Collapse - 7/1-15/2002
DoomwatchTM vs. Timesizing®
Collapse trends - July 1-15, 2002 (+ 6/30)
[Commentary] ©2002 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
7/12/2002 headlines from hell -
7/11/2002 headlines from hell -
- New pessimism on '02 revival is pervading Silicon Valley, by John Markoff, NYT, C1.
SAN FRANCISCO...- Hopes that the second half of 2002 would see the end of technology's business decline seem to be retreating. ...Recent days have seen a new caution among some executives and analysts....
- Not much talk about jobs in career chat rooms, by Siobhan McAndrew, Arizona Republic, D2.
....Monster.com is one of the largest career Web sites, where job seekers can look through more than 800,000 postings and companies can find thousands of resumes. The site offers career tips and features 5-6 chat rooms where career-minded adults can network..\.. Given all the advertising for the job-recruitment site..\..I was surprised that only 15 people were logged onto the job networking chat on Monster.com.
I spent the week checking out several career chats at Monster, Yahoo, and America Online. I didn't encounter many adults - instead, most chatterers said they were teenagers doing little networking. Instead of learning about the pulse of the American worker, I learned about the 50-plus ways to make a smiley face, [for example,] #-) means partied all night....
- International, Republic news services, Arizona Republic, D2.
Chile's central bank reduced its benchmark lending rate more than expected to bolster slowing economic growth. The bank lowered its lending rate to 3¼% from 4%, its 5th rate reduction this year.
[Here's another economy following the Japanese toward zero interest rates. Too bad this type of economic adjustment is so superficial. They talk deeper "restructuring" and have no idea what it really might be. It might actually be adjusting the workweek downward so that that technology-curtailed human employment is spread widely and everyone can easily support themselves (so taxpayers don't have to), shop actively, and provide plenty of effective demand to purchase the productivity of the nation and maintain employment - this as an alternative to the current default funneling of technological profits into the top income brackets where consumers already have much more spending power than they can spend. We call our 5-phase, market-friendly version of workweek adjustment Timesizing, Phase One of which gets rate reduction settled and out of the way.]
7/10/2002 headlines from hell -
- Bear market deepens; indexes hit 5-year lows, by Alex Berenson, NYT via Arizona Republic, D1.
[or the staider headline the NYT put on the original article -]
2 key indexes skid to levels seen in 1997 - Scandals and insecurity produce a smog of fear, by Alex Berenson, NYT, C1.
The worst bear market in a generation deepened yesterday as stocks plunged for the second day.... Many of the same investors who two years ago viewed Wall Street as a risk-free way to make money now see it as a dangerous place that can destroy fortunes and wreck retirement plans....
The Dow Jones industrial average plunged 282.59 points yesterday, or more than 3%, closing at 8,813.50....
- Yesterday, the S&P 500-stock index, a crucial gauge of the market's performance, fell 32.36 points, or 3.4%, to its lowest level since November 1997....
- The Nasdaq composite index skidded 35.11 points, or 2.5%, to 1,346.01, its lowest level since May 1997..\..
Yet even after wrenching declines, most stocks are still not cheap by historical standards....
[Showing that the centripetal force on money has become sooo overwhelming, and the resulting concentration of spending power sooo tight, that the top brackets just don't have anywhere else to store it but an already over-taxed stock market. The economy is grotesquely top heavy, and the actual exchange and circulation of paper money or money on account, though huge by historical standards, is relatively too small to maintain the value of the dense 'black hole' of compacted spending power in the top brackets, a typical gateway to depression. Why the black hole? Employees have no leverage to get raises that match their technology-jumped productivity. Why not? 'Cause as technology was introduced, they were laid off instead of having their hours trimmed to spread the work and keep them all employed. So they're a surplus commodity, never a condition valued by market forces. They're common as dirt and cheap as dirt, and they don't have power or leverage. The need? Reverse the labor surplus. Withdraw the excess manhours on offer from the job market. How? We could use our intelligent way of doing this to the max for a change = trimming the workweek, instead of our stupid way = war.]
- [2 more hallmarks of depression -]
Wholesale inventories increase; import prices decline slightly, Reuters via NYT, C4.
[Excess inventory and deflation. All the "experts" jabber about productivity is crap unless they can sell it, and right now, they can't. Too much spending power concentrated in unspendable 'black holes' in the top brackets. Too little centrifuged around to the millions who have the time and need to spend it. Classic. Classic pre-depression. Will we learn the lesson this time so we don't have to keep repeating this nightmare of history? Gotta git us a mechanism to automatically convert the worksavings of technology into financially secure free time instead of anxious un- and under-employment. Gotta git us timesizing, not downsizing.]
