Good News, July 11-20, 2000
[Commentary] ©2000 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
7/20/2000 glimmers of hope -
7/19/2000 glimmers of hope -
- [1 UPsizing - unspecified new jobs]
Calpine Corp., NYT, C3.
...San Jose, Calif., a power-plant developer with projects in 27 states and Canada, plans to build and operate a $430m natural gas-fired 770-megawatt power plant in Haywood County, Tenn.
- [1 UNtakeover]
Leucadia terminates agreement for the Reliance Group, Bloomberg via NYT, C3.
Reliance Group Holdings Inc., the insurer controlled by the former corporate raider Saul P. Steinberg, said yesterday that the Leucadia National Corp. had ended [an] agreement to buy [it. It] has $237.5m in debt due in August and $290m due in November....
- The crime fighter - A study cites the role of jobs, op ed by Bob Herbert, NYT, A27.
...Now we have a study by a pair of Washington economists that appears to confirm a point that has seemed like common sense to a lot of people, but that politicians [and the Federal Reserve Bank since it abdicated its dual responsibility for inflation and unemployment - ed.] have never pushed vehemently enough; A job is one of the most effective weapons in the nation's crime-fighting arsenal. It's not just common sense but longstanding economic theory that suggests a link between lower rates of joblessness and lower rates of crime. The new study by the Economic Policy Institute looked at crime rates and employment statistics in several regions of the country between 1989 and 1998 and found evidence to support that theory.... The authors of the study [were] Jared Bernstein and Ellen Houston..\.. According to the study, "An examination of unemployment, wages and crime rates by region shows unemployment and crime rates falling together, and rising wages and crime rates moving apart."...
- TXU Electric and FPL Energy to build 242 wind turbines, AP via NYT, C3.
...build, own and operate [them. They] are expected to power about 29,000 [West] Texas homes. Construction on the 160-megawatt project will begin late this year and begin providing renewable energy from the 166-foot-tall wind turbines by the end of next year. FPL Energy is an independent power production subsidiary of the Florida Power and Light Co., one of the nation's largest providers of electricity-related services.
- Food companies urged to end use of biotechnology products, by Andrew Pollack, NYT, C6.
A coalition of consumer and environmental groups announced yesterday...it would target well-known food companies..\..starting with the Campbell Soup Co...and try to generate thousands of letters, phone calls, and signatures on petitions urging them to stop using genetically modified foods until more testing was done. The group also wants all companies to label products that contain such ingredients.
In Europe, food companies have largely abandoned the use of such ingredients because of consumer oppostion fanned by aggressive campaigns.... [Besides] Consumers Union, which is cooperating with the coalition though not a member...the other groups in the food alert coalition are
- the Center for Food Safety,
- Friends of the Earth,
- the Institute for Agriculture and Trade Policy,
- Organic Consumers Association,
- Pesticide Action Network North America, and
- the State Public Interest Research Groups.
- Republicans, off to the edge - Estate-tax enmity and other errors, by environmental lawyer & Nelson Rockefeller-nephew Larry Rockefeller, NYT, A27.
...As a Republican, I ask my party: Is it worth it to be known increasingly as protector of the rich and powerful, despite the appreciative response in campaign contributions? The party risks placing itself out of what my uncle, Nelson Rockefeller, called the mainstream... Today the truth is this: It is out of the mainstream when the Republican Congress
What a contrast with the record and values of progressive Republican governors like New York's Theodore Roosevelt, Nelson Rockefeller and, yes, George Pataki. So what's a mainstream Republican to do in this year's elections? Think hard - and act independently.
- fails to protect patients' rights
- withholds education funding and
- makes war on the environment.
- It's out of the mainstream - and at odds with true Republican principles of fiscal responsibility - to plunge back into deficit spending, as Governor Bush has in Texas with big tax cuts for the oil industry and others.
- It's out of the mainstream - and at odds with traditional Republican standards of liberty - to put the federal government between a woman and her doctor in matters of reproductive choice, as Governor Bush and the party would try to do by overturning Roe vs. Wade.
- And it's out of the mainstream - and at odds with Republican preference for government closest to the people - to override local government efforts to limit sprawl
- and protect drinking water, as Governor Bush did by veto, or
- to side with gun makers against local attempts to hold them accountable for harm done.
- It was far from the American mainstream - and at odds with talk of "compassion" - to withhold medical insurance from 200,000 children, as Mr. Bush did for three years in a state that ranks rock-bottom last in family health coverage;
- to try to invade teachers' retirement funds;
- to oppose a hate crimes law even after a black man was dragged to death;
- and to allow concealed guns to be carried even into church.
