1 percent has tripled.

Why is this happening? I'll have more to say on that another day, but for now let me just point out that middle-class America didn't emerge by accident.

So, as they said out here in Los Angeles, this is deliberate?

Well, yes (and the emphases are mine) -

Since 1980 in particular, U.S. government policies have consistently favored the wealthy at the expense of working families - and under the current administration, that favoritism has become extreme and relentless. From tax cuts that favor the rich to bankruptcy "reform" that punishes the unlucky, almost every domestic policy seems intended to accelerate our march back to the robber baron era.

It's not a pretty picture - which is why right-wing partisans try so hard to discredit anyone who tries to explain to the public what's going on.

These partisans rely in part on obfuscation: shaping, slicing and selectively presenting data in an attempt to mislead. For example, it's a plain fact that the Bush tax cuts heavily favor the rich, especially those who derive most of their income from inherited wealth. Yet this year's Economic Report of the President, in a bravura demonstration of how to lie with statistics, claimed that the cuts "increased the overall progressivity of the federal tax system."

The partisans also rely in part on scare tactics, insisting that any attempt to limit inequality would undermine economic incentives and reduce all of us to shared misery. That claim ignores the fact of U.S. economic success after World War II. It also ignores the lesson we should have learned from recent corporate scandals: sometimes the prospect of great wealth for those who succeed provides an incentive not for high performance, but for fraud.

Above all, the partisans engage in name-calling. To suggest that sustaining programs like Social Security, which protects working Americans from economic risk, should have priority over tax cuts for the rich is to practice "class warfare." To show concern over the growing inequality is to engage in the "politics of envy."

But the real reasons to worry about the explosion of inequality since the 1970's have nothing to do with envy. The fact is that working families aren't sharing in the economy's growth, and face growing economic insecurity. And there's good reason to believe that a society in which most people can reasonably be considered middle class is a better society - and more likely to be a functioning democracy - than one in which there are great extremes of wealth and poverty.

Reversing the rise in inequality and economic insecurity won't be easy: the middle-class society we have lost emerged only after the country was shaken by depression and war. But we can make a start by calling attention to the politicians who systematically make things worse in catering to their contributors. Never mind that straw man, the politics of envy. Let's try to do something about the politics of greed.

That's one angry Yale economist. But not far off the mark. As mentioned before, I have heard the same arguments from my conservative friends ? opposition to these ever-increasing tax cuts for the extremely wealthy is "class warfare" and just plain envy of those who did something with their lives, or inherited vast sums from someone in the family who once did something with their lives. Why should they support lazy people with no sense of personal responsibility. And so on and so forth?

Why?

Bob Herbert explained four days earlier in the New York Times - and cited the Los Angeles Times of all things - in The Mobility Myth -

The war that nobody talks about - the overwhelmingly one-sided class war - is being waged all across America.

Guess who's winning.

A recent front-page article in The Los Angeles Times showed that teenagers are faring poorly in a tight job market because of the fierce competition they're getting from older workers and immigrants for entry-level positions.

On the same day, in the business section, the paper reported that the chief executives at California's largest 100 companies took home a collective $1.1 billion in 2004, an increase of nearly 20 percent over the previous year. The paper contrasted that with the 2.9 percent raise that the average California worker saw last year.

The gap between the rich and everybody else in this country is fast becoming an unbridgeable chasm.?

And what do we have here ? is the right correct in sensing a vast left-wing anti-free-enterprise and union-loving media conspiracy? Are the poor revolting against their betters? (If so, they would have to account for the Wall Street Journal exploring the same topic ? but perhaps one can assume the Journal, as America's business newspaper, is worried that we might be facing a new and sudden scarcity of consumers with ready cash to buy this and that, and thus something really, really bad for corporations.)

A conspiracy? You might think so when Herbert says things like this -

?. The bottom line is that it's becoming increasingly difficult for working Americans to move up in class. The rich are freezing nearly everybody else in place, and sprinting off with the nation's bounty.

Economic mobility in the United States - the extent to which individuals and families move from one social class to another - is no higher than in Britain or France, and lower than in some Scandinavian countries. Maybe we should be studying the Scandinavian dream.

As far as the Bush administration is concerned, the gap between the rich and the rest of us is not growing fast enough.

? Many in the middle class are mortgaged to the hilt, maxed out on credit cards and fearful to the point of trembling that all they've worked for might vanish in a downsized minute.

The privileged classes, with the Bush administration's iron cloak of protection, avoid their fair share of taxes, are reluctant to pay an honest dollar for an honest day's work (the federal minimum wage is still a scandalous $5.15 an hour), refuse to fight in their nation's wars, and laugh all the way to their yachts.

The American dream was about expanding opportunities and widely shared prosperity. Now we have older people and college grads replacing people near the bottom in jobs that offer low pay, no pensions, no health insurance and no vacations.

A fellow named Mark McClellan, who was bounced out of a management position when Kaiser Aluminum closed down in Spokane, Wash., told The Times in the "Class Matters" series: "I may look middle class. But I'm not. My boat is sinking fast."

Yeah, so? "Are there no prisons, are there no poor houses?"

But the fellow who said that in the Dickens novel is not presented as the good guy for saying those words. (You could look it up.)

Times have changed since then. Actually, much said on the right, and by the administration, now sounds just like that ? and now such questions are accepted as simply urging people to accept personal responsibility, or suffer the consequences. Life is risk. Deal with it. And don't ask anyone to join you in sharing life's risks ? Americans believe in taking care of themselves.

A brief aside ? my conservative friend, as we shared a second or maybe third bottle of Tuscan wine, declared insurance, the whole design of shared risk pools for home and auto and healthcare and whatever, was just immoral. I think the idea was that every individual should be responsible for paying for what happens in life ? auto accidents, major and even catastrophic health problems and that sort of thing. If you don't have the money yourself to take care of such things, then that's your problem and no one else's, as otherwise you're just a parasite on the successful folks. Really? Ah, maybe it was the wine.