- Natural wonders suffer, letter to editor by Andy Laurenzi of Tucson AZ, Arizona Republic, B10.
[Here's a plug for the big hole that we're sitting on the edge of, typing this -]
...If you can believe it, the Grand Canyon, one of the natural wonders of the world, is without a geologist on staff, compromising the ability of the Park Service to protect and interpret this amazing place..\..
Your recent editorial ("Border policy is brutalizing our deserts," 6/08), called attention to the tremendous strain that undocumented immigrants and related enforcement actions are imposing on Organ Pipe National Monument's staff, limited resources and fagile environment. ...The needs at Organ Pipe are echoed in parks across the country. While each national park has its own particular challenges, the one constant is insufficient funding for day-to-day operations, compromising the ability of the National Park Service to preserve these precious places. The $63m cleanup needs at Organ Pipe are just one example....
Now is the time for Sens. John Kyl and John McCain to...increase the 2003 operating budget of Organ Pipe and all of the national parks so that these special places are protected...and remain for our children to enjoy tomorrow just as we do today.
7/09/2002 headlines from hell -
- Slouching toward populism - Rebel without a clue: W. as James Dean, op ed by Maureen Dowd, NYT, A25.
...Can a Bush - born on third base but thinking he hit a triple - ever really understand the problems of the guys in the bleachers? Despite the efforts of W. and Karl Rove to use Poppy's one-term presidency as a reverse playbook, to instead aim for the populist two-term touch of Ronald Reagan, the junior Bush now finds himself combating the same accusations of elitism that cost his father re-election....
[His father, you recall, was the guy who didn't know what a supermarket scanner was. "Is the maid going to go shopping today, Mothah?"]
"Bush's idea of solving a domestic problem was to fire the maid and yell at the butler," chortled Democratic senator Tom Harkin of Iowa. The Democrats are going to town again on Bush obliviousness. America is repulsed by corporate gluttony and accounting racketeering. And the younger Bush must prove that his connectoin to the common man goes deeper than a peanut butter and jelly sandwich....
How can Mr. Bush crack the whip on Big Business when he's a wholly owned subsidiary of it? His dynastic ties to business gave him his career in oil and baseball, provided the record-breaking $100m that made him president, and spawned his CEO administration. How can Mr. Bush lecture companies on setting a moral tone, getting tough on accounting practices and ending "malfee-ance," as he calls it, when there are pesky questions about his own windfall at Harken Energy? (His $848,560 stock cash-in made Hillary, the Cattle Queen of commodities trading, look like a piker for only taking home $100,000.) ...The pResident...just wants the country to take it on faith that he and Dick Cheney, who got filthy rich at Halliburton, and Army Secretary Thomas White, who got filthy rich at Enron, are "good actors," as he puts it.
Poppy, at some level, always knew...that his Texas up-by-the-bootstraps storyline was a pose.... Junior, with his pseudo-James-Dean-in-"Giant" lectern slouch, believes he's the real thing.... He sees himself as self-made and anti-elitist. But given his slacker start, he ended up relying even more on family connections for business and political success than his father did.... He talks the populist talk, while he walks the elitist walk.
- Debt, fear of job loss affecting travel plans, by Hal Mattern, Arizona Republic, D3.
...bigger factors than the threat of terrorism in decisions by Americans to cut back on travel this summer, a survey by Opinion Research Corp. International has found. The survey of more than 1,000 adults nationwide, conducted for the non-profit credit counseling organization AmeriDebt, found that 28% of the respondents who plan to reduce vacation spending will do so because they are at or near credit card limits or too deeply in debt (17% are recently out of work or worried about a layoff).
By comparison, [only] 19% of the respondents cited terrorism concerns for their decision to stick closer to home and drive instead of fly to their vacation destinations....
- [Remember when 'Swiss made' was the mark of quality and excellence? Not any more ...]
Jets' crash again hurts Swiss image, by Alexander Higgins, Arizona Republic, A16.
GENEVA - The Swiss role in the jet crash that killed 45 Russian youngsters and 26 other people over southern Germany has dealt another blow to the country's pride in its much-vaunted precision and reliability. And the changing story of Swiss air-traffic controllers has only added to the damage....
[And the fiasco of what they did to Swissair had already pretty well zapped Switzerland's reputation anyway. Inspired by Peter Ustinov, we used to describe Toronto as "New York run by the Swiss." Guess we'll have to find another sobriquet. Compare -]
Air collision further damages Switzerland's image of precision, by Alexander Higgins, Arizona Daily Sun, A11.