[Sounds like more support for independent 3d-party (Green) candidate Ralph Nader, since we could go through a similar laundry-list of betrayals-of-their-own-principles on the part of the Democrats - to mention only one rich vein, the betrayal of labor.]
7/18/2000 glimmers of hope -
- 2 UNtakeovers -
- Ceridian to separate into two companies by year-end, AP via NYT, C4.
...two independent, publicly traded companies...in a tax-free reverse spinoff, meaning the larger unit is being spun off....
- E. I. Du Pont de Nemours & Co., NYT, C4.
...Wilmington, Del., ended an agreement to buy a research and development facility in Romainville, France, from Aventis S.A.
- Measure takes aim at junk e-mail [aka "spam"], AP via NYT, C8.
Legislation passed by the House yesterday would make it easier for consumers to keep unsolicited junk e-mail off their computers. The legislation requires senders of unsolicited commercial e-mail messages to use valid return e-mail addresses so that recipients can ask to be taken off the mailing lists. The measure assigns enforcement authority to the Federal Trade Commission [FTC].
[Boy, is this long overdue!]
7/17/00 weekend glimmers -
- Japan keeps interest rates near zero - Failure of [Sogo] store chain worries central bank, by Stephanie Strom, NYT, C1.
[Good, this will continue the experiment that on an ongoing basis, proves that interest-rate manipulation is superficial and something on a more deep-structure level is required to pull an economy out of persistent recession/depression. What is needed is the deconcentration of money, via the alleviation of labor surplus, via the removal of labor hours from the job market. A shortage of labor hours gets employers bidding against one another for workers, and centrifuging their huge stored capital into the hands of people who actually go out and spend it, creating a solid, demand-pulled boom, unlike our current supply-pushed bubble. Labor hours can be withdrawn in various ways -
- stupid - killing people by war (e.g., First and Second World Wars) or plague (e.g., Black Death of 1348 and ensuing economic boom) or emigration (currently proposed by President-elect Vicente Fox of Mexico as a solution to his country's economic problems and long followed by Britain, e.g., shipping emigrants to North America or Australia)
- smart - set and enforce a maximum workshare per person (most conveniently, a maximum workweek) and adjust it downward automatically as work-saving technology pours into the economy, preferably in conjunction with continuous training in the workplace - Timesizing offers such a program]
- Fed report seen as affirming law's value, AP via NYT, C5.
...A new Federal Reserve report...sent to Congress yesterday, laced with caveats, indicates that loans made under a 1977 federal law are generally profitable for banks.... The Community Reinvestment Act [CRA] requires banks to make loans in low-income and minority areas in which they operate.... The Fed report...says "virtually all" of the 143 large US banks and savings associations responding to the survey reported that such lending "has led to new customers and additional loans." About two-thirds of the responding banks also reported other benefits, such as promoting a positive image in the community.... The central bank mailed out questionnaires on Jan. 21 to the 500 largest retail banks and savings associations. Participation was voluntary; 114 banks and 29 thrifts responded - accounting for 40-55% of total lending under the CRA. The survey reflects the experiences of large banks in a strong economy, and results could be different for smaller banks or under toughter economic conditions, the Fed noted....
[Under economy-wide work&skill sharing, we would not need this kind of government micromanagement. This is one of the host of peripheral areas that government only has to balance when it has frozen an imbalance right in the middle of the economy = a 60-year-old and unenforced workweek, despite inrushing, work-saving technology. But until we quit fiddling around and integrate our diverse population with a flexible, market-oriented work&skill sharing program, we will need this blizzard of less efficient, peripheral adjustments.]
- [Finally, a Harvard professor tackles the currently untouchable subject of...immigration.]
Mexico's one-way remedy - The U.S. can't fairly handle open immigration, op ed by George Borjas of Harvard's Kennedy School of Government, NYT, A25.
...More than seven million Mexican immigrants now live in the United States, a number equal to 7% of Mexico's current population. And we get an additional 130,000 legal Mexican immigrants and 150,000 illegal ones annually..\.. President-elect Vicente Fox of Mexico...proposes that the United States immediately provide 250,000 visas a year to Mexican nationals, accomodating much of the desire to move here, and that within 10 years, our countries share an open border, with free movement of people and goods. This would be good for the Mexican economy, reducing labor market pressures, and pleasing to many Mexican immigrants in the U.S., who maintain an interest in Mexican politics and are increasingly powerful there. But it would be far less likely to benefit the United States.