In any event, there is something afoot here with all this press.

Been chasing the zeitgeist. Finally caught something.

Posted by Alan at 20:35 PDT | Post Comment | Permalink
Updated: Friday, 10 June 2005 20:53 PDT home

Sunday, 15 May 2005

Topic: The Economy

Meme Watch: A Touch of Class

Last Monday, May 9, in Our Turn: The Greatest American of All Time (revised and posted today in Just Above Sunset, the parent site to this web log), you would find a discussion of how the Discovery Channel and AOL are teaming up for seven hours of primetime silliness to be telecast this summer. The idea is for us all to make our choice for “the person who has most embodied the American dream, having the biggest impact on the way we think, work and live.” That would be, of course, The Greatest American of All Time. Six days after the initial post here the contest seems to have gained the attention of the big-time web logs – Kevin Drum of Political Animal here and Stephen Bainbridge of UCLA here - and a search on DayPop or Google will lead you to many more.

But there is no prize for being first. Just know that the conversation that began here with Ric Erickson, editor of MetropoleParis, reporting on the French version of this BBC gimmick - Le plus grand Francais de tous les temps - has bubbled up nationally as we prepare for the American version in June. Maybe CNN will do something on it next week, although there are some folks who work at CNN who are most unhappy with AOL – as when their parent company, Time-Warner, was absorbed by AOL the resulting drop in all the stock employees owned was more than a bit painful. Rick, the News Guy in Atlanta, knows all about that. Maybe CNN will take a pass on this.

Oh, and note that Kevin Drum of Political Animal points to the Canadian version of the BBC contest - The Greatest Canadian of All Time. Last November those odd folks up north chose Tommy Douglas, the former Saskatchewan premier, the man credited with being the founding father of Canada's health-care system, as The Greatest Canadian of All Time. Go figure.

Anyway, this week’s national conversation on the net, and maybe beyond, seems to be moving on. The new topic is the idea of class. No, it was not Tom DeLay last week saying that the Democrats offered the country nothing - "No ideas. No leadership. No agenda. And, just in the last week, we can now add to that list, no class." Even if Rush Limbaugh got all excited by this stunning observation, that moment passed. And too, DeLay has a pretty low quotient of class - however one might want to define it - to be saying such things, and I’m pretty sure Limbaugh is not an expert in such matters.

No, we are now talking about class in another sense. Think class warfare, or class mobility, or social caste - that sort of thing.

In the Sunday New York Times, which may or may not be "the nation’s newspaper of record" depending on your point of view, Janny Scott and David Leonhardt give us this - Class in America: Shadowy Lines That Still Divide (May 15) -

New research on mobility, the movement of families up and down the economic ladder, shows there is far less of it than economists once thought and less than most people believe. In fact, mobility, which once buoyed the working lives of Americans as it rose in the decades after World War II, has lately flattened out or possibly even declined, many researchers say.

The incomes of brothers born around 1960 have followed a more similar path than the incomes of brothers born in the late 1940's, researchers at the Chicago Federal Reserve and the University of California, Berkeley, have found. Whatever children inherit from their parents — habits, skills, genes, contacts, money — seems to matter more today.

Ah, choose your parents very, very carefully.

Well, if this is so ? and you can wade through the Times pages of tables and graphics here for data showing this is so ? then why does most of the heartland, or whatever we are now calling the fly-over part of America, those on the lower side of the economy, persist in supporting the current folks in power, who cut taxes for the rich and cut programs for those in the middle, and lower? This was discussed in the pages here last month, and it is a mystery. Could it be this?

Conservatism As Pathology
Are Bush supporters literally insane?
Timothy Noah - Posted Monday, May 9, 2005, at 8:40 PM PT SLATE.COM

In the same issue of the New York Times the columnist David Brooks argues not at all!

The big difference between poor Republicans and poor Democrats is that the former believe that individuals can make it on their own with hard work and good character. According to the Pew study, 76 percent of poor Republicans believe most people can get ahead with hard work. Only 14 percent of poor Democrats believe that.

Ah, so who is delusional?

Kevin Drum tries to sort it out -

Ever since World War II, the United States has done a phenomenal job of sorting people by talent. Not a perfect job, but an astonishingly good one nonetheless. All four of my grandparents, for example, would almost certainly have gone to college if they had turned 18 in the 1960s, but that just wasn't in the cards for any of them a century ago. Today, though, as a matter of deliberate policy, the vast majority of people who have the talent to succeed in college get the chance to try. As a result, they moved upward into the middle and upper classes decades ago, and their children have followed them.

But there's only a moderate amount of sorting left to be done. Random chance, both in nature and nurture, will always play a role in life outcomes, but that role has gotten smaller and smaller as the sorting has progressed. The result is that life roles have become more hardened. While incomes of the well-off have skyrocketed over the past 30 years, working and middle class incomes have stagnated. At the same time, the incomes ? and jobs ? they do have are far more unstable than they were a few decades ago. And as recent research indicates, most of them are increasingly stuck in these grim circumstances: every decade, fewer and fewer of them ? and fewer and fewer of their children ? have any realistic chance of moving up the income ladder.

In the face of this, Brooksian paeans to the hardworking Republican poor are little less than appalling. Clap your hands and you can be rich!

What this faux optimism masks is the astonishing real-life pessimism of modern conservatism. Among advanced economies, the United States is by far the richest, youngest, and fastest growing country in the world. By far. And yet, we're supposed to believe that an increase in Social Security costs from 4% of GDP to 6% over the next 50 years is cause for panic. We're supposed to believe national healthcare would bankrupt us ? never mind that our current dysfunctional system is the most expensive and most unfair on the planet. We're supposed to believe that broader unionization would ruin American industry, home of the highest profits and most highly paid executives in the world. We're supposed to believe that the nation's millionaires, having already had their tax rates slashed by a third over the past two decades, are still being bled to the bone by federal taxes.

