Sunday, May 20, 2018

Wage Growth


Some economists are pretending to be amazed by the extent to which wage growth is lagging behind economic growth.  With the unemployment rate under 4% —full employment, by all historical standards — employers are supposed to be competing for workers by offering higher wages. They're not doing that, for two main reasons: they don't want to, and they don't have to.

The "free market" model never had much relevance to the real world, and today it is less predictive than ever.  This is especially true of labor markets, distorted by decades of neoliberal policy under Republicans and Democrats alike.  Corporate combination goes virtually unchecked, and when a few major players dominate an industry, they don't have to compete, even with no active collusion.  If any single company offers higher wages, the others have to follow; so nobody begins a process that would result in higher labor costs for all.  They may compete for a small number of high-value, highly specialized employees, but the bulk of their labor force is completely fungible.

Even outside the oligopolies, though, workers have become largely interchangeable in most job areas, especially in lower-wage occupations.  Much is made of technology's potential to replace jobs, but its greater impact may be in how it makes jobs easier, reducing the skills needed to do them.  At the same time, higher educational attainment is expected of today's workers, so jobs once done perfectly well by high school graduates now employ people with bachelor's degrees.  A tight labor market is not really a problem when almost anybody can do the job and somebody is willing to take it.

A substantial slice of corporate profits in recent decades came from suppressing labor costs: part-time jobs with "flexible" hours, "gig economy" contract workers, and legal restrictions on labor unions all facilitate the ongoing transfer of wealth from the many to the few.  Any economist claiming wages soon will "catch up" with corporate profits is either a liar or a fool.

Saturday, May 12, 2018

Bully Diplomacy


I hate bullies; but even more, I despise those who succumb to bullying.  Now that bullying is America's official, default foreign policy, I only can hope that its intended victims have the courage to resist.

Iran, of course, has no choice but to resist: it is not about to "negotiate" regime change, and nothing less than that will satisfy the Tr*mp gang (which includes Bibi and MbS.)  The courage will have to come from Europe, and how much courage European leaders can muster remains to be seen.

Despite the easing of sanctions under Obama, US investment in Iran was minimal following the nuclear agreement: US companies continued to be limited by other sanctions protocols, and benefits to the Iranian economy fell far short of what Rouhani and his moderates hoped to see.  Europeans were less restrained, so the impact of US withdrawal from the deal depends on European willingness to go along.  It still remains to be seen what secondary sanctions the Tr*mpistas decide to impost on European companies that remain in Iran.

While secondary sanctions against US "allies" would be economically damaging, Macron and Merkel might be willing to endure them for the political advantage that might entail.  Anti-Americanism is a tried and true means of garnering nationalist support, so a "principled" stand against the Tr*mpians well might draw away supporters of the National Front in France and the AfD in Germany.  Suing the US at the WTO would be a good start, but withdrawing their ambassadors to the US in protest would be a sure bet for solidifying voters behind them.

If any diplomatic intelligence remains in the Tr*mp administration, secondary sanctions against the Europeans will be minimal, and the denuclearization of Iran can continue.  If the yahoos prevail, though, we only can hope Europe finds the courage to resist.

Saturday, May 5, 2018

Rudy


Contrary to the claims of numerous ageist commentators, Rudy Giuliani is not senile — he's always been incompetent.  His reputed "success" as mayor of New York City was grounded in unconstrained, racist policing.  His "response" to the attack on the World Trade Center consisted of showing up at Ground Zero, mouthing platitudes, and working to divert attention from the fact that he'd insisted that the city's emergency response force be headquartered there, despite an earlier terrorist attack.  Marion Barry, even high on smack, could have done just as well.

It's reported that Giuliani cooked up the current confusion in collusion with his pal, Tr*mp.  Even so, Our President couldn't resist taking a swipe at his loyal ally and brand-new legal mouthpiece while aggravating the ongoing gobsmackedness of the press.  (By the way, Tr*mp too is not senile — even though Dr. Ronny Jackson said he's not.)

Confusion, obfuscation, and chaos have served Our President well over the course of his career, both in business and in government; and the current brouhaha may serve the purpose of making evidence collected in the raids on Michael Cohen's offices appear to be "just another version" of events.  While the truth may be "out there," the "truthiness" is where modern political battle lines are drawn.

Friday, April 27, 2018

The Waffle House Conspiracy


Travis Reinking, the 29-year-old, Tr*mp inspired "sovereign citizen" who invaded a Waffle House restaurant in a black suburb of Nashville on April 22  sought an interview with the President last July.  Although denied a meeting, his name did come to the attention of White House officials.  Anonymous sources report that he was of particular interest to Stephen Miller, the 33-year-old speechwriter and Tr*mp-whisperer who has maintained a suspiciously low profile in recent months.  Those sources say that a Miller aide contacted Reinking the following week, and helped him plan the attack.  "Don't wear pants," the aide suggested, "and they won't look at your face.  Nobody will know it was you."

Miller apparently believed that a racist massacre would help to distract media attention from the seizure of incriminating documents from Tr*mp attorney Michael Cohen, as well as other White House problems connected to the Mueller investigation.  "They'd have preferred more prominent victims, like in the Dylann Roof attack," said one insider, "but the guy was crazy, so they had to take what they could get."

