----
Thursday, September 24, 2015
VW's diesel scandal and Shkreli's drug price-gouging
----
Thursday, November 27, 2014
Happy Thanksgiving and happy Buy Nothing Day
It's not just retailers, but also the public services, entertainment, food, and convenience industries. If workers must/choose to work (i.e. we need some gas stations and hospitals open), they should get OT/bonus pay. SD is trying to enact a law that would require 2X pay during TG and Xmas - not sure how it will pan out and there is no federal bill of course. Retailers may claim that they are just responding to customer demand; maybe so but that is also what a drug dealer would say. Sure, no one is expecting us to spend 24-7 with our families without going crazy, but there are other things to do besides consuming with the herd: enjoy the outdoors, catch up on chores/studies/sleep, volunteer at a kitchen, etc.
It's all especially sad/ironic because TG/Xmas are holidays where we are supposed to be good to each other and reflect on our blessings (usually blessings that can't be bought in a mall). Do we still have or remember what people gave us 3 years ago? We are the best shoppers for ourselves anyway. Holiday gifts are not that important, so why do we continue to stress and waste effort over gift buying year after year? Unless it's a Lexus with a big red bow on it (who actually does that?), or you need to impress someone with a gift, what's the point? And even still, if you need to give gifts to make someone like/accept/remember you, then maybe that relationship isn't meant to be. There are plenty of other ways to express your feelings, and the most precious gifts can't be bought anyway (sharing special moments together). Many Americans' homes are overflowing with stuff already; why not celebrate Buy Nothing Day instead?
Not sure if it's just a few stores or company-wide, but struggling chain Kmart, as well as Wal-mart, are mandating that its staff work on TG (no time off requests will be honored). I guess those mgmt teams think their workers should be thankful to even have crappy minimum-wage retail jobs.
Here is a list of retailers that will be open and closed on Turkey Day:
http://www.ijreview.com/2014/
Sunday, March 2, 2014
Recent perspectives on income and the wealth gap
Bill Maher: the super rich have an oversized egotistical victim complex. Libertarians and conservatives can cut the crap, because most of the founding fathers commented that concentrated wealth is a danger to democracy (and back then the existence of a billionaire capitalist was less plausible than the Fountain of Youth).
A caller on KQED: debating the minimum wage is a straw man until America implements more humane labor practices and expectations. Otherwise we're not much different than Tsarist Russia.
Monday, September 27, 2010
FDR's "economic bill of rights" that is so needed today
One fact I didn't know was that a year before FDR died, and right in the middle of the biggest political issue of all time (not Lewinsky-gate, but WWII), he proposed a second or "Economic bill of rights" to help guarantee a better quality of life for all Americans. He wanted to do this because the first Bill focused on our political rights, and FDR felt that equal and fair access should be linked to the pursuit of happiness (otherwise what's the point?). FDR came from privilege but saw how greed from the rich sunk the market and crippled many of honest families during the Depression, and wanted to lay the foundation for a better future for Americans. Frankly, I find it utterly negligent and immoral that my public high school did not teach this, and I hope your schools were better. But then again, social sciences textbooks are produced by large companies that could stand to lose if an economic bill of rights were ever supported and enacted by the people.
Part of FDR's 1944 State of the Union speech went:
It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.
This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.
As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.
We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.”[2] People who are hungry and out of a job are the stuff of which dictatorships are made.
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.
For unless there is security here at home there cannot be lasting peace in the world.
http://en.wikipedia.org/wiki/Second_Bill_of_Rights
Unfortunately, FDR was quite ahead of his time. "Unless there is security here at home, there cannot be lasting peace in the world." Why do so many young, poor Americans "volunteer" for our armed forces or defense contractors? Some due to patriotism, but others due to material need and lack of gainful employment at home. Why did we go to war in Iraq? Partly because we don't have trade and energy security for our economy at home.
"Individual freedom cannot exist without economic security." How many of us are "slaves" to our jobs, and just put up with more and more abuse and loss of rights/benefits/dignity because we have no choice, and people count on us to make ends meet? How many of us are enslaved by the ridiculous cost of living in many metro US locations, the ridiculously complicated paperwork associated with taxation, finance, property, family, and other legal issues (that is way worse than any other G20 nation), and the ridiculous cycle of what economist Thorstein Veblen first coined "conspicuous consumption," because we think buying all that stuff will make our lives better, and make us look cooler and more successful to our peers (when they actually just steal our time, money, and even health)? What kind of "labor market" do we have when people don't pursue their dreams and innate talents because of material considerations (I can't believe that the best and brightest of us choose to work in finance, software, and cosmetic surgery because they truly love it more than other fields of letters and arts with more tangible social benefits)? What is the difference if a Marxist Leninist state tells you what job you will have, or the market? It's not really your choice either way unless you're independently wealthy, really lucky, or a standout with some desired skill set. How many of us or people we know stay at a bad job just for the medical coverage, or because they're worried they will run out of money during retirement? When we're economically desperate (or some may call it economically rational), we will endorse many harmful political and social practices. Our efforts to "maximize personal profit" may end up hurting us, and it happens every day.