The U.S.-Mexico wage gap is among the largest between contiguous countries. A manufacturing worker in the U.S. earns four times the salary of a Mexican factory worker and 30 times that of a Mexican agricultural worker. These differences ensure that an open border would increase the number of immigrants. [How much?] The Puerto Rican experience may be instructive. Puerto Ricans are American citizens who can move freely within the United States, and the differences in economic opportunities between Puerto Rico and the mainland are quite large. Not surprisingly, about 25% of Puerto Rico's population moved to the United States in the last 50 years. Even if the Mexican migration response were only half that of Puerto Rico, total Mexican immigration to the U.S. [would] be 12.5m, compared with the current 7m.
The new immigrants would probably resemble the Mexican immigrants already here, whose poverty rate exceeds 33%. Research that I conducted with my Harvard colleagues Richard Freeman and Larry Katz showed that the large-scale immigration of low-skill workers during the 1980's and 1990's, by increasing the pool of low-skill workers, reduced the relative wage of native workers with less than a high school education by 5 percentage points. This group's wages would be further eroded under Mr. Fox's proposals.
[We continually whine about our "widening income gap," not realizing how our national mythology of Miss Liberty's "give me your poor, your huddled masses longing to be free" fuels it.]
Some say that Mexican immigrants take jobs that Americans do not want, but a more sensible statement is that Mexican immigrants [and indeed, immigrants in general - ed.] take jobs that Americans do not want at the going wage.
[And so that wage is never raised, and money continues its astronomical concentration in the upper income brackets, thus widening the income gap ever further. But Prof. Borjas goes on to answer the alarmist question, "But wouldn't that raise costs and hurt consumers?"]
The service sector remains alive and well even in those parts of the country that have not been penetrated by heavy immigration. It just costs more to have a manicured lawn in New England than in Southern California.
Almost 30% of the immigrants now living in this country are of Mexican origin. (In 1920, after decades of heavy immigration, the three largest groups - Germans, Italians, and Russians - together made up only a third.) Numbers like these slow assimilation because a large immigrant group can maintain its separate identity, culture and language far into the future. It is unfashionable to view the melting pot as desirable, but is balkanization good for the United States?
The free movement of people is not the same as the free movement of goods [i.e., it has even more impact - ed.] And, as we will surely relearn in the next economic downturn, the United States offers public services that are far more expensive to maintain when there are many immigrants who are poor and low job skills.
[Ha, we haven't even achieved that here - we just periodically say we've achieved it - just before a crash. Permanent prosperity is, however, available to any country without foreign help, simply by sharing the vanishing work (and high-demand skills) à la Timesizing. Timesizing is the only complete core-economy design available at the dawn of the third millennium. It is the only economic design that ties population variables (imports, immigration, births) to quality-of-life factors (speed and depth of workweek reduction). It poses the right tough questions we need to be asking today and offers workable first-cut solutions. It is a simple 5-phase program but it is unique in its comprehensiveness. Bucky "Mr. Comprehensiveness" Fuller would be delighted with it.]
- The United States should begin to reflect more seriously on its huge income disparity with Mexico, and
- the onset of democracy there suggests that it may be time to think about a Marshall [Plan] to introduce permanent prosperity....
7/15/00 glimmers of hope -
- Utilities trying new approaches to pricing energy...U.S. companies varying fees based on supply, demand and even time of day - Special electric meters can alter the use of air-conditioners..., by Matthew Wald, NYT, front page.
[Airlines are already doing this. And basically, now that we have the technology, this is going to start happening in every market. Our usual example is the restaurant with the changeable menu prices listed in the window, depending on how much space there is left in the restaurant. Your prices would be locked in and printed out for you when you walked in.]
7/14/00 glimmers of hope -
- 3 UNtakeovers -
- 3Com, a computer networker, sets spinoff terms, AP via NYT, B3.
...A computer networker firmed up the terms of its $23B spinoff of its hand-held computing device maker Palm Inc....
- Huge railroad merger in doubt after U.S. court upholds ban, by Anthony DePalma, NYT, B1.
The American [Burlington Northern Santa Fe] and Canadian [Canadian National Railway] railroads that were planning to combine resources to create a rail system spanning North America lost a court appeal yesterday and will probably end up scuttling their proposed $6B merger....
[That's good. The Burlington Northern-Santa Fe merger was far more than these clowns could handle already. The actual end is noted in "Blaming regulators, rail merger partners call off the deal," by Anthony DePalma, 7/21/2000 NYT, C2.]
- A takeover of Reliance falls through - Leucadia balks at pile of debt coming due, by Floyd Norris, NYT, B1.
...Leucadia National, which had agreed in May to buy Reliance for $295m in stock, said it was unwilling to proceed with the transaction [with Reliance Group Holdings]...
[That's the good news. And the bad news...]
...but left open the possibility the possibility that it might reach another deal with the struggling insurance company.
- Tobacco lawsuit in Florida yields record damages - A $144.8B verdict - Victory for 500,000 smokers, but companies will appeal - Case may last years, by Rick Bragg, NYT, front page.