[And another jurisdiction that doing itself in -]
Scandals begin to tarnish Wisconsin's political luster - A superclean image becomes a matter of nostalgia, by David Rosenbaum, NYT, A12.
7/07-08/2002 headlines from hell -
- Citing Israel's need for security, Bush accepts occupation, by David Sanger, NYT, A4.
[Since when has the occupation brought Israel security? And it gets worse. On same page -]
Plan to keep Israeli Arabs off some land is backed, by Joel Greenberg, NYT, A4.
[Your tax dollars are supporting a racist state. A bunch of people who should know what it's like to be homeless and landless, are now sticking it to others and fueling terrorism worldwide because - the homeless feel they have no other alternative. Not only is the Jewish state not "turning the other cheek" in this mess - and maybe they can be forgiven because after all, it was Christ who urged his followers to do so - but even the self-styled Christians leading the Big Brother/sugardaddy state behind the Jewish one aren't mentioning this radical Christian approach, let alone the closely related Gandhian strategy. So it goes on and on, getting worse and worse. The only ones laughin' are our weapons manufacturers and their PACs and lobbies.]
- Michigan: Financial watchdog for Flint, by Danny Hakim, NYT, A17.
[Bear in mind that Flint was the headquarters town of General Motors, which GM gutted with a 74,000-job layoff in the early 1990s, giving rise to Michael Moore's movie, "Roger and Me," wherein he pursued Roger Smith, CEO of GM, to ask him why he did it.]
The state appointed an emergency financial manager for Flint, the largest municipality ever to be taken over by the state. The city of 125,000 has been battered in the last two decades by high unemployment and the disappearance of auto industry jobs, but the problems have accelerated. Debt has grown to about $40m, and in March, the mayor was recalled....
[Just like in Sid Meyer's computer games - in Railroad Tycoon, if you borrow too much and let your stock price get so low that a rival railroad gains a majority share, you find yourself leaving town, gandydancing on a jigger - in Civilization, if too many people in your town are unhappy, the mayor leaves town in disgrace.]
For Flint, Mich., takeover adds to the list of woes, by Danny Hakim, 7/10/2002 NYT, A12.
- $12,000 a night, but negotiable - Hotels for super-rich, like the guests, do just fine in lean times, by Jayson Blair [=Times reporter who resigned leaves long trail of deception, 5/11/2003 NYT, A1], NYT, A20.
[Symptomatic of depression - luxury markets are the only things still groovin', because the long workweek-originating concentration of wealth means the few who are in the right place at the right time have way more than they can spend, but still they try - spending ludicrous amounts on basics like this $12000/night hotel room at Manhattan's Four Seasons, the New York Palace or the St. Regis, or the new classic Mercedes priced at several hundred K.]
...The most important factor contributing to their economic stability in a time of great problems...is the nature of their clientele: the very, very rich. "This is not meant to sound arrogant," said Michael Matthews, a VP at the St. Regis Hotel on East 55th Street at Fifth Avenue, "...Our clients are recession-proof."...
[Some people went through the entire 1930s with no idea that there was a depression - let alone that the obsolete economic design making their wealth possible was the cause of it.]
7/06/2002 headlines from hell -
- 7/7 Solitaire - One nation plays the great game alone - Today, the dramas on world stage are dominated by one actor: the U.S., by James Dao, NYT, 4:1.
["Power corrupts, and absolute power corrupts absolutely." How does it corrupt? By funnelling-in the money, and using it to funnel-in the decision-making, and then using both to insulate the rich decision-makers from any negative consequences of their decisions. Ergo, no feedback. Ergo, no long-term survivability. Compare Christ's "Blessed are the meek" - "meek" was defined by our Scots minister in Toronto as "humble and teachable" - exactly what Bush Inc. ain't.]
[What many of us suspected before is becoming obvious. The United States of America is becoming the world's biggest problem and danger, to others as well as itself. Check out the once-sensible, now-sycophantic William Safire -]
- ...To the great dismay of its closest European allies, the Bush administration threatened to block all UN peacekeeping missions as they came up for renewal unless American peacekeepers are granted immunity from prosecution by the International Criminal Court....
- ...Reports surfaced in Washington that planning for a large-scale invasion of Iraq had reached an advanced stage - even though most European governments have cautioned against cush an invasion and none of the nations that would be expected to assist American troops as staging areas have been formally consulted....
7/08 Myth America 2002 - How Europe has us wrong, op ed by Wm. Safire, NYT, A21.