It's a grim view. But then, modern conservatives are grim people, with little hope that things can ever be made better than they are today. I guess that's why I'm a liberal.

Clap your hands and you can be rich? Actually, I have heard variations on that theme from my conservative friend. (By the way, if you click and pop up the Kevin Drum items you will see he links to all the studies he cites).

Bottom line ? cut taxes for the rich. We?ll need those tax breaks next week when we make it big.

But it isn?t going to happen, or so that data indicate.

Up at UC Berkeley, the economics professor Brad DeLong has some observations, but as he served in the Clinton administration you may want to discount what he says. After all, that administration ran budget surpluses and suffered from high employment and read GDP growth, so who ARE you going to trust in this?

DeLong?s summary of the Times piece? - Janny Scott and David Leonhardt? They are, I believe, trying to make three points: (a) consumption is more "middle class" than ever before, so that (b) it appears as though class is unimportant, but (c) in reality choosing the right parents matters more than ever in America today?

Then the professor gives us some history -

This argument - that rising standards of living as a whole are making it appear that class is unimportant while in fact class matters more than ever - is an old one. It is one of the centerpieces of George Orwell's The Road to Wigan Pier. Orwell is distressed by the consumption of "cheap " by the relatively poor. He thinks: The system is taking advantage of the relatively poor by enabling them to consume commodities that they think are luxuries, but that in fact are not or are no longer so. It is conning them.

In the middle of the Great Depression in Britain, Orwell expected that the economic catastrophe would bring dismay, discontent, protest, and revolt. Yet it did not do so. Why? Orwell thought that even though "whole sections of the working class... have been plundered of all they really need" by high unemployment, they had also been "compensated... by cheap luxuries which mitigate the surface of life": fish and chips, artificial-silk stockings, tinned salmon, cut-price chocolates, movies, radio, tea.

Note the words: "palliative," "mitigate," "surface." Orwell is in the final analysis not pleased at all by the fact that:

? the youth... for two pounds ten on [installments]... can buy himself a suit which... at a... distance looks... tailored on Saville Row. The girl can look like a fashion plate at an even lower price.... [I]n your new clothes you can stand on the corner, indulging in a private daydream of yourself as Clark Gable or Greta Garbo."

For Orwell writing in the 1930s this pattern of cheap middle-class consumption masks the reality - that the working class has lost relative income, relative wealth, and relative power. It makes tolerable what should not be tolerated: that the upper class has much too large a share of the pie.

Cool. Orwell is fun ? and we all like to be compensated by cheap luxuries which mitigate the surface of life. This is the essence of Hollywood, where I live.

And the professor also gives us this -

It may be a very big mistake to think that human happiness is necessarily and significantly increased by piling up larger and larger heaps of material goods. Richard Easterlin in his Growth Triumphant points to evidence from public-opinion surveys that suggests that money does not buy happiness over time or across countries, and believes (though I think he is wrong) that people are no happier in the U.S. today than they are in India today, or were in the U.S. a century ago. Happiness is attained when you achieve your dreams and solve your problems. Material abundance helps you do so, but it also teaches you to dream bigger dreams and pose yourself more complicated problems. Easterlin thus concludes that modern economic growth is a "hollow victory": the "triumph of economic growth is not a triumph of humanity over material wants; rather, it is the triumph of material wants over humanity."

On the other hand, it may not be a very big mistake to think that human happiness consists in expanding our powers and capabilities to accomplish things (not the least of which are maintaining our comfort and satisfying our curiosity), and that wealth is a powerful tool to those ends. There is a standard American response to the claim that money doesn't buy happiness: "Your money doesn't buy you happiness? Then send it all to me. It will help buy me mine."

Any wealthy readers who wish to send me money, please contact me immediately.

In any event, you see this conversation - perhaps started by Thomas Frank with book "What's the Matter with Kansas? How Conservatives Won the Heart of America" (see this last July for a discussion) through Tom Noah discussing pathological insanity to David Brooks discussing the optimism of the Wal-Mart clerk in Topeka just knowing he (or she) with be filthy rich any day now and need some tax breaks ? is bubbling up again.

Ah, what would Jonathan Swift say about all this? Who knows? But at Rutgers University in central New Jersey their noted Swift scholar, Paul Fussell, produced what may be one of the better early discussions of these matters - Class: A Guide Through the American Status System - Summit Books; 1st ed. edition (October 1, 1983) ? ISBN: 0671449915 (reviews here)

Fussell, as I recall, wrote a lot about the Kennedy clan in this book. Who knows what he would make of the Bush family, and of the delusional minimum-wage optimists in Topeka? He did once say - ?I find nothing more depressing than optimism.? Yep. And I remember him from his 1965 The Rhetorical World of Augustan Humanism; Ethics and Imagery from Swift to Burke - but don?t we all?

In any event - heads up! The topic this week is class.

Posted by Alan at 16:49 PDT | Post Comment | Permalink
Updated: Sunday, 15 May 2005 16:54 PDT home

Wednesday, 13 April 2005

Topic: The Economy

The Economy: Better Times for Whom? Paris Hilton.

This article was sitting in the Los Angeles Times on my doorstep Monday as I was thirty-five thousand feet above Kansas, returning from a weekend hanging around Manhattan. No, I?m not rich. I was the guest of a high-powered Wall Street attorney and his family, friends for many decades. (I first met the fellow when he was my student back in the seventies ? when I was an English teacher and he was in the tenth grade.)

And what was waiting for me in my copy of the Times on the doorstep?

Wages Lagging Behind Prices
Nicholas Riccardi, Monday, April 11

Something is up.

For the first time in 14 years, the American workforce has in effect gotten an across-the-board pay cut.