MIAMI...- In the largest damage award in U.S. history, a jury in Miami-Dade County ordered the tobacco industry [yester]day to pay...punitive damages to some 500,000 Florida smokers.
[How much evidence do we need that keeping a drug uncriminalized works? The failure of Prohibition and the success of the battle against nicotene - what could be clearer. Decriminalize drugs and tax them for their costs. If it goes like the nicotene battle, soon the addicts themselves will be suing the Colombian drug lords for everything they've got.]
But even as some of the sick smokers and the widows and widowers of others celebrated the verdict as a sweeping victory over the industry, tobacco executives called the award ridiculous, and one that would push the companies into bankruptcy, if it is ever paid....
[So their point would be...?]
7/13/00 glimmers of hope -
- 2 UPsizings, totaling 1,460 new jobs -
- Corning sets expansion, by Peter Howe, Boston Globe, C6.
Corning Inc...said its board had approved a $225m expansion of its Bedford-based Lasertron unit [but] has not decided where it will build the new factory [although] sites in Greater Boston are being considered.... Corning photonics general manager Gerald J. Fine said the new expansion round will increase Lasertron's manufacturing capacity sixfold by 2002 and create 1,150 new jobs.
- Juniper Networks is buying 80 acres for an expansion, Bloomberg via NYT, C4.
...in Silicon Valley to expand its headquarters. The company's employees have more than doubled to 570 from 260 a year ago. The land...is adjacent ot Juniper's new campus in Sunnyvale, Calif., which can accommodate 1,700 workers....
[So, Juniper has added 570-260= 310 new jobs in the past year.]
- only 1 UNtakeover, but a big one -
- Worldcom and Sprint end their $115B merger, by Simon Romero, NYT, C5.
...bowing to pressure from regulators, who were concerned that the creation of such a large telecommunications company would stifle competition.
[The Timesizing.com "line" and prediction on all this - we're not against companies growing their own market share but we believe that acquiring it will be barred in the future unless a majority of employees in each company favor the change (this will trend toward the inclusion of rank&file employees in the huge windfalls that top executives often gain from M&As) - mainly, companies will have to wax and wane on their own - the "old-fashioned" and honest way. The whole M&A approach is simply too unreliable, inefficient and disruptive to the lives and livelihoods of "consumer-base units," that is, individual employees. But there will be so much balance and commonality of interest built into big companies at the level of the individual employee (including the top executives), once a company grows big on its own, like AT&T, no breakups or antitrust will be deemed necessary. The whole dimension of competition will shift from synchronic inter-company to diachronic intra-company. In other words, companies will be competing with their own past performance rather than with one another.]
- [economist breaks ranks & questions obsessive-compulsive inflation quashing -]
Jobs and inflation, letter to editor by Robert Cherry of Brooklyn College economics, NYT, A26.
As you note in a July 11 editorial, the welfare-to-work transition was much more successful than expected as a result of a strong "economy that cut the unemployment rate in about half."
[We believe the strength of the economy is superficial and the unemployment rate is high by the solid-boom standards of 50 years ago (when the Fed still obeyed its mandate to steward unemployment first and inflation second) and is not counting anything significant. However, employers have gradually become so spoiled by the global labor surplus over the last 30 years that they start whining whenever even our count-nothing unemployment rate declines even a millimicron. This kind of exaggerated alarm accounts for the next effect that Robert Cherry observes -]
Corporations could no longer indulge their misconceived stereotypes [of lazy welfare recipients - ed.] and were forced to hire welfare recipients.
[In other words, corporations could not get enough visas to import cheap, young, already trained foreign workers fast enough so, "drat it all," they had to knuckle down and do the right thing for a change = hire excluded people already here and maybe, oh horrors, maybe even TRAIN them. Oh the expense! It almost threatens American executive pay, which is 400 times lowest-employee pay, a world record. The payoff for conservatives is that when companies hire welfare people (or disabled, homeless and incarcerated), government can shrink and stop soaking taxpayers for these people's subsistence. American "capitalist" companies have become awfully addicted to passing off the costs of their mass layoffs to the government and the general public in welfare, disability, homelessness and prison bills.]
But what of the dangers inherent in the Federal Reserve policy of eliminating tight labor markets?
[Good question and succinctly put. This policy exactly reverses the conditions of every solid economic boom during the history of at least the last seven centuries. As early as 1348 when the Black Death killed 25% of Europe and created extremely tight labor markets, squealing squawking kvetching complaining whining employers bid one another further and further up for labor and triggered virtually the biggest solid boom in economic history up to that time. Because the ordinary people they paid the higher wages to did not hoard the money as the rich did, - they went out and SPENT IT - on bread and wine and all the stuff they had seen and wanted but not been able to afford because the rich held all the cards - the power and the money. And a solid boom is always a demand-led boom, not like our current supply-led, advertising-intensive hollow boom aka bubble. The trouble is that all the squealing fat employers finally get their way and stupid policies like the Fed's current "fight inflation only and absolutely!" Dumbheit take over and induce the downside of the business cycle.]