Here are a handful of myths that cause what's left of Europe's left to misperceive US foreign policy:
[This at a time when Europe, shocked by its own petulant rebellion against the left for slow or reverse motion, is swinging back in deja-vu and disgust with the right (stay tuned for America's version of this swing in 2004) - we'll just run through the six so-called "myths" because there's more sense in them than in Safire's strained rebuttals.]
- ...America is temporarily dominated by self-serving isolationists who reject treaties designed by sensible Lilliputians to tie down the superpower Gulliver.
- ...[The temporarily dominant Americans] are interventionist bullies, with no regard for the sovereignty of countries whose threatening leaders are better dealt with diplomatically.
- ...The Bush administration, with its disdain for treaties, does not understand the nuances of dealing with nuclear-armed Russia, which must never be allowed to feel humiliated.
- ...Europe holds the high moral ground on providing aid to the Palestinian resistance, while Bush, in thrall to the [pro-Sharon] lobby, refuses to force Israel to abandon its occupation [our unquotes - ed.].
- ...America is in the clutches of hard-line, hard-nosed, bellicose warrior-executives, while Europe is the continent of highminded peaceseekers.
- ...The political popularity of Colin Powell will enable State Dept. worldliness to triumph over the Bush-Rumsfeld-Cheney cowboy mentality, enabling Europe's multilateral impotence to harness American superpower....
- [Our political isolationism discussed above (punctuated by 'surgical' interventionism) is matched by our financial-market isolationism (punctuated by 'surgical' downsizing dba 'one-time rightsizings') -]
7/7 That sinking feeling, again, by Kenneth Gilpin, NYT, 4:15.
Disappointing corporate earnings, serial revelations of accounting debacles and fear of terrorism helped [put] the returns of the vast majority of stock funds were yet again in firmly negative territory....
[And more -]
7/7 Is the bad news over? Not yet, says a debt watcher, by Gretchen Morgenson, NYT, 3:1.
...Sean Egan, managing director at the Egan-Jones Ratings Co., a credit analysis concern in Wynnewood, Pa., said investors should steel themselves for more corporate falls from grace. The revelations may not be as cataclysmic as WorldCom's almost $4B accounting boo-boo, of course. But Mr. Egan said a combination of heavy debt, deteriorating business models and risk-averse capital markets will keep woes at some companies front and center....
[Note the myth of corporate and financial America that they are completely independent of employees and markets. Hence, they never need to mention them - markets virtually don't exist. It's all about corporate accounting, terrorism, debt, market analysts - a completely insulated little world of self-important mutual masturbators. And there's more -]
7/7 Call it the [hapless or nervous or hidden or reversible or frail or moderating or anemic or easily short-circuited - pick one] recovery - Despite some setbacks, the data say the economy is rolling along - So why doesn't it feel better?, by Louis Uchitelle, NYT, 4:1.
[Maybe our official economic indicators are no better than our corporate accounting at disclosing problems??? Yesterday we had some acknowledgement of the crucial economic role of employment-earning-spending when the term "jobless recovery" came up, but today, though Uchitelle provides eight suggestions for describing the recovery, "jobless" is not among them. This selective blindness pretty well guarantees that it's not a "recovery" at all. We're into the money-funnelling twilight stage of the long wave that has historically been cushioned by dilatory but wealth-spreading worktime reduction and cured only by war or plague to remove the wage-damping glut of labor hours on offer in a constantly technology-cropped job market. Energetic worktime reduction has the potential to completely replace war and plague as a complete root cure. However, there will certainly be no root cure as long as guys like Uchitelle fail to discuss anything beyond the financial markets.]
7/05/2002 headlines from hell -
- A jobless recovery, pointer summary (to A1), NYT, A2.
...that resembles the slow growth of the early 1990's....
[and the main article -]
U.S. jobless rate at 5.9% in June, a slight increase - Sign of a weak recovery - In response to mild growth, companies seek efficiency instead of new workers, by David Leonhardt, NYT, front page.
...Since the start of the year, about 150,000 jobs have been lost over all among the more than 130m Americans on nonfarm payrolls. ...Unemployment [was] up from 5.8% in May and a 30-year low of 3.9% in late 2000....
7/04/2002 headlines from hell -
- U.S. plan for Iraq is said to include attack on 3 sides - Preliminary document envisions tens of thousands of troops, by Eric Schmitt, NYT, front page.
[A - this is a stupid act of aggression impelled solely by Baby Bush's desire to 'finish' his daddy's Gulf War and get re-elected.
B - while we're at it, why don't we just tell Saddam exactly how many planes and tanks we'll be using too.]
- Loophole lets lobbyists hide clients' identity, by Alison Mitchell, NYT, front page.