The growth in wages in 2004 and the first two months of this year trailed inflation, compounding the squeeze from higher housing, energy and other costs.

Is this a problem? Well, if folks can only buy less and cheaper, perhaps so. That might slow down the economy even more, as if the price of gasoline weren?t enough alone to do that.

The details?

? This is the first time that salaries have increased more slowly than prices since the 1990-91 recession. Though salary growth has been relatively sluggish since the 2001 downturn, inflation also had stayed relatively subdued until last year, when the consumer price index rose 2.7%. But wages rose only 2.5%.

The effective 0.2-percentage-point erosion in workers' living standards occurred while the economy expanded at a healthy 4%, better than the 3% historical average.

Meanwhile, corporate profits hit record highs as companies got more productivity out of workers while keeping pay increases down.

Some see climbing profits and stagnant wages as not only unfair but also ultimately unsustainable.

Who worries about such stuff? Don?t the people with get-up-and-go and the right attitude just become wealthy, and the others have only themselves to blame? That?s what my conservative friend tells me ? this erosion in workers' living standards is the fault of the workers themselves.

And too, as the economy recovers, as it will, or so we are told, wages will finally rise again. But should they? Unassertive (lazy) non-entrepreneurial folks getting even meager wages is bad for us all, it seems -

? higher wages could hurt the economy by stoking inflation further. Employers might pass the costs on to consumers in higher prices, and that in turn might prompt the Federal Reserve to raise interest rates more aggressively, possibly slowing the recovery or even triggering a recession.

It seems that keeping folks receiving less and less real income saves us from a recession. Odd.

A writer with the pseudonym Quiddity notes another passage from the Times story that seems to indicate things aren?t really that bad -

Despite the failure of their wages to keep pace with inflation, American consumers have kept shopping. Consumer spending has continued to rise. Analysts say that's partly because some shoppers are thinking less about their paychecks and more about their biggest asset: their homes.

Home prices rose 21.1% in Southern California and 9% nationwide from February 2004 to February 2005, sheltering consumers, and the economy, from much of the pinch of higher prices.

Ah, so the pain is not real, so to speak. Refinance, buy, refinance again. And that works out here in California. Home prices have gone up between twenty and twenty-five percent for the last five years or more. Instant money.

But Quiddity points out -

First of all, not everybody has a home, and those people are really losing. Second, when inflation is being "cured" with rapidly rising home prices, you've got a problem. Nothing is being produced. Nothing is being exported. Nothing of value is generated.

But the rise in home prices will work for a while, but only up to a certain point. When that's reached, there will be no way to keep the economy chugging along at a decent rate. Then comes the stall. Then comes the decline.

Really? Cannot home prices go up like this forever? What did Mark Twain say? Buy land. There?s not making any more of it.

Twain has a point. Out here in La-La Land there?s not just a shortage of affordable housing ? only about seventeen percent of working families in Southern California can afford anything for sale in these parts ? there?s a shortage of housing, period. Prices rise and rise, on and on, with no end in sight.

So, will the housing bubble ever really burst and send the economy into the weeds? Who knows? It doesn?t seem you?ll hear any bubble popping out here.

But that doesn?t help some people. For someone like me, who rents, by choice, and is retired, things just get more and more expensive ? with no access to the one remedy that is saving everyone else in the economy. Oh well. One becomes careful.

Of course, the New York Times delivered, a day late, the same story as my local newspaper, to my friend doing securities law in Lower Manhattan, but with more depth. No colorful anecdotes about this gainfully employed Joe Public or that gainfully employed Joe Public eating cat food or dropping health and car insurance to get by. This was in the business section.

Falling Fortunes of Wage Earners
Steven Greenhouse, Published: April 12, 2005

The same sort of opening -

Beginning in the mid-1990's, pay increases for most workers slowly but steadily outpaced the rate of inflation, improving the living standards for nearly all Americans.
But an unexpected reversal last year in those gains has set off a vigorous debate among economists over whether the decline is just a temporary dip or portends a deeper shift that may cause the pay of average Americans to lag for years to come.

Even though the economy added 2.2 million jobs in 2004 and produced strong growth in corporate profits, wages for the average worker fell for the year, after adjusting for inflation - the first such drop in nearly a decade.

Ah! The economists argue.

First, they say problem is not with the jobs themselves ? the problem is not very few and very crappy jobs out there - but perhaps with the now global economy, and with too many workers? benefits -

? Most economists dismiss as overblown the widespread fear that the number of jobs will shrink in the United States because of foreign competition from China, India and other developing nations. But at the same time many of these economists argue that the increasing exposure of the American economy to globalization, along with other forces - including soaring health insurance costs that leave less money for raises - is putting pressure on wages that could leave millions of workers worse off.

Worse off, but as above, keeping inflation in check.

But Greenhouse says there are optimists -

?But some economists are more optimistic, saying that the wage sluggishness is temporary and that real wages have slipped only because a sudden spike in oil prices has briefly left workers behind the curve. These economists assert that wage stagnation will end soon, as normal growth brings a tighter labor market.

Maybe. Let?s blame those middle-easterners with their OPEC nonsense. Everything will get better. No problem.

Some of us aren?t buying that. And we see this too -

? The overall wage figures hide a split, with an elite group getting relatively large gains. In a study of census data, the Economic Policy Institute, a liberal research group, found that for the bottom 95 percent of workers, after-inflation wages were flat or down in 2004, but for the top 5 percent, wages rose by an average of 1 percent, with some gaining much more.

The upper-income group enjoyed strong pay increases largely because of bonuses, stock options and other inducements and because of robust demand in certain fields, like law and investment banking.

Well, my host for the weekend is doing well. He?s an attorney. His wife is an attorney. For those of us in other fields?