The policy has had a small but adverse effect on young and less educated workers.
[Guess this is a big admission from a "brain-dipped" standard economist. We maintain that it's a huge and adverse effect on all employees, even those enjoying the temporary benefits of a spot skill shortage as in the Silicon Valleys and canyons and glens of today's high tech frenzy. They get money and benefits, sure, but they're expected to give their employers a blank check on their lives, so they're working hours that haven't been seen since the 1840s.]
Further slowdowns in job growth will make it harder for many people to retain employment and for additional welfare recipients to find it. Isn't the ability to get these groups into the mainstream worth the risk of a bit more inflation - or are the interests of bondholders paramount?
[Depends if they want their bonds to stay worth something. "The more concentration, the less circulation." As we concentrate more and more wealth and income and employment and skills among a smaller and smaller percentage of the population, we starve the consumer base - the circulation base - on which all stored value relies. Current economic theories, skewed by "practical" needs of universities to snuggle up to the rich, are all in the Dark Ages about the marginal efficiency of concentrated capital. Robert Cherry has made a teensy step toward shining some light into those Dark Ages.]
7/12/00 glimmers of hope -
- 2 UPsizings, totaling 3,400 new jobs over 1½-3 yrs -
- Hewlett-Packard plans to hire 2,500 over three years, Bloomberg via NYT, C6.
...consultants and technicians...as part of a push by its chief executive, Carly Fiorina, to triple revenue from services to at least $15B by 2003.
[Go, Carly! - one of the Fortune 500s' now-down-to-three? female CEOs.]
The new workers will represent an 8.3% increase to Hewlett-Packard's 30,000-person services work force, which installs and maintains companies' computer networks. The company [is] the No. 2 computer maker....
[So still behind IBM but nosed out Compaq?]
- Boston Scientific to cut 1,000 jobs for coming move, Bridge News via NYT, C6.
...The company, based in Natick, Mass., said the plan would involve a net gain of 100 jobs in its Miami plant; 525 jobs in Cork, Ireland; and 275 positions in its plant in Galway, Ireland....
[Let's see - 100+525+275= 900 new jobs, but set that against 1000 jobcuts and 900 "moves."]
- [Another triumph for the 'greatest country in the world' -]
Aid for mentally ill leaving jail, by Nina Bernstein, NYT, A23.
A [NY] state judge ruled yesterday that the city [of New York] must arrange for the continuing mental-health care of thousands of inmates before they are discharged from the Rikers Island jail, and not "drop them in the middle of the night at a subway station with $3 in tokens or MetroCard fare".... A lawsuit filed last fall by Brad H. and six other mentally ill inmates of the jail...said the 25,000 inmates who are treated for mental illness each year while in Rikers were being released without proper provision for treatment in the community or a way to continue their medication. The city did not dispute these facts, but said inmates at Rikers had no legal right to the kind of prerelease planning required for mental hospital patients. Justice Richard F. Braun of State Supreme Court in Manhattan rejected the city's arguments....
[So the real functioning of our outdated and overwhelmed (both by the money of the rich and the concentration of decision-making) representative democracies at the city, state and national levels is being foist onto our overloaded courts of law. It's long past time we moved to a rolling, 7/24, electronic referendum system, now that we have the technology.]
- Anticipate financial crises and prepare, Greenspan says, by Richard Stevenson, NYT, C13.
[Pluralizing the problem belittles it. We'd say "Anticipate financial crisis and prevent - by sharing the vanishing work via Timesizing".]
Saying that globalization is showing no signs of slowing and that further international financial crises are all but inevitable, Alan Greenspan, the Federal Reserve chairman, offered a wide-ranging set of prescriptions last night for preventing and coping with acute economic problems around the world.
[Offering a "wide-ranging set of prescriptions" trivializes the problem and leaves uncorrected our ongoing Chesterton flaw. We don't need a bunch of bandaids and cosmetics - we need a fundamental restructuring based on a new, market-oriented sharing technology. We need to move from "one person, one vote" to "one person, one range of market-demanded employment" on a flexible basis, so however little human work there is left, we are sharing it and not letting it concentrate on a few. But let's look at Greenspan's grocery list of nostrums -]
Drawing on lessons learned during the financial crisis that began in Asia in 1997,
[What Greenspan implies but falls short of saying is that "strong" banking systems are diversified and decentralized banking systems that have lots of financing sources. Note that we are going in exactly the opposite direction right now, with massive mergers of American banks and financial institutions, and the repeal of the Glass-Steagall Banking Act of 1933 which built firewalls between banking, brokering and insurance.]