WASHINGTON...- It is a fact of life on Capitol Hill that new lobbying coalitions sprout almost every day to try to influence everything from electricity policy to bankruptcy law to healthcare legislation.
But the rising popularity of such coalitions goes beyond simply a desire to influence policy. Thanks to a loophole in the federal lobbying law, some companies and individuals - especially those pursuing controversial or potentially embarrassing causes - are using coalitions to conceal their identities....
- A&P again delays annual filing, pointer digest (to C2), NYT, C1.
[Oh nooo, Mr. Bill - another big auditing SPLAT en route?]
The Great Atlantic & Pacific Tea Co., owner of several large supermarket chains, failed to file its annual report by the end of the day Wednesday, fueling speculation that internal problems that had already delayed the filing may be larger than expected.
6/30-7/01/2002 headlines from hell -
- Washington [DC] - New low for voters, NYT, A11.
Voter turnout for the spring primaries hit a new low, according to the Committee for the Study of the American Electorate, a nonpartisan research group. The Committee found that turnout in the 16 states that had statewide primaries in both major parties averaged 16.2% of those eligible to vote, down from 17.6% in 1998. Even states with competitive races saw a decline, the Committee found.
[Guess plutocracy is taking its toll. Most states don't have competitive races and those that do are drowning in money from the rich and insulated = not a feedback system.]
- Sales tax defeats income tax in Tennessee battle - Resolving a budget fight that shut down government offices, by Michael Wilson, NYT, A8.
The Tennessee Legislature ended a 3-day government shutdown [last] night by raising the sales tax, the state's main source of revenue. Once again, efforts to enact an income tax in Tennessee - one of the nine states without one [another is N.H.] - died in the halls of the state Capitol, where garbage bags piled beside doors for want of maintenance workers. ...The [2.75%] increase will drive the average sales tax in Tennessee to 9.4%, among the highest in the nation....
[Brilliant. Tax the lifeblood of business and jobs = sales, instead of slapping a graduated income tax on the unspendable spending power of the top brackets. That should hasten Tennessee's slide into the Third World if it isn't there already.]
Opponents of the plan said it would encourage consumers to cross state lines to save money and contended that an income tax would be fairer.
[Anything that centrifuges the vast black holes of consolidated spending power in this nation is, never mind fairer, it's more functional and dynamic for the economy in question.]
...The...state ranks 50th in the amount of tax its residents pay....
- Secret of firefighting arsonists, by Nicholas Geranios, AP 07/03/02 16:28 EDT.
SPOKANE, Wash. - For firefighting crews, it is an inexplicable fact of life: Some of the wildfires that blacken the nation's forests and destroy people's homes are set by [fellow firefighters] hoping to cash in....
[Iinexplicable? No according to later in the article -]
"It's the fire community's dirtiest little secret," said Timothy Ingalsbee, director of the Western Fire Ecology Center in Eugene, Ore.... "There is a huge economic incentive to commit arson."... There were similar economic incentives during the Depression, when there was an epidemic of wildfires caused by desperate people seeking a paycheck, Ingalsbee said. Because of that, the government developed a small army of professional firefighters and prohibited local residents from fighting fires in their own areas.
But that policy was reversed in the 1980s and federal agencies were encouraged to use the closest available firefighters and hire private equipment, Ingalsbee said.
[So many intelligent designs were reversed in the 1980s, like the separation of church and state, thanks to the GOP leadership at the 1980 convention when they jumped in bed with the religious right.]
"They are not paid unless they go out on a fire," he said. "This [arson] will continue until that policy is changed"..\..
In the past decade, there have been an average of 116,000 wildfires per year, 102,000 of them caused by humans, according to federal statistics. Many of the human-caused fires are accidental, but Ingalsbee estimates that about one quarter - more than 25,000 - are caused by arson and another 25,000 might be. "We usually only hear of the very worst and blatant incidents, where people are caught red-handed or confess," he said.
Richard Mangan, a retired Forest Service fire administrator in Missoula, Mont., estimated that no more than 10-20 wildfires per year are deliberately started by firefighters..\..
[Is that just the number of people caught red-handed?]
But now that two firefighters have been accused of setting two of the most devastating wildfires in recent memory, arson in the ranks is getting another look....
Last year alone, a volunteer firefighter trainee was sentenced to life in prison for setting a fire near Pittsburgh that killed a family of three, and eight volunteer firefighters in Virginia were arrested for allegedly setting fires because they were bored.
- Prosecutors say economic motivation is...behind the largest wildfire in Arizona history [465,000 acres]. Part-time firefighter Leonard Gregg, a...resident of the economically distressed Fort Apache Indian Reservation, allegedly set fire to dry grass last month in hopes of earning $8 an hour as part of a fire crew....