Those of us in systems management know the next shift in priorities, or the next merger, or the new off-shore deal, or a change in technologies, means moving on to the next firm, always at a slight net loss. One gets used to it. Ah, there?s always work out there. It is just a bit irritating. Of course that?s the very top of the ?bottom 95 percent of workers? mentioned by Greenhouse. For the bottom 95 percent of workers perhaps it is well beyond irritating. If those folks got beyond being depressed by their slow and steady decline and got, say, angry, there might be a problem.

No, they all voted for Bush because they like is kick-ass style. No revolution this century. It?s a values thing. As long as Lars and Spanky don?t get married and move in down the street, well, that?s just the way it is.

Greenhouse does add more analysis, of course -

J. Bradford DeLong, an economist at the University of California, Berkeley, said that current wage patterns, while perhaps only temporary, did not conform to traditional economic explanations.

? Richard B. Freeman, a Harvard economist, predicted that new competition in the form of millions of skilled Chinese, Indian and other Asian workers entering the global labor market will increasingly pull down American wages.

"Globalization is going to make it harder for American workers to have the wage increases and the benefits that we might have expected," he said.

Facing intense foreign competition, Delphi, the auto parts manufacturer, has decided against any merit raises this year for its salaried workers. And at its air bag and door panel factory in Vandalia, Ohio, it persuaded unionized workers to accept a three-year pay freeze, warning that the plant would be closed otherwise.

Yep, that?s the way it is.

Matthew Yglesias is puzzled by it all and adds this (my emphases) -

Why Low Wages? I'm a little puzzled by Steven Greenhouse's inquiry into the falling wages problem. The bulk of the hypotheses and so forth mooted about seem to suggest that wages are being held down by something or other, with possibilities such as foreign competition, Wal-Mart's low wages, the possibility of substituting technology for labor, etc. being canvassed. That seems to suggest that, in the past, wages went up when productivity went up because bosses were nice and realized that with productivity on the rise they could afford to raise wages. Now thanks to foreign competition, Wal-Mart, and other low wage sources they "can't afford" pay raises. But that's not how the economy works, now or ever. If productivity is growing much faster than wages, then it should be easy to make a lot of money by hiring new workers.

As people do that, wages should start to go up, until it no longer becomes profitable to add new workers, at which point wages will start leveling off. Wages and productivity can't become de-linked because today's businessmen are greedy or because Wal-Mart is cunning, the link between wages and productivity depends on the fact that businessmen are greedy and cunning. You don't raise wages out of altruism, instead you expand your workforce out of greed, and the expanding workforce pushes wages up. So what's going on nowadays? None of the stuff discussed in the article seems relevant to the issue at hand. Professor DeLong is quoted in the article but doesn't have any further comments. I'd be interested to know.

So would we all.

So DeLong replies (again, my emphases) -

Well, there are three hypotheses:

1.) Improvements in firms' ability to squash unions, and thus shift wage bargains toward employers (the Wal-Mart hypothesis).

2.) A slack labor market--much more labor-market slack than the level of the unemployment rate would lead one to expect--in which firms find it easy to hire workers and workers find it hazardous to ask for higher wages.

3.) Changes in the international economy that boost the wages of the skilled and educated (whose products can be sold abroad for more) and put downward pressure on the wages of the less-skilled and less-educated (who now face much stronger competition from abroad).

I believe that (3) is likely to be a very important factor over the next two generations. But this wage-growth slowdown we have seen since 2000 has hit too rapidly and has been too large to be credibly attributed to "offshoring" or other long-run international factors. (1) is surely a factor, but (1) wouldn't work unless (2) were exerting a powerful downward force on wages. (2) has many causes--a relatively high value of the dollar that switches demand from home to abroad is one of them.

I expect things to turn around as employment expands and as (2) loses its force--unless the Federal Reserve decides that it needs to fight inflation now.

Why hasn't (2) lost its force already? Why, with rapid productivity growth and stagnant wages and cheap money that is easy for firms to borrow, isn't firm demand for workers already through the roof? Well, how much would you like to expand capacity if you knew the country had a large budget deficit, and that either big tax increases or a burst of inflation were likely in the future? When Paul Volcker and Bob Rubin say that a serious financial crisis may well be on the horizon? Wages and productivity can't become de-linked because today's businessmen are greedy or because Wal-Mart is cunning, the link between wages and productivity depends on the fact that businessmen are greedy and cunning. You don't raise wages out of altruism, instead you expand your workforce out of greed, and the expanding workforce pushes wages up.

Wait a second here. I know Professor DeLong used to work in the Clinton administration but is he saying the Bush thing of turning a multi-trillion dollar surplus into a multi-trillion dollar deficits through an expensive war and tax breaks for the ultra-rich was a BAD idea?

Yes. Just how are these guys managing the economy?

Well, they have their priorities.

Ah, and that brings us to Paris Hilton.

"Trust fund babies rejoice!"

In the Washington Post we see this is speeding through the House of Representatives ? which one fellow calls legislation designed to keep the Paris Hiltons of the world from ever doing a day of honest work. The house is to permanently repeal the estate tax.

This is class warfare? Perhaps.

Last month, [Michael] Graetz and Yale political scientist Ian Shapiro published "Death By A Thousand Cuts," chronicling the estate tax repeal movement as "a mystery about politics and persuasion."

?For almost a century, the estate tax affected only the richest 1 or 2 percent of citizens, encouraged charity, and placed no burden on the vast majority of Americans," they wrote. "A law that constituted the blandest kind of common sense for most of the twentieth century was transformed, in the space of little more than a decade, into the supposed enemy of hardworking citizens all over this country."

The secret of the repeal movement's success has been its appeal to principle over economics. While repeal opponents bellowed that only the richest of the rich would ever pay the estate tax, proponents appealed to Americans' sense of fairness, that individuals have the natural right to pass on their wealth to their children.

