DoomwatchTM vs. Timesizing®

Collapse trends - Oct. 16-31, 2002
[Commentary] ©2002 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080 - HOMEPAGE

10/31/2002  today's headlines from hell - qikis -
  1. Art and anxiety - Economic fears cast shadows over fall auctions, by Carol Vogel, NYT, B1.
    When times get tough, art pours onto the market....

  2. Earning more, paying more, pointer summary (to D1), WSJ, D1.
    The top 1% of taxpayers paid 37.4% of all federal personal income taxes for 2000 and received 20.8% of all adjusted gross income. In each case that figure was up just over a percentage point from year-earlier levels, and far higher that 1991 percentages, Tom Herman says in Tax Report.
    [And the target article -]
    Elites' slice of income grows as does their share of taxes, by Tom Herman, WSJ, D2.
    [This article seems to be voicing some of disarming squealing of those who have far more spending power than they can ever spend, though today's highest tax brackets are far below those of World War II years and the following 18 years, when the Democrats(!), already beginning to cave to PACs and lobbyists, started the dismantling of the steep war-required upper tax brackets (1963).]

10/30/2002  today's headlines from hell -
  1. Consumer confidence plummets - Index's drop to 9-year low gives Fed policy makers more reason to cut rates, by Ip & Freeman, WSJ, A2.
    [Compare the recent consumer confidence story from the Univ. of Michigan on 10/26/2002 #1 below.]
    1. Falling stock prices
      [this is the 1st reason only for the wealthy minority who read the WSJ],
    2. deteriorating job prospects
      [THIS is the 1st reason for the vast majority of Americans]
    3. and the threat of war with Iraq
      [if Dubya stays stupid]
    are depressing consumer spirits. And that is offering new signs that U.S. household spending, the pillar of world economic growth,
    [only for parts of the world that don't institute work sharing]
    is weakening.... The Conference Board said its widely followed index of consumer confidence plunged to a nine-year low of 79.4 in October, a 14.3 point dive that exceeded any drop in the measure since 1990, except for the one following 9/11. Such large declines rarely occur outside of recessions....
    [Apparently the Wall St Journal is still in denial about the continuation of the recession.]
    The business research organization's latest survey found Americans increasingly gloomy about both the current economic situation and the future....
    [No wonder with irrelevant and destructive morons like Dubya on the throne and cheerleaders like the WSJ in strained denial.]
    That corroborates other evidence, such as weak car sales, or a retreating consumer. "It seems people have finally been shaken," say Lehman Bros. economist Drew Matus [any relation to Castaneda's don Juan Mateus?], noting that the decline in sentiment occurred even though stocks had rallied strongly from their early October lows....
    [That should tell these fatcats that stocks depend on jobs, not vice versa. "Finally" is the operative term. The real question was how long it was going to take for consumers to reach the top of all their credit lines, and for our record national consumer debt to peak.]
    The Dow Jones Industrial Average fell as much as 170 points almost immediately following the report, but recouped those losses to close to close nearly unchanged...on the belief that corporate news may soon improve and that chances are good that the Fed will cut rates.
    ["Hope springeth eternal" in speculators' breasts and in the machinations of the financial industry desperate to lure suckers back into stocks. And if the Fed cuts rates further it will just cut the consumer spending of people on fixed unearned incomes. On the other hand, it will get US closer to Japan's virtual zero-level of interest rates and force TPTB (the powers that be) to grope for a real recovery tool = timesizing, instead of self-propagating downsizing.]
    Most other indicators closed lower.
    [Here's more insight into the WSJ's twisted party line -]
    Consumer spending has remained remarkably robust [OK so far] throughout last year's recession and slow recovery [dream on]. That is due to the lowest interest rates in a generation [interest rates this low cut both ways] and strong growth in disposable [what a laugh], the result of lower taxes [for the rich - HA] and high productivity growth [productivity without marketability is meaningless] that enables employers to pay more.
    [It gives little boost to consumer confidence and spending when employers merely pay more to their top executives. The WSJ and the rest of the insulated and isolated cadre of plutocrats average in these huge top-bracket income jumps with the sinking incomes of the rest of us and come up with - more happytalk.]
    Since mid-2000, consumer spending and housing - about 73% of total economic output - have grown at an average annual rate of 2.7%.
    [Yeah, consumers topped out their credit cards and turned to home equity loans to keep the dream alive.]
    Everything else - business investment in buildings, equipment and inventories [again putting the most important element last], government spending [which the WSJ wants to decline] and international trade [which the WSJ wants to be "free"] - has declined at an average annual rate of 3.1%. Total "growth" [our quotes - ed.] have averaged 1%.
    [Well within margin of error, considering the crap we continue to give ourselves brownie points for in our designed-for-cheerleading GDP.]
    The plunge in consumer confidence over the past month suggests that a stagnant job market [BINGO!] and shrinking stock wealth [trivial compared to jobs] threaten to overwhelm the benefits of low interest rates [a superficial and mixed blessing] and rising incomes [for a minority of the declining majority who still have jobs and, of course, for the top brackets].
    [Evidence of rising incomes for the top brackets? Next story -]