- In Colorado, Forest Service employee Terry Barton is accused of starting a 137,000-acre fire - the largest in state history - that destroyed more than 130 homes..\..
[Ah boredom, a great unexplored factor throughout history.]
Two years ago, a former Forest Service fire safety worker was sentenced to three years in prison for setting fires in the Oregon woods. Authorities said she wanted to earn overtime pay fighting the flames....
Experts also suggest that firefighters aren't the only ones with economic incentive to set wildfires. Ingalsbee said federal policy over the past generation has privatized the firefighting support network - the water tankers, planes, food and other services used by crews nationwide - creating fire enterpreneurs whose livelihood depends on flame.... Many of the entrepreneurs are loggers who lost their jobs because of environmental protections and became free-lance firefighters, Ingalsbee said. Environmental groups also say Forest Service policies allow the logging of charred timber in areas that were off-limits before they burned..\..
It is a big business. The federal government spent $1.3B fighting wildfires in 2000 after media images of flaming trees spurred public demands for aggressive suppression efforts....
For earlier collapse stories, click on the desired date -
- 6/30 Could capitalists actually bring down capitalism? - Break enough rules and, at some point, the game might become unplayable, by Kurt Eichenwald, NYT, Week 1.
...Could the short-term, self-rewarding mentality of a handful of capitalists truly destroy capitalism?
[#1 - it ain't just "a handful." And #2, what's the alternative?]
..\..Could the short-term...mentality of...capitalists truly destroy capitalism? Bring on hundreds of bankruptcies, force banks under, end the giving of loans? Destroy America as we know it?
[Ah, isn't all this already happening? Many Americans sense we're turning America into a Third-World country as fast as we can.]
..\..Over the last few centuries, capitalism has been the heartiest contender in the global bout for economic supremacy.
But now, a staggering rush of corporate debacles is raising a disturbing question: can capitalism survive the capitalists themselves?
- It emerged from its decades-long death match with communism as the unquestioned victor.
- Its dust-up with socialism barely lasted a few rounds.
[Untrue and naive. It merged with socialism all over the world. Even the GOP in the US now pursues massive government involvement and interference in the economy plus stratospheric national debt.]
- It flourished in wartime...
[True, it only flourished during and after wartime, until the postwar babyboomers had a chance to replenish the surplus of labor hours in the job market.]
- and survived wrongheaded assaults from embargoes [what can he be thinking of - no one has attempted to embargo the U.S.] and tariffs [if they're so "wrongheaded," how come we're restoring them in steel and using subtler forms of them (subsidies, "industrial policy,"...) in many industries, starting with agriculture, mining, airlines, Amtrak, housing....
- Even terrorism aimed at capitalism's heart failed to deliver a knock-out punch.
[But the poison of paranoia is still working....]
[But there have always been a few farsighted capitalists with extended self-interest (Lord Leverhulme in England, Kellogg and Filene and James & John Lincoln and the guys on our miracle page) during peacetime, but there are a lot more of them during wartime (paying the steeply graduated income tax of wartime).]
...The latest scourge of whitecollar malfeasance might seem like more of the same \kind of\ corporate wrongdoing [as in] recent decades \in terms of\ insider trading scandals or the savings and loan debacle...with greedy executives cutting corners to make a profit. But in truth, the corporate calamities of the new millennium are of a different ilk, one that challenges the credibility of the financial reporting system, and in turn, the faith of investors in the capital markets - the very engine that has driven capitalism to its success.
[Perhaps surprisingly, we would maintain that the engine of its success has been its ability to enable people to share and cooperate more fully than any other system, but every 50-70 years, capitalism divides against itself, CEOs vs. investors, and the sharing in one critical area vanishes and takes a lot of other sharing with it.]
It wasn't supposed to be like this.
[A more informative sentence here would be, "There was a previous major attempt to design out this possibility."]
In the wake of the stock market crash of 1929 and the ensuing revelation of the scams and rigged dealings that had helped inflate the market, America [on a previous occasion] faced what appeared to be capitalism's chief vulnerability.... How did it happen?... Left to their own devices...some capitalists would aggressively pursue profits even if it meant cheating the investors who provided all the capital.
[There you have it - CEOs aka top management vs. their own investors.]
...The game [in the outcome of that " Kondratieff wave," however,] stayed the same, but the government put in referees. Congress passed the Securities Exchange Act of 1933 and 1934, and created a new federal agency, the Securities and Exchange Commission [SEC], to enforce those laws. Disclosure became the centerpiece of the system. Companies could pretty much make whatever business decision they wanted [oh no, they couldn't, unless you narrowly define "business decision"], so long as the material information was revealed to investors in periodic fllings with the SEC.