- Mr. Greenspan said industrialized and developing countries alike needed to focus on developing strong banking systems and active capital markets so that if one source of financing dried up, another would be available.
- He stressed the need for governments to regulate their financial systems adequately,...
[...meaning exactly what in terms of measures and levels?...]
- ...for governments and the private sectors to provide investors with full and timely economic and financial information,...
[...which we are not doing by peddling our current count-nothing unemployment rate...]
- ...and for governments not to insulate investors from risk by bailing them out when times become tough.
[Dear, dear, what a radical thought. It goes against the whole "capitalist" strategy of privatizing and concentrating gain, and socializing and centrifuging risk! The dirty secret of our current rough&toughguy capitalism is that it's thinly veneered corporate socialism. But you can only go so long downsizing and draining your own consumer base and markets before their support of you vanishes.]
Speaking to the Council of Foreign Relations in New York, Mr. Greenspan did not mention current economic conditions in the United States...
[Greenspan is spending an awful lot of time preaching to other economies when his own could use a lot of improvement. Maybe he should speak less for "governments and private sectors" around the world and concentrate on "cleaning his own house" - the USA. Maybe he should quit living in a glass house and remedy America's own economic sins ere he starts "throwing stones" - maybe polish his own "pot" before he starts "calling the kettle black."]
...or provide any hints about whether the Fed would raise interest rates again when it meets next, on Aug. 22....
[Ever notice the similarity between our Fed chairman and the Oracle at Delphi, 2500 years ago. Both were experts at constructing and mouthing ambiguities. They really didn't know.]
Mr. Greenspan broke no new ground in his speech.
But he said it was "essential that we employ the current period of relative international financial stability to address as best we can [sic - Lord, the man can't even speak good English - ed.] some of the more evident short-run potentials for crises."
[That is certainly our Timesizing.com strategy. There was virtually nobody tracking the subsurface deterioration during the Roaring 1920s. We're going to make sure somebody is doing it today, even if it has to be us. "It's nasty work, but...."]
- [Delayed nostrum #1 -]
The key, he said, is to develop "flexible institutions that can adapt to the unforeseeable needs of the next crisis, not financial Maginot lines"....
Timesizing minimizes downturns by keeping people together, employed, and merely trimming a few working hours for everyone, instead of trimming a jobs completely for a few, and a few more, and a few more...and overloading the survivors, thus demoralizing everyone. In addition, Timesizing confers the incomparably competitive feature of continuous training in the workplace, market-targeted via overtime reinvestment. It is so far superior to the laughable "wisdom" of business schools today that it might as well have been intimated by a time traveller. Greenspan needs to adjust his focus for a much wider-vision field.]
- The 60-years-frozen and unenforced American maximum workweek of 40 hours is a financial Maginot line, but Greenspan is not looking at something that obvious and pervasive.
- The record low American training rate today is not exactly what you'd call flexible. Near-sighted US executives think, with Greenspan, that because they can discard employees en masse "without fear of significant legal or cultural disapproval" they have labor force flexibility (see yesterday's item "Technology is heightening job worries, Greenspan says" - Greenspan should be shamed and embarrassed for making such a statement just as Gov. Christie Todd Whitman was recently for frisking that black man three years ago). It's ready and accessible training that makes for labor force flexibility - nothing else comes near it.
- The current common American management strategy of mass firing +/- rehiring is touted as flexible and competitive by American executives, but is actually traumatizing, demoralizing and isolating for everyone else (trauma rigidifies, demoralization de-energizes, and isolation vulnerabilizes) - hardly what you'd call a "flexible institution that can adapt to the unforeseeable needs of the next crisis."
The best insurance against allowing a nasty surprise to develop under the cloak of complexity, he suggested, is to limit the amount of debt in the system.
[Hello, Alan, why aren't you reraising the margin requirements then, as conservatives have been begging you to do for years?! Why aren't you recommending that the ghostly "surplus", if any, be immediately funnelled into our trillions-high national debt to cut the interest payments and give us more flexiblity?!]
- [Delayed nostrum #2 -]
Mr. Greenspan spent much of his speech building a case that countries with both strong banking systems and healthy capital markets [eg: US and Sweden] were far better able to weather financial troubles than countries that have only one or the other....