Look at the list of rights: a useful and remunerative job that pays enough to provide and even have a little fun, a fair market with decent returns and competition, adequate housing, medical care, retirement, education, and disaster insurance. He's not asking for the moon here, but these days it seems like it. There isn't even a right for workers to unionize or represent themselves on the board. There's nothing that says everyone is entitled to a McMansion, SUV, and tropical time-share. What's ironic is that the idealists in our government who were inspired by FDR went out to the ravaged nations in Europe and Asia through the Marshall Plan, and helped create constitutions and societies that did uphold these rights that never materialized in FDR's country, rights that the business community equates to socialism and evil. Yes those other countries are no paradises (well, maybe Sweden would be if it had San Diego weather) and have their share of economic problems. Their social safety nets are fraying under the pressures of rising costs and aging populations, Japan had its own housing bubble and decade-long recession, and Europeans engaged in risky financial speculation and over-leveraging. Actually they only when wrong when they decided to act like Americans. At least they did what they could to create reasonably equitable societies (the rich-poor gap in Japan is the smallest in the world, while free market Mexico and Brazil have some of the highest), and presided over at least two generations of very happy, healthy, peaceful, productive, and well educated people. Think about how their policies helped prevent millions of people from going hungry, getting sick, and going to jail unnecessarily, while the numbers of those in America have soared since WWII despite our superior wealth.
When considering the cases of those nations (of course FDR had no way of predicting how the world would be in 2010), critics may say that we couldn't afford the economic bill of rights and it would be a government-run disaster of a social experiment. Inefficient markets due to government price controls and mandates always cause other problems, like the New York City rental market or gas rationing during the OPEC embargo. But who really knows, since we didn't give it an honest try. Imagine if all the wealth that was concentrated on Wall Street and among the richest 1% of us since WWII was instead used to make social services better and more efficient, or even make companies and communities more sustainable. Imagine if all the big brains behind Enron and mortgage-backed securities instead used their talents to improve society for all. It's a positive cycle that then raises the overall productivity, health, happiness, and wealth of a society. We'd waste less money on prisons, wars, pharmaceuticals, and frivolous products, which would give us more spending power for life essentials, and might even drive down the market price for the super-expensive things that we struggle with today (housing, education, health, elderly care). A "socially responsible" free market could have worked.
Before you write me off as an anti-consumerist socialist, I do want to say that I endorse the economic principle that efficient markets do create wealth and give everyone a "bigger share of pie". The problem is that the rich get most of the pie gains, so what's the point for the rest of us? As Moore said in his film, and maybe we have postulated over email too, those of us in the non-rich masses tolerate and even support this innately unjust market system because we hope that one day we will join the likes of the rich. It's like wasting one's pocket change at a slot machine because someone's gotta get a jackpot eventually, right? Except this time it's your life, your life savings, and no do-over. But what if you don't make it to the promised land (and don't get a federal bailout when you fail)? You would have endorsed a system that has brought you and millions like you unnecessary hardships just so a lucky, smart, or cheating few can profit immensely. If we had a choice between a reasonably socially secure life without the possibility of being rich or poor, or the free market where one can soar high or crash and burn (and be required to pay for everything out of pocket), would you be willing to pull the slot machine lever? And even if you do manage to make it big, is it still justified to gain at so many others' expense? Most major religions say no, and in fact they say the greedy and rich are cursed to hell.