The result was an entire bulwark of protections:
[therein lay the problem - a burgeoning maximum of stifling little controls instead of stable minimum of freeing groundrules, theoretically just one. We missed the middle way in the great fork in the road and swung over to socialism.]
...All...these protections...turned out to be as permanent...as smoke. At bottom, the system still relied on faith - just in someone besides the top executives or company owners. The trust was given to the competence of the directors, the integrity of the accountants, and the abilities of [the] regulators. ...Back in 1933...a member of Congress asked [a] senior partner [of an accounting firm] who would be auditing the accountants? The reply was noble - and proved to be hollow - "Our conscience."... By the late 90's...that foundation of personal integrity had been eroded by easy profits.
- ...board of directors entrusted overseeing...management
- independent accounting firms...to insure the numbers were accurate
- government regulators...to supervise the rules
[A superficial reason. Digging deeper, WHY the easy profits? Because once again, as in 1929, a huge surplus of labor hours were flooding the job market and holding down wages and raises, so the profits of technology were pouring upward into the top income brackets in unspendable profusion, forming once again, the dread Black Hole economy, where the centripetal forces were so overwhelming, the concentration of wealth so intense, that it actually suctioned the markets away from its own necessarily huge investments.]
Eventually, driven by shareholder expectations and their own stock-option packages, some executives began hiding losses incurred in the faltering economy, manipulating the numbers they reported to investors.... [Now,] not only has the accounting branch of the market been tarred by Arthur Andersen's enabling of Enron's schemes, but, from company to company, insular boards of directors, incompetent internal auditors and underfunded regulatory oversight have allowed the perception of stringent standards and protections to wither..\.. The fact that their companies are, in all probability, bad apples among many, many honest corporations makes little difference. By being deceptive on their disclosures for short-term gain, these capitalists have led investors to question the reliability of all the reported data....
[So back to the original question -]
..\..Could the short-term...mentality of...capitalists truly destroy capitalism? Bring on hundreds of bankruptcies, force banks under, end the giving of loans?
[All this is already happening. Bankruptcies are booming, banks are in the pre-going-under stage of merging like there's no tomorrow, venture capitalists are pulling back.]
Destroy America as we know it?
[With 2,000,000,000 Americans in prison (world's highest, twice as much as Russia) and probably at least the same number homeless, we've already done that. What American of the 1950s would recognize the 50-60 hour workweeks and both-parents-working of today as the America s/he knew? In the article, Eichenwald answers his own question with party-line happytalk, starting with a veiled reference to the over-worked Invisible Hand, aka a...]
built-in corrective factor, which kicks in when abuses go too far. Harm to investor confidence harms the market, which harms the ability of corporations to raise the capital they need to grow and be profitable. Eventually, the capitalists' desire [to] get investor confidence back wins the day.
[The big problem with this happy little scenario, and all that follows it, is that it's still locked into the so-called New Economy mindset of a topdown economics based on stocks and capital, and completely devoid of markets and consumers and consumer base and effective demand. "The market" in the above paragraph means the stock market, and we're faced again with the arrogant assumption that that's all there is. The crashing naivete of Eichenwald, who evidently thinks that the fact "workers are going to take it on the chin" in terms of layoffs is merely a lamentable side-effect, instead of right on the cause&effect mainline of recession-depression. No connection between layoffs and consumer confidence and spending is drawn. In fact, the matter is completely dropped after the one mention. The article ends disappointingly with the impression that more honesty in corporate accounting is the answer, this is a cycle, and people will forget. The deeper questions are untouched -
why the compulsion to invest in weak markets in the first place? (our answer = the concentration of income is so great during a surplus of labor hours borne on an overlong workweek and inrushing worksaving technology, that there are few or no alternatives to absorb investment megabucks)
why the sudden spurt of corporate cheating in the first place? (our answer = the power gradient between employees and employers has tilted strongly toward employers because of the lack of any automatic mechanism to adjust the workweek downward to spread the earnings and spending as the waves of technological efficiency roll in. Spending power, uncentrifuged, coagulates in the top brackets without limit, and everyone else thinks, "Geez, why shouldn't I get my share too!" - the two problems being that "share" is completely undefined and limitless and since everyone's respect for the honesty or fairness of the envied Daddy Warbucks or whomever is zero, "I want MY share" expands to "I'm gonna get all I can any way I can." The old integrators aka power centifuges - "one person, one vote" and seniority's "one rate of enhancing entitlement" - are kaput, sidelined and trivialized.)