The most recent Internal Revenue Service data back opponents' claims. In 2001, out of 2,363,100 total adult deaths, only 49,911 -- 2.1 percent -- had estates large enough to be hit by the estate tax. That was down from 2.3 percent in 1999. The value of the taxed estates in 2001 averaged nearly $2.7 million.

Hey, that?s a neat trick. Most of us are going to get screwed economically, Social Security must go away, the Veterans get their health benefits cuts, the troops don?t get all their armor ? but Paris Hilton get another Porsche?

Well, that?s fair. Not.

And at the Post E.J. Dionne notes this -

In a little-noticed estimate confirmed by his office yesterday, Stephen Goss, the highly respected Social Security actuary, has studied how much of the Social Security financing gap could be filled by a reformed estate tax. What would happen if, instead of repealing the tax, Congress left it in place at a 45 percent rate, and only on fortunes that exceeded $3.5 million -- which would be $7 million for couples? That, by the way, is well below where the estate tax stood when President Bush took office and would eliminate more than 99 percent of estates from the tax. It reflects the substantial reduction that would take effect in 2009 under Bush's tax plan.

According to Goss, a tax at that level would cover one-quarter of the 75-year Social Security shortfall. The Congressional Budget Office has a more modest estimate of the shortfall. Applying Goss's numbers means that if CBO is right, the reformed estate tax would cover one-half of the Social Security shortfall.

This is big news for the Social Security debate. Michael J. Graetz and Ian Shapiro, authors of a new book on the estate tax, "Death by a Thousand Cuts," have referred to its repeal as the "Paris Hilton Benefit Act." To pick up on the metaphor, why should Congress be more concerned about protecting Paris Hilton's inheritance than grandma's Social Security check? How can a member of Congress even think about raising payroll taxes while throwing away so much other revenue?

How? Assume folks know who their betters are and like good serfs they sacrifice for their lords? No, not that exactly.

It?s more like a principle ? everyone knows you keep and don?t share. It?s related to the conservative mantras about rugged individualism, personal responsibility, and taking care of yourself and not relying on big government. No community. That?s not the American way.

That?s what we all understand is the way things are now. That?s the real Republican revolution.

Posted by Alan at 16:54 PDT | Post Comment | Permalink
Updated: Wednesday, 13 April 2005 16:56 PDT home

Friday, 17 September 2004

Topic: The Economy

Insecurity: It seems to be 1660 again...

The basic goal? End the idea the government should do anything for the public good. Only the private good matters - folks should be free to accumulate wealth and businesses free to do what they want, and individuals who are hurt in process should turn somewhere else if they find themselves in trouble. The government owes them nothing. There's too much of this "mommy" government.

Grover Norquist is clear -

"My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."

Clear enough.

That blunt statement is not new. You will find that comment and more here, in The Nation, April 26, 2001

Norquist is president of Americans for Tax Reform (ATR), a coalition of taxpayer groups, individuals and businesses opposed to higher taxes at both the federal, state and local levels. And he serves on the board of the National Rifle Association of America, and the board of the American Conservative Union. He was key member of 1988, 1992, 1996 Republican Platform Committees. He is a chief theorist for the Republican Party. He has the ear of the key players, and a BA and MBA from Harvard, where George Bush earned, so to speak, his own MBA.

Bush at Harvard Business School? Imagine that. Or note what Yoshi Tsurumi, now a Professor of International Business at Baruch College, the City University of New York, says here -

At Harvard Business School, thirty years ago, George Bush was a student of mine. I still vividly remember him. In my class, he declared that "people are poor because they are lazy." He was opposed to labor unions, social security, environmental protection, Medicare, and public schools. To him, the antitrust watch dog, the Federal Trade Commission, and the Securities Exchange Commission were unnecessary hindrances to "free market competition." To him, Franklin Roosevelt's New Deal was "socialism." ...

There's much more but you get the general idea. (See the footnote.)

Paul Krugman, the Princeton economist who writes opinion pieces for the New York Times, in his collection of recent columns, "The Great Unraveling: Losing Our Way in the New Century" (Norton, 426 pp., $25.95) has as his thesis that we are now governed by a reactionary party with a radical (he says "revolutionary") agenda, basically that of undoing the legacy, domestic and foreign, of FDR. Bush and his teams even say this - Norquist rather bluntly - even say this, but people, especially the pundits who endless analyze policy, discount it, because they don't realize that, like any "revolutionary power," the folks in power now really do mean it. They aren't kidding.

You might find this amusing - Krugman defending his views on the Fox News "Hannity and Colmes" show on October 17, 2003. He gets beat up.

Anyway, it does seem the current group in power want to change how we think of government. You're on your own now. Grow up.

Josh Marshall in The Washington Monthly points out this has been going on for a long time -

Newt Gingrich and the House Republicans who came to power in 1995 held a very different, neo-Reaganite view. Deriding the whole notion of a federal response for every crisis, they argued that society's problems could be solved only through a radical reordering, both of government in Washington and of America's relationship with the world. This required tax cuts to drain money out of the Beltway; radically scaling back regulation on business; pulling America out of many international agreements; and cutting funding to the United Nations. The Gingrichites were not pragmatists but visionaries and revolutionaries. They wanted to overthrow the existing structure of American governance, not tinker with it.

The whole thing is detailed, and instructive.

But this week the issue is Social Security, specifically, and we find Teresa Nielsen Hayden saying this -

I've been ruminating about a one-liner that's been floating around the meme pool since lord knows when. You've probably heard it a thousand times:

By the time you retire, there'll be nothing left in the Social Security retirement fund.

It's untrue, of course; but for those who aren't aware that it's untrue, it's profoundly frightening.

We're set up to be a cooperative society. We believe that by working together, we can as a people be richer, safer, smarter, and happier. However, this cooperation requires a certain basic level of trust. The belief that you could be left penniless in your old age, after a lifetime of contributing your regular fraction to the public good, creates a huge breach in your sense of trust.