[As if our banking system is strong when we're merging toward One Giganto Bank, or our capital markets are strong when our P/E ratios are dozens of times higher than loooong-term historic norms? Hel-lo-o. The only reason the US has "come through crises relatively unscathed" was because every scared fatcat elsewhere in the world poured his/er should-have-been-reinvested-at-home billions into the US for safekeeping, purely because of its bigness - yet another unsustainable crash-postponer.]
7/11/2000 glimmers of hope -
- [1 UPsizing - 45 new jobs]
Leo Burnett [USA, in Chicago] to form health care unit, by Bernard Stamler, NYT, C6.
...devoted to consumer health care advertising named LeoHealth, with more than 45 employees....
- 2 UNtakeovers -
- Applied Power Inc., NYT, C4.
...Waukesha, Wis...plans to spin off its APW unit, which makes computer and electrical-equipment housings, and to change its own name to the Actuant Corp.
- Fleet to shed 1 of 2 venture capital units, by Beth Healy, Boston Globe, D7.
The smaller of FleetBoston Financial Corp.'s two venture capital arms is splitting off from the Boston banking company in August. The former Fleet Equity Partners will now be Navis Partners, based in Providence....
- [Fed chairman finally glimpses the obvious -]
Technology is heightening job worries, Greenspan says, Bloomberg via NYT, C2.
WASHINGTON...- Rapid technological change is making jobs less secure in the United States, Alan Greenspan, the Federal Reserve chairman, said [yester]day, suggesting those anxieties would keep a cap on wage demands and inflation even as unemployment holds close to a 30-year low.
[The next step for our pea-brained central-bank chairman is to realize that as technology multiplies output, we do not want "a cap on wage demands,' because somebody has to buy all this stuff. The cap on wage demands just temporarily funnels all the profits from the additional output to the top income brackets, and they don't have the time or the need to buy all the additional technology-multiplied output. It's the old Ford-Reuther paradox again = Ford, "Let's see you unionize these robots!" Reuther, "Let's see you sell'em cars." At least Greenspan seems to be dimly sensing that downsizing is bad -]
This "heightened level of potential job dismissal," Mr. Greenspan told the National Govenors' Assoc. conference in State College, Pa., is a "less welcome byproduct" of the expansion of real-time information and use of the Internet, which are transforming the labor market....
[Then why does he praise "the ability of American companies to fire workers without fear of significant legal or cultural disapproval" below as positive "labor force flexibility"??? Greenspan has a little contradiction in his thinking right here, we believe. And "transforming," shmansforming - "the expansion of real-time information and use of the Internet," plus the inrushing robots are marginalizing a labor market based on a frozen 1940-vintage share-per-person of employment, dba maximum workweek. And insofar as America, compared to Europe, is keeping labor marginalized and insecure, it is developing subtle resistance to innovation and technologization, becoming subtly luddite (technology fighting), and falling behind Europe in applied technology. This was pointed out by Alex Marshall in his op ed, "The future of menial jobs," in the fifth item under 7/09-10/00. By keeping the vast majority of its citizens insecure and underpaid for their hugely tech-amplified output, the USA is being too clever for itself - it is redeveloping the 1928 imbalance between colossal investment capital and inadequate market-supported investment targets. Why? Because the insecurity-borne concentration of income and wealth is so gigantic that it is effectively suctioning the markets away from its own current and potential investments. Next stop, market crash, then depression and then war (unless we "get it" this time and substitute worksharing, such as timesizing, for any step along the way). How many times do we have to rerun this scenario before our "gurus" get it?! Sismondi was commenting on this pattern back in 1819! So far our brilliant "captains of industry" are only struggling with Square One -]
"In the past," said Ian Shepardson, chief US economist at High Frequency Economics in Valhalla, NY, "Greenspan has used the worker insecurity story to help explain the relatively low rates of wage increases in the current expansion."
[Whoah, there's an admission in itself!]
The comments by Mr. Greenspan suggest worker demands for higher wages are being moderated by the fear of being laid off amid "job skill obsolescence."
[How can he yap about "job skill obsolesence" without noting our glaring lack of training let alone continuous training built into the workplace?! Every economy will have this in 100 years and it clearly won't be us/US leading the way. And the market-oriented way to do this is to design the whole project around the incidence of overtime, as we do in Phase 2 and Phase 3 of the Timesizing program.]
That would mean there is less inflationary pressure that the central bank would choose to address [how regal - ed.] by raising interest rates even as the unemployment rate, at 4%, is close to its 30-year low of 3.9% reached in April.
[God Almighty, these morons keep parrotting their comforting little phrases like neaderthals hunched in a cave entrance, terrified to lift their eyes and see that "at 4%", unemployment is twice what we regarded as alarminingly high 50 years ago, and it's not counting the half of today's problem anyway, which would require it to expand its view to take in rising levels among the working poor, disabled, homeless and incarcerated. And the only reason the welfare category isn't rising is that we've defunded it and added these people to the other four categories.]