  2. A class warrior's guide to the soul, by Seth Donlin, Boston's Weekly Dig 10/23-30/2002, article flagged by colleague Kate Jurow, publication flagged by Matthew Tabor.
    [Donlin was probably inspired by Paul Krugman's brave article, "For Richer," in the NY Times Magazine 10/20/2002.]
    plutocracy n: 1: government by the wealthy   2: a controlling class of the wealthy
    robber baron n: an American [short-sighted - ed.] capitalist of the latter part of the 19th century who became wealthy through exploitation [as of natural resources, governmental influence or low wage scales)
    Merriam Webster's New Collegiate Dictionary
    Two years ago...I wrote..."According to the non-partisan organization, *United for a Fair Economy, the top 1% of households in this country have more assets than the bottom 95% combined. And the scary part is that this imbalance is growing. The pay gap between CEOs and workers is five times what it was just 10 years ago. Between 1977 and 1999, the top 20% of households increased their annual after-tax incomes by 43%, while the middle 20% saw an increase of only 8%, and the poorest 20% actually saw their annual after-tax incomes decrease by 9%."
    [And that's a formula for falling spending and consumer confidence, because the spending power of the nation is concentrating in unspendable amounts in the very top income brackets.]
    Unfortunately things haven't gotten any better since then and probably aren't likely to any time soon....
    [In fact they've gotten much worse, and Donlin gives the figures. But like Krugman, he fails to translate this into the self-interest of the rich and demonstrate that it is against their self-interest to allow so astronomical a concentration of spending power that they're vacuuming the markets away from their own investment targets, not to mention insulating and isolating themselves, despite grasping all the decision-making power of the nation, so the nation has a more and more severely obstructed feedback system. Where are the economists speaking truth to power and bringing these jarring facts home to the plutocrats with charts and diagrams? It is within the self-interest of the top income brackets to strengthen the centrifugal forces on income in this country. And the most gradual and market-oriented way of doing that is to make the length of the workweek automatically vary inversely with the unemployment rate, comprehensively defined, and to make the incidence of overtime and overwork automatically trigger their own resolution - via training and hiring.]

10/29/2002  today's headlines from hell -
  1. Despite happy talk, uncertainty damps outlook for economy, by Alan Murray, WSJ, A4.
    [Whoah, the WSJ, media cheerleader, panning happytalk? Radical!]
    Treasury Secretary Paul O'Neill seems to think he can talk the economy to good health. "The latest indicators look good," he told [ie: lied to] an audience at the Universityof Chicago last week.
    Really? Mr. O'Neill often reminds people that his record as a forecaster is as good as anyone else's.... But we're not talking about forecasts here; we're talking about facts. The Treasury secretary should know better....
    There is one bright spot in the American economy: housing. Thanks to low interest rates, Americans are engaging in an orgy of home-buying and refinancing, despite the other signs of economic weakness that surround them.
    [Probably their attempt, as Thea Bowen used to say, to "catch the last bus to the middle class."]
    The strength of the American housing market and the equity Americans are pulling out of their houses, is the shaky pillar on which the global economy now rests.
    [Or "the fraying thread by which the global economy now hangs."]
    But how long that pillar [or thread] can hold is a matter of debate....
    [And now the market for luxury homes is stagnating and mortgage rates are feinting upwards.]
    Faced with the huge uncertainties associated with an assault on Iraq and faced with an economy that is providing little incentive for investment, businesses and investors are choosing to sit on their hands and wait for the clouds to clear....
    [And that is something that the Great Depression taught us is not automatic. In the long wave, there's nothing automatically cyclic on the upswing side of the business "cycle." It's always some externality that removes the huge excess of labor hours from the job market (like plague, war, or... timesizing), raises wages and centrifuges spending power back out to the multitudes who actually SPEND IT that achieves the upside of the cycle. Until then, the dysfunctional consolidation of the national income in the relatively few pockets of "investors" is not only far beyond what they can actually spend to sustain consumption, but also beyond what they can actually invest to sustain economic equilibrium let alone restart growth. Hence "investors are choosing to sit on their hands." In depressions, it's not that the money isn't there. It's just that it's so concentrated in the black hole of the top brackets that it's effectively de-activated, so the velocity of currency circulation goes down and down.]