It's not the kind of idea that turns you into a monster overnight. I'm inclined to believe that the commonest reaction to it is dull, low-level grief: you thought life in America would be better than this. Still, if that's what you have to look forward to, you'd better get while the getting's good. You're going to need that money.

Meanwhile, you find yourself resenting calls on your generosity. True, you're probably a lot better off than the people you're being asked to help; but you're not comparing them to your present self. Lodged in your heart there's an elderly, needy, cast-off version of you, whispering that when the time comes, nobody's going to pay to help you. Children stop looking like our hope for tomorrow. Instead, they're the heartless little bastards who're going to let you live on dogfood in your SRO until a heat wave finally does you in.

The other thing about believing there'll be nothing left when you retire is that it makes you far less likely to scream in outrage over the long-term looting of the national treasury. After all, you already know you're not going to get any of that.

It's not inevitable. I think we need to say so, early and often.

Well, Brad DeLong, the noted government economist now on the faculty at UC Berkeley, explains here in precise terms just why it is not true that after paying into social security for a lifetime we all will now get back nothing at all. It doesn't work that way.

But that is beside the point.

Hayden has latched onto something else that is the inevitable byproduct of the political theory, and policy practices, of those in power - and of the uninformed sneers of the current president about those who are not as rich is he is.

And it is far larger than social security. As before, we are carrying an enormous federal deficit that will impoverish us for decades, or end most government social programs. Forty-four million of our people are without any health coverage, and millions more out of work. And the Social Darwinists have been given the power to do what they think best.

The result is Hayden's idea that this slowly turns us into monsters, all of us. The idea that we're set up to be a cooperative society is tossed away - as useless trash. Believing that by working together we can as a people be richer, safer, smarter, and happier is derided as stupid - as "personal responsibility" is posited as the only value.

And trust is for fools.

And life is poor, nasty, brutish and short - just as Hobbes said it was back in 1660.

This is progress?

Assume we are neither a purely communist society, where the individual doesn't matter but only the good of the collective matters, nor a purely Darwinian survival-of-the-strongest-and-most-vicious society, where you look out only for yourself and anyone else be damned.

What happened to the middle ground, where "personal responsibility" is fine and dandy but when some of us stumble we make sure they are okay - out of common decency if nothing else?

We are no longer all in this together? I guess not.

__

Footnote:

Mary Jacoby of Salon.com interviews Yoshi Tsurumi

See The dunce
His former Harvard Business School professor recalls George W. Bush not just as a terrible student but as spoiled, loutish and a pathological liar.
September 16, 2004

Key paragraphs -

The future president was one of 85 first-year MBA students in Tsurumi's macroeconomic policies and international business class in the fall of 1973 and spring of 1974. Tsurumi was a visiting associate professor at Harvard Business School from January 1972 to August 1976; today, he is a professor of international business at Baruch College in New York.

... "He [Bush] showed pathological lying habits and was in denial when challenged on his prejudices and biases. He would even deny saying something he just said 30 seconds ago. He was famous for that. Students jumped on him; I challenged him." When asked to explain a particular comment, said Tsurumi, Bush would respond, "Oh, I never said that." A White House spokeswoman did not return a phone call seeking comment.

In 1973, as the oil and energy crisis raged, Tsurumi led a discussion on whether government should assist retirees and other people on fixed incomes with heating costs. Bush, he recalled, "made this ridiculous statement and when I asked him to explain, he said, 'The government doesn't have to help poor people -- because they are lazy.' I said, 'Well, could you explain that assumption?' Not only could he not explain it, he started backtracking on it, saying, 'No, I didn't say that.'"

... Students who challenged and embarrassed Bush in class would then become the subject of a whispering campaign by him, Tsurumi said. "In class, he couldn't challenge them. But after class, he sometimes came up to me in the hallway and started bad-mouthing those students who had challenged him. He would complain that someone was drinking too much. It was innuendo and lies. So that's how I knew, behind his smile and his smirk, that he was a very insecure, cunning and vengeful guy."

Many of Tsurumi's students came from well-connected or wealthy families, but good manners prevented them from boasting about it, the professor said. But Bush seemed unabashed about the connections that had brought him to Harvard. "The other children of the rich and famous were at least well bred to the point of realizing universal values and standards of behavior," Tsurumi said. But Bush sometimes came late to class and often sat in the back row of the theater-like classroom, wearing a bomber jacket from the Texas Air National Guard and spitting chewing tobacco into a cup.

... Tsurumi's conclusion: Bush is not as dumb as his detractors allege. "He was just badly brought up, with no discipline, and no compassion," he said.

... He said other professors and students at the business school from that time share his recollections but are afraid to come forward, fearing ostracism or retribution. And why is Tsurumi speaking up now? Because with the ongoing bloodshed in Iraq and Osama bin Laden still on the loose -- not to mention a federal deficit ballooning out of control -- the stakes are too high to remain silent. "Obviously, I don't think he is the best person" to be running the country, he said. "I wanted to explain why."

Yoshi should make sure his life insurance premiums are paid up, in full. He's living dangerously.

Posted by Alan at 15:54 PDT | Post Comment | Permalink
Updated: Friday, 17 September 2004 19:05 PDT home

Wednesday, 4 August 2004

Topic: The Economy

High Finance - You can't touch me! Ha!

Most everyone who follows such things saw this latest item about Halliburton, and the Times makes it all rather clear. Dick is clean.

Halliburton Settles S.E.C. Accusations
Floyd Norris, The New York Times, August 4, 2004

The bare bones?

The Halliburton Company secretly changed its accounting practices when Vice President Dick Cheney was its chief executive, the Securities and Exchange Commission said yesterday as it fined the company $7.5 million and brought actions against two former financial officials.

The commission said the accounting change enabled Halliburton, one of the nation's largest energy services companies, to report annual earnings in 1998 that were 46 percent higher than they would have been had the change not been made. It also allowed the company to report a substantially higher profit in 1999, the commission said.