All of the above is a total fabrication, of course, but no more incredible than the story about Hillary Clinton running a child sex ring out of a pizza parlor.  You'd expect that somebody might believe it, though — right?  Well, no.  Conspiracy theories aimed at liberals are far less effective than conspiracy theories aimed at conservatives.  "That's because conservatives are stupid," you reply.  Sorry, wrong again.  There are plenty of stupid liberals.  The difference is attributable to the different personality characteristics of liberals and conservatives.

Research shows that conservatives have a far greater need for cognitive closure: they find it much harder to tolerate ambiguity, and so are more willing to accept new "information" that confirms their preexisting beliefs.  Conservatives also are measurably more fearful than liberals, hence more responsive to stories they see as threatening.  Fear overrides logical inconsistencies, and demands an immediate, aggressive response.  Fear feeds authoritarianism.

Nonpartisan internet entrepreneurs who monetized fake news during the 2016 election quickly abandoned attempts to make money on liberal-themed sites, but the conservative clickbait was highly profitable.  There is little reason to believe that Facebook and Google will correct their algorithms in time for the 2018 midterms, so we can expect the lies to flow on unabated.


Monday, April 16, 2018

Exit Ryan


The response to one-time wunderkind Paul Ryan's "retirement" announcement has been surprisingly underwhelming.   Credit for the massive corporate tax cut largely has accrued to the Orange Imbecile, despite years of efforts by Ryan to enrich the most affluent at the expense of everybody else.  He has been praised in some quarters for having the "courage" to publicly endorse screwing the poor by annihilating food stamps, Medicare, and Social Security, but Obamacare limps on despite his best efforts.

Ryan made his decision to leave for all the obvious reasons.  His position as Speaker was imperiled by the widely anticipated "blue wave," and there was no guarantee that even his seat in the House was safe.  It was a lot easier being Speaker under Obama, when all he had to do was lead a chorus of Republicans chanting "no."  Most important, though, he must despise having to defer to the whims of a buffoon like Tr*mp.

Quite possibly, he does want to spend more time with his teenage children, who are just the right age to start reading Ayn Rand novels.  He'll also have opportunities to start making some serious money on the lecture circuit and as the leader of some Koch-funded superPAC.  I don't expect him to become a lobbyist, but doors certainly will be open.

What Ryan seems to enjoy most of all is playing the role of "smartest person in the room," so we can expect to see his teddy bear ears flapping regularly on cable news.  In the meanwhile, he remains Speaker; and it will be interesting to see if his lame-duck status frees him up to be just a little bit more critical of the Administration.  Personally, I don't believe his "courage" is up to the task.

Sunday, April 8, 2018

A Wrinkle in Trade?


While the news media and the markets are captivated by Our President's current game of chicken with China, the US has advanced a very unorthodox idea at the NAFTA renegotiationand it's a surprisingly good idea.

To avoid US tariffs on automobiles produced in Mexico, manufacturers there would be obliged to pay their assembly line workers $15 an hour.  That is twice the US federal minimum wage, and considerably more than starting salaries at non-union assembly lines in the southern United States. The $15 figure is just an opening gambit, of course: nobody really wants to see underpaid Alabamians sneaking across the border for better-paying jobs in Mexico.  Nevertheless, demanding better pay for foreign workers could be a more intelligent approach to both balance-of-trade and unauthorized immigration concerns.

Labor standards have been a part of trade negotiations for many decades, but usually receive short shrift when agreements are finalized, and seldom are enforced.  Negotiated by and for multinational corporations, they rarely go beyond banning slave or convict labor — not an especially high bar.  (The TPP would have included somewhat higher standards, had it been ratified, but that ship has sailed.)

Globalization has lifted tens of millions out of abject poverty in the developing world — at least in countries like China, where not all the newly generated wealth was co-opted by plutocrats.  If the Tr*mp administration advances a new paradigm that benefits the working poor around the world, it will be ironic — but also very welcome.

Friday, March 30, 2018

Paranoids with Real Enemies



Immigrants
Nobody believes the Tr*mp administration wants the citizenship checkbox on the 2020 census form so that Jeff Sessions or any Republican successor will be better able to enforce the Voting Rights Act — but they had to say something.  Democrats say immigrant families, including legal residents who may have undocumented relatives, will be undercounted because of "fear" that they may be targeted by ICE.  That "fear" usually is portrayed as unjustified because it is illegal for the Census Bureau to share personal data; but the bureau did give the FBI and the military the census data they needed to accomplish the Japanese internment.  Does Tr*mp respect the law any more than Roosevelt did?

Facebook users
The "experts" who commented on Cambridge Analytics' use of Facebook data on behalf of the Tr*mp campaign seemed to concur that the company's campaign could not have been effective.  In other words, they were saying that Facebook's business model is ineffective.  Targeting people based on measures of racism, xenophobia, misogyny, and authoritarianism may not have changed any votes, but if the goal was to motivate and mobilize the "basket of deplorables," Republicans probably got their money's worth.  What does Facebook know about you?

Veterans
Our President described Dr. Ronny Jackson as "straight out of central casting," and looking good behind a lectern will be the next VA Secretary's primary role.  His lack of bureaucratic and political experience will free up Republican political appointees to privatize veterans' health care: the Koch brothers, after all, see the VA health system as a shameful example of socialized medicine.  Of course, socialized medicine is exactly what the VA provides; and, even underfunded, it delivers better and more efficient care than for-profit models.