  2. We saved your job, but gave you more work, by Daniel Altman, NYT, E4, flagged by *Tom Walker of the SWT e-list.
    [This headline is basically the same message as the subtitle of Ben Hunnicutt's prophetic 1988 book, "Work Without End - Abandoning Shorter Hours for the Right to Work."]
    As the economy struggles to revive itself and layoffs mount,
    [Do we realize that these are in direct conflict?]
    companies have been trying to get more out of their workers....
    [AND out of their shrinking markets - hence the flood of spam and junkmail.]
    But from the workers' perspective, a productivity drive can mean new sources of stress - longer hours put in off the books [ie: slavery back from the dead] and the fear of following laid-off colleagues out the door..\.. Businesses like Dell Computer have used the downturn as an opportunity to shapen their competitive edge.... The company decided that it could become leaner and more efficient by changing its production methods, further automating its selling and simplifying the processing of orders.... Dell replaced a factory in Austin, Tex., that specialized in desktop computers for corporate clients. "We built a factory that is half the size and employs half the number of people"..\..said Felix Chou, director for global business process development at Dell..\..
    [What was that the mainstream economists chant about "Technology creates more jobs than it destroys"??   Here's a translation of the Ford-Reuther paradox into Dell-Reuther terms for thick-headed conventional economists - Dell, "Let's see you unionize these automated manufacturing and selling robots!"  Reuther, "Let's see you sell them desktop computers." In case you're missing it, the only resolution of this paradox is to trim working hours, not jobs. But doesn't that reduce weekly pay? No, because hourly wages are a matter of supply and demand, and when the supply of manhours is low and the demand is high, hourly wages go up and weekly pay stays the same or rises. But where does the the extra money for less worktime come from? It comes on the one hand from all the astronomical profits that are currently flowing to the top income brackets and just sitting there because they don't have time or need to spend them, and on the other hand, it comes from all the increased demand that arises as the centrifugation of the national income boosts the spending power of the multitudes in the middle and lower classes and strengthens consumer markets. Any more questions? ]
    Early in the recession, in May 2001, Dell announced [that it] would lay off 3,000-4,000 workers, in addition to 1,700 already let go, while trying to gain market share.... Now, Mr. Chou said, the factory can produce three times as many computers an hour as the old plant, allowing Dell to pay less overtime..\..
    [Whaaat? They were engaging in overtime while laying people off? This is suicidal. This is reverse timesizing and it de-activates your consumer-employees = your own and your customers' customers, faster than anything. Again, we're looking at self-contradictory policies. Dell is decreasing their best market, their own workforce, while trying to increase their market share. They want the markets but they don't want the employees that provide those markets. They looking for a free lunch. Near-sighted "free lunch" capitalism sputters on - at least for a couple more miles.]
    Most cuts came in sales and marketing, but the company also dropped jobs assembling computers.... One longtime employee said that for the first time in his many years at Dell, people feeling overwhelmed have been calling in sick simply to take a day off....
    [For the moment, Dell's sales are still strong. Sooner or later, their philosophy of technological displacement, widespread as is, is going to change that, even for Dell.]

  3. [and speaking of employees feeling overwhelmed -]
    The mood at work: Anger and anxiety, by Steven Greenhouse, NYT, E1, flagged by *Tom Walker of the SWT e-list.
    The ebullient mood of American workers [who still had jobs - ed.] during the 1990's boom has evaporated over the last two years, a victim of recession, rising unemployment, a hobbled stock market and scandals at WorldCom, Enron and other corporations....
    Some employees are questioning whether it is worth going the extra mile when asked by senior executives because, as the WorldCom scandal demonstrated, some executives are [just] looking out for themselves, not their corporations..\..
    Many baby boomers who were looking forward to a prosperous early retirement have been forced to rethink that dream....
    ["American retirement has turned into dying on the job or dialing 800-KEVORKIAN."]
    For the first time in two decades, most workers surveyed said they would vote to join a union if they could, looking to unions as a way to gain coveted protections on the job. And a NY Times/CBS News Poll...of 668 Americans conducted from Oct. 3 to 5 found that...70% of respondents say...the economy is worse than 2 years ago. This pessimism has influenced feelings about job security....
    [Or rather, vice versa. Tom Walker also flagged "Stop the clock? Critics call the billable hour a legal fiction," by Adam Liptak, NYT, E4, but said critics have nothing to put in its place, so we're left with the usual challenges of improving system accuracy and incentives for honesty. We don't think the article contains any criticisms remotely approaching cause to contemplate abolishing the billable time concept, and we believe the concept will be vital when we get to the stage of implementing timesizing for salaried employees, because at that point we will need to put an end to employer abuse of "salary" as a blank check on employee's lives and we'll need to set up a shadow time accounting system for salaried employees which will use the billable time concept. For that matter, do away with the concept of billable time and you essentially do away with the idea of wage work, which relies on it simply in a more standardized way.]