Whoa, they lied about their earnings and mislead investors while Dick Cheney ran the place? They defrauded the market? Really?

Man, the Chief Financial Office and the Controller took a hit here. They did that. Big fine. It really is so hard to get good help these days.

But Cheney?

The commission did not say that Mr. Cheney acted improperly...

... A lawyer for Mr. Cheney, Terrence O'Donnell, said the vice president's "conduct as C.E.O. of Halliburton was proper in all respects,'' adding that the S.E.C. "investigated this matter very, very thoroughly and did not find any responsibility for nondisclosure at the board level or the C.E.O. level.''

Mr. O'Donnell, a partner at Williams & Connolly in Washington, declined to answer a question as to whether Mr. Cheney had been aware of the effect of the accounting change on the company's profits.

Did Cheney know what was up? No comment. He lawyer won't say, and Dick isn't saying dick.

What's this all about?

... The accounting change dealt with the way Halliburton booked cost overruns on projects. At the time, it was having large cost overruns on projects in the Middle East operated by its Brown & Root Energy Services business, which under its old accounting policy would have reduced its reported profit.

The actual change in accounting, the commission said, was permissible under generally accepted accounting principles, but the failure to inform investors that the change had been made - and of its effect on the company's reported profit - violated securities laws.

"At bottom, what this case is about is insuring that investors understand the numbers," said Stephen M. Cutler, the S.E.C.'s enforcement director. "If you change methodologies and don't explain that, then investors are not going to understand what they are seeing."

So? Caveat Emptor as they say.

What investors didn't know?

... Until the second quarter of 1998, Halliburton had dealt with cost overruns on projects by taking a loss for the amount of the overrun unless and until the company that it was working for agreed to pay part or all of the overrun. But confronted with a large overrun on a fixed-fee project to build a gas production plant in the Middle East - the commission did not say in which country - Halliburton changed its policy so that it would record the income it thought the customer would eventually agree to pay.

That change in policy was not disclosed until March 2000, when the company filed its 1999 annual report with the S.E.C. The commission said that pretax profit for all of 1998 was reported at $278.8 million, 46 percent more than the $190.9 million that would have been reported under the old accounting.

So you might have purchased shares of a chimera, a house of cards. What? You were tricked? You should have know better.

Don't you know Dick?

The Times mentions that at the time the accounting was changed, Halliburton was preparing to merge with Dresser Industries and was dealing with a decline in the company's share price partly caused by slumping oil prices. Hard times. And you don't want to discourage people, or discourage investors.

Yes, the Bush family once owned Dresser Industries. A minor bit of trivia the Times is too formal to mention here. They do quote Cheney at the time saying to investors - "Halliburton continues to make good financial progress despite uncertainties over future oil demand."

Of course. Of course.

And would Dick lie to you? He and his lawyer refuse to say what he knew and when he knew it - and the SEC shrugs. They couldn't find clear and irrefutable evidence to say he had any idea.

Oh well.

Kevin Drum over at The Washington Monthly seems, well, a bit unconvinced. He comments -

... All I can say about this is that it must be mind-numbingly frustrating to be an SEC investigator. Dick Cheney -- like most CEOs in cases like this -- is off the hook because there's no smoking gun. But anybody who's spent even a few minutes in the executive suite of a large corporation knows that of course Cheney knew about this. Not only did he know, but this over-budget project was almost certainly a subject of considerable interest to him, the cost overruns were probably a subject of numerous status reports, and its effect on Halliburton's earnings was surely a frequent source of conversation. There is nothing that a CEO pays more attention to than his company's quarterly and yearly earnings reports. Nothing.

So Cheney knew. But as long as his former CFO and controller are willing to fall on their swords for him, there will never be any proof. And we will all go on pretending that when FY98 earnings turned out to be 46% higher than expected, Dick Cheney just scratched his chin, said "I'll be damned, things turned out OK after all," and then went out and played a round of golf. When he got back, nobody on his financial team, nobody in sales, nobody on the board, none of the analysts who follow Halliburton, and nobody in operations ever mentioned the subject of surprisingly high corporate earnings in his presence again.

And they all lived happily ever after.

Is Kevin just jealous that he can't pull off something like this - that he is just an outsider with his own sour grapes watching the big boys play, and win.

There are winners and losers in this world. Deal with it.

Andy Borowitz here mocks the whole business -

CHENEY URGES AMERICANS TO SEND HIM THEIR MONEY FOR SAFEKEEPING
Will Protect Assets Until Threat Has Passed

In the face of terror threats to America's financial institutions, Vice President Dick Cheney today urged all Americans to send him their money for safekeeping until the danger has passed.

In a nationally televised address, Mr. Cheney said that in the current climate the only safe place for Americans to put their money "is with me."

Using a chart and pointer reminiscent of real estate infomercials, Mr. Cheney gave a series of easy-to-follow instructions showing the American people how to transfer all of their worldly assets to him via check, wire transfer, or big bags of money.

"Your money will he invested personally by me in high-yield, no-bid Iraqi reconstruction contracts," Mr. Cheney said. ...

Oh hell, why not?

Actually this Halliburton case here - along with the cost overruns in Iraq now - and along with Halliburton losing one third of the physical equipment we supplied them to work in Iraq (trucks, computers and whatnot all gone) - along with the nearly two billion they cannot track down at the moment ... Well, it seems like this is all an political ploy, a way to gain votes.

How? Envy, of course.

Imagine the powerless white guys being pushed around by everyone and everything in the world every single damned day. They see stuff like this and think, "What sly bastards, and so clever putting it to the losers. In your face, world!" They smile. Dick and George are pretty cool.

As Jesse James is reported to have said, "Everyone loves an outlaw."

Posted by Alan at 16:18 PDT | Post Comment | Permalink
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