Mr. Greenspan's speech echoes some of the themes he has been addressing for more than a year: technological change is generating worker productivity gains that have helped take the economy to new levels.
[Remember the early 1990s when the Fed chairman was peddling the line that worker pay was proportionate to worker productivity? That hasn't been true since the beginning of the Industrial Revolution and the start of business cycles.]
In addition, he has identified labor force flexibility - the ability of American companies to fire workers without fear of significant legal or cultural disapproval.
["Identified" as what? - something missing here? Like the phrase, "as positive"? This is a definition, not of labor force flexibility but of pathetic labor force powerlessness and horrendous management arrogance. A real definition of labor force flexibility would have to include T-R-A-I-N-I-N-G as its centerpiece, and America doesn't train any more. American management, spoiled rotten by labor rendered desperate by technological displacement, routinely dismisses older employees as soon as they get remotely close to retirement (down to age 35 nowadays) and whines and lobbies for unlimited visas for cheap pretrained youngsters from India who will grasp at any American job and work 24/7 without a murmur. We better start planning the repeal of that "uncompetitive" Emancipation Proclamation.]
"Because our costs of dismissing workers are lower, the potential costs of hiring and the risks associated with expanding employment are less" than in Europe and Japan, Mr. Greenspan said.
[Yeah, but you have to have markets to justify hiring, and when you've dismissed so many workers, you've clobbered your own markets. Greenspan is still trying to peddle the expanding employment myth. The only employment that's expanding, outside the deflating Internet bubble, is McJobs with crummy pay and benefits. And that's not enough to buy all the stuff that our wonderful technology is allowing us to produce. We are "Brazilianizing" our economy. And if we think Japan and Europe are going to allow us to ruin them to maintain our "we're the greatest" conceit, we've got another "think" coming. Japan's already ruined anyway. And Europe is very leary about our "wonderful" ability to "fire workers without significant legal or cultural disapproval" and our lower costs of dismissing workers - because we're trying to pass off those costs onto them.]
Mr. Greenspan said he saw no sign that productivity gains were ending. It will take a recession, however, to prove how much recent gains reflect "endeavors on the part of our business community to stretch existing capital and labor resources in ways that are not sustainable over the longer run," he said.
[In other words, we're gonna hafta learn the hard way, yet again. With "brilliant" leaders like this, we should lose our membership card in the Club of Intelligent Lifeforms. Oh excuse us, did we say something to offend the true believers in Saint Greenspan?]
- [1 UPsizing - unspecified new jobs]
Wendy's planning Mexican expansion, Bloomberg via Boston Globe, E2.
[NYT picked this up 7/12 under "More Wendy's in Mexico", C6, from Dow Jones.]
...The third-largest US hamburger chain plans to open 100 restaurants in Mexico over the next decade under a partnership with Mexican and Venezuelan franchisees.... The first new restaurant will open this month. Dublin, Ohio-based Wendy's [International Inc.] operates about 145 Wendy's in Latin America and the Caribbean. There are 5,600 restaurants worldwide. Wendy's shares...'ve fallen 37% in the past year.
[This is good, but...
- the new jobs dribble in over the next 10 years while today's 6,000 Honeywell jobcuts are happening "over the next three or four quarters" (see 7/11/00 on downsizing pages).
- the new jobs are in Mexico, not here where Wendy's is making its money.
- the new jobs are quintessential "McJobs" - low-wage burger flipping.
- being in low-wage Mexico, the new McJobs are going to be really low-wage.]
- One education does not fit all - Obsessed with tests, we forget that jobs take varying skills, op ed by Robert Reich, NYT, A31.
[Bob does not quite come out and say it, but we need to quit obsessing about education altogether and start obsessing about
With software revisions changing every two months, we don't have time to try to keep separate facilities such as schools and community colleges updated. We need to modernize business by using the incidence of overtime to target, trigger, size, fund, and pace virtually continuous OJT. Timesizing does it in Phase 2 and Phase 3. And adjusts the overall amount of overtime-to-training&hiring conversion in Phase 4 by adjusting the workweek against under-employment.]
- preferably continuous training right in the workplace,
- preferably paid continuous training otherwise known as on-the-job training or OJT.
- More environmental input, by Joseph Kahn, NYT, C4.
The U.S. trade representative's office says it plans to listen more to environmentalists in the early stages of negotiating trade agreements. The office released new guidelines that invite environmental groups to identify potentially damaging side effects of international trade deals - like damage to forests or gaps in enforcement standards - before negotiations start and while they are in progress.
The Sierra Club and several other environmental groups...called the guidelines a positive step.
[Amen to that.]
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