  4. [And job insecurity has a companion -]
    U.S. crime rate rose 2% in 2001 after 10 years of decreases, by Fox Butterfield, NYT, A18.
    [The AP version of this story has an even more informative headline -]
    Poor economy blamed for rise in number of crimes - Murder, robbery, rape, burglary all up in U.S. last year for first time in a decade, by Curt Anderson, AP via Seattle Post-Intelligencer via *
    [Oh nooo, don't tell us we've reached the limits of our mass incarceration policy of the last 10 years, when we've only reached 2,100,000 Americans incarcerated and another 4.5m? on parole or probation. Back to the NY Times version -]
    For the first time since 1991, serious and violent crime in the U.S. increased last year, the FBI reported yesterday. ...while aggravated assault dropped 0.5%. [However] figures for these [last] two crimes are considered the least reliable of the seven that go into the FBI's index because of problems with reporting and measuring them.
    Over all, crime rose 2.1% across the nation, the report said. Experts and law enforcement officials said the overall increase, after a decade of drops in the crime rate, appeared to reflect several factors: [Well our burgeoning nationwide private-prison building program is eager to accommodate new and returning criminals, as America, Land of the Free, launches belligerently into the Golden Future of the Third Millennium.]

[We considered 10/28/2002  today's headline from hell - qiki - 10/26/2002  today's headlines from hell - qikis -
  1. Durable orders and consumer confidence fall, AP via NYT, B4.
    ...Consumer confidence slid to the lowest level in nearly 10 measured by a University of Michigan survey. [It] declined to 80.6 this month, the lowest level since 1993..\.. The Commerce Dept. said that orders to factories for big-ticket durable goods fell 5.9% in Sept., the biggest decrease in 10 months....

  2. Another Asian nation battling a crisis in its banking system - China has its own mountain of nonperforming loans - More bad debts, relative to the size of the economy, than even Japan, by Keith Bradsher, NYT, B1.
    ...which has suffered for more than a decade from the overhang of bad debts from its speculative frenzy of the 1980s..\..
    China's government took a big step in 1999...setting up 4 asset management take over and dispose of the $170B of the banks' worst loans.... But now the falling far short of its goal....

10/24/2002  today's headline from hell - 10/23/2002  today's headline from hell - 10/22/2002  today's headline from hell - 10/16/2002  today's headlines from hell - qikis -
  1. Businesses feeling downdraft as customers stay away, by Kate Zernike, NYT, A19.
    ...Tourism in..\..the Washington area was suffering after 9/11. The new shootings have created fresh fears that are keeping customers away from businesses, as well.  Columbus Day, with its traditional sales, was flat, many businesses said....

  2. NASD takes disciplinary action against firms and individuals, by Corris Williams, WSJ, B9C.
    [Ever notice these chunks of bad news about Wall Street that the Wall Street Journal puts in tiny type that you need a microscope to read (excepting only the first paragraph which is normal size)? Pathetic. This example goes on for seven columns on four pages.]

  3. Banks make it harder to refinance - As applications pour in, lenders keep borrowers on hold and rates high..., by Ruth Simon, WSJ, D1.
    [Compare the tight credit of the Great Depression - it's not that the money wasn't there, it just wasn't in play. Compare also this other front-page Depression reference today -]
    Stocks shrug off recent battering with a big surge - Best 4 days in 70 years, by Gretchen Morgenson, NYT, front page.
    [Just as we're about to get our hopes up, we subtract 2002-70= 1932 = just before the worst of the Great Depression. So this surge is just a case of depression-period volatility. This was the year Art Dahlberg published his "Jobs, Machines and Capitalism," recommending we go cold-turkey for 2 weeks and cut to a 20-hour workweek. Talk about the disastrous effects of shock therapy on Russia in the early 90s. But on the basis of this book, Art became the academic backup for Hugo Black's 30-hour workweek bill which passed the US Senate the following spring. If FDR had pushed it through the House, the Depression would have been over in 12-15 months.]

For earlier collapse stories, click on the desired date -

  • Oct. 1-15/2002.
  • Sept. 10-30/2002.
  • Sept. 1-9/2002.
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  • July 16-31/2002.
  • July 1-15/2002 + Jun 30.
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  • Mar.12-31/2002.
  • Mar.1-11/2002.
  • Feb.16-28/2002.
  • Feb.1-15/2002.
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  • Nov.16-30/2001.
  • Nov.1-15/2001.
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  • Dec.21-31/2000.
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  • Dec.1-10/2000.
        Earlier Y2000 months accessible via links at bottom of Dec.1-10/2000 page.
  • Dec.16-31/99.
  • Dec.1-15/99.
        Earlier 1999 months accessible via links at bottom of Dec.1-15/99 page.
  • Dec/98.
        Earlier months accessible via links at bottom of Dec/98 page.

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