how come the last we heard of the game metaphor, and referees, was in the subtitle? (our answer = Eichenwald's article is just another attempt to anticipate and pre-empt any real questioning of and alternative-designing to our current short-term capitalism, but a hopeful editor stuck in the subtitle, raising unsatisfied expectations. The basic question of the sports metaphor therefore never comes up = What sports league could survive if the "games won" was not reset to zero for every team at the beginning of every season? Under the current primitive design of our economy, with estate tax under attack and even the Dems dismantling graduated income tax, what little built-in Jubilee or centrifuge we had has been de-activated, and the result is, our consumer base is being shrunk and de-activated. Our prescription? Timesizing.]
- 6/30 The Wall St. worries of the rich, by Jeff Sommer, NYT, 3:10.
A new survey has found that most affluent Americans are worried about corporate accounting, the reliability of Wall Street stock analysts and the possible economic effects of another terror attack.
[All missing the deepening danger of their own suctioning the markets away from their own investments by their intense and unspendable concentration of spending power.]
But despite declines in the value of their portfolios, they are not making any major changes in their investments, according to the survey, by the U.S. Trust Corp. Their largest investment holding continued to be stocks, comprising 33% of the value of their portfolios, compared with 37% in 2001....
[A 4% drop across one year? That's a major change.]
The survey was aimed at the wealthiest 1% of the population, which the company defined as households with an annual income of at least $300,000 or net worth of $3.75m. The telephone poll of 150 people was based on a random sampling and has statistical reliability of plus or minus 6%, according to U.S. Trust..\..
They continued to save an average of 22% of their after-tax income....
- Makin' us dizzy - Like a whirlpool, it never ends, by Maureen Dowd, NYT, Week 15.
Dick Cheney is a sly old fox. He wanted the Congressional cat to start chasing its tail. So he sicced the FBI dogs on it.
The VP called Porter Goss and Bob Graham, the chairmen of the Congressional intelligence committees looking into the 9/11 security debacle, to berate them about a leak to the press detailing missed interceptions at the National Security Agency about "zero hour" and "the big match." Never mind that this story had been circulating for months and that any number of agencies could have leaked it.
A churlish Cheney spurred the Goss & Graham team to call up John Ashcroft and ask him to conduct an FBI inquiry into whether their committees had been guilty of the leak.
[Thus] Mr. Cheney created a Machiavellian Mobius strip: the FBI is now investigating the committees that are investigating the FBI. Faced with the specter of interviews, polygraphs and new leak accusations, the lawmakers will be so busy playing defense with the G-men, they won't have time to go on offense against W's [Bush's] men....
Everywhere you look these days, you see situations that are absurdly contradictory and circular and self-defeating. [Washington] "reality" [our quotes - ed.] has turned into one huge, self-consuming loop. Call it Catch-2002....
- Learn now, pay back...later, by Beth Kobliner, NYT, 3:12.
...As college graduates enter the toughest job market in years, [they] are wondering how they will erase the red ink..\.. Emily Bittner graduated from Northwestern University last weekend...with $16,400 in student loans and $2,500 in credit card debt.... "Everyone is so upset and uncertain," said Ms. Bittner, 22, of Duluth, Minn. \despite her\ string of accomplishments.... She was managing editor of the school newspaper, received a prestigious national journalism award and completed an internship in Paris....
Students have been increasing their borrowing over the last decade - nearly 2/3 of all college seniors graduate with loans - because of both skyrocketing college costs and a wide expansion of the federal student loan program. For the most recent school year, the average annual cost for a four-year private college, including tuition, room, board, books and transportation, was $26,070, up 62% from a decade ago, while the average annual cost for a four-year public school was $11,976, up 59%, the College Board said....
- 7/01 Bush slashing aid for EPA cleanup at 33 toxic sites - Superfund is drying up - Administration wants to save money by limiting number of areas to be covered, by Katherine Seelye, NYT, front page.
[Now Bushbaby has us competing with the Russkis as to who can poison themselves fastest.]
Fouling our own nest - Bush's take on the environment, op ed by Bob Herbert, NYT, A15.
...The cuts were ordered because the Superfund toxic waste cleanup program is running out of money. Rather than showing the leadership necessary to replenish the fund, the pResident plans to reduce its payouts by cleaning up fewer sites....
Earlier Y2000 months accessible via links at bottom of Dec.1-10/2000 page.
Earlier 1999 months accessible via links at bottom of Dec.1-15/99 page.
Earlier months accessible via links at bottom of Dec/98 page.
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