The free market works better if people are more responsible with their profit motives, and don't take more than they reasonably need. But how the hell do you enforce that in a democracy? The incentive principle states that people tend to make decisions that will benefit them, so hopefully the wealthy will feel more personal benefit from philanthropy than making that one extra million (to add to their already immense net worth) from a Ponzi scheme. If a big investor owns X million shares of company Y, which had a good year, why not forgo dividends so that the company can pay its people better and offer its products for less? The stock already went up, you don't need the extra money, and your contribution will position the company to do even better in the future. Generosity, or even common sense, pays too and maybe better than greed. A good rancher keeps his milk cow healthy and doesn't slaughter her for meat. Goldman Sachs and George Soros types are the latter, speculators who contribute to and profit from market volatility that brought immeasurable panic and even suicides to honest investors and pensioners. There's no economic safeguard or equilibrating force to prevent the super rich from getting more and not sharing, which hurts everyone unless the pie is growing at a crazy pace (which we all know can't last). I guess the government used to step in and "spread the wealth around." The top tax bracket was 90% under JFK (when America had fewer super-rich), but today it is half that and capital gains/dividend taxes are obscenely low (the rich get much more money from investments than wages) as part of the Bush tax cuts that may expire soon. A society is not sustainable if the super rich profit without giving a "fair share" back, which also contributes to massive government debt (in both good and lean times it seems) which hurts everyone. Even conservative free marketeer Alan Greenspan, who helped us into this recession as chairman of the Fed, came out against extending the Bush cuts for that reason: http://www.pbs.org/newshour/bb/business/july-dec10/greenspan_09-24.html.
Other shocking points from the movie:
1) Remember the Continental Express plane crash near Buffalo, NY a while back? Apparently right before the crash (which was attributed to weather and pilot error), the 2 pilots were complaining about their wages, which was a paltry $16,000 for the co-pilot Rebecca Shaw and not much more for the lead pilot. Moore interviewed some pilots who said they needed to take 2nd jobs or food stamps to get by, despite having a college degree and pilot's license that cost about $100K in student fees. This doesn't really apply to the subset of big-time pilots flying 747s on major routes, but why would lower pilots accept this horrible situation? They are cursed to love what they do, and airlines exploit this. Post 9/11 airlines need to cut costs to please Wall Street (even Southwest recently had a losing quarter), so they over-work and under-pay pilots, despite being unionized and even though those human beings are the only thing standing between hundreds of people getting to where they need to go safely, or dying a fiery death. Wages have been slashed and pensions are gone, but airline execs are living well. Are you ok with your pilot exhausted and stressed out about his or her personal finances? Imagine what other ways airlines are cutting safety or barely meeting FAA minimums. Even Miracle on the Hudson pilot Sully Sullenberger testified before Congress about this problem, but to deaf ears (and Congressmen take at least 50 plane trips a year!). If this is the magic of the market, I don't want any of it.
http://www.allheadlinenews.com/articles/7015139878
2) Companies take out "dead peasants" life insurance policies on some workers in order to make a little extra cash on the side, which they don't share with the deceased's family. Young workers are especially lucrative because they have so much future earning power and the chances of death are low, but for big firms like Wal-mart or AMEX, they have enough staff to try. They probably have actuaries crunching HR demographics data to select the subset of workers with the most profit potential. Companies are not required to disclose any of this, and it is perfectly legal, but lawyers and the media have found out through leaks and erroneous mailings to next of kin. It's just an example of how the profit motive has been terribly twisted into something that most of us would hopefully find very offensive. A worker may be worth more to a company dead than alive. I'm not saying that companies actively try to help their insured workers die, but if they stand to gain from death, do they have a subtle economic incentive to not really take care of the welfare and personal needs of that worker? Maybe over-work them and cut health benefits? And it's not like companies need to insure themselves against losing most workers (apart from rare critical personnel like Steve Jobs types) like a breadwinner insures his or her death for the family. Most companies are set up to have interchangeable parts and redundancies, so losing a worker now and then won't cripple the business. Co-workers cover until HR can hire a substitute, so it's all really just a side-bet to make more cash.
http://deadpeasantinsurance.com/
There are dozens of companies listed on the site, so see if your employer is among them! And remember that these are only the firms that got exposed.
----------
A recent NPR story about this topic, and more specifically an alternative to the corporate business model:
http://www.npr.org/templates/story/story.php?storyId=130197557
You are probably familiar with the Maglite heavy flashlights that police officers use, and their smaller versions for civilians. Those products are made by Mag Instruments, a decades-old private company of 700 employees located in Ontario, CA. The company founder and leader, Anthony Maglica, is over 70, hasn't taken a vacation since the 1990's, and wears a shop floor uniform to work. He grew up in the US during the Depression, and unfortunately his family moved from the frying pan into the fire, and he grew up hungry in WWII-ravaged Croatia. Maybe these early experiences formed his business priorities, such as customer and employee treatment over profits. While most small consumer goods are manufactured overseas for cost savings, Maglites have remained domestic, and the company has even internalized more parts fabrication to reduce supplier costs. Maglica has also kept the retail costs of his products the same as they were in the 1970's, which he achieved through automation and a general lack of desire for profit taking. Sure he could make more money by going overseas, but he doesn't feel the need (as in, do those rich bastards really NEED that 10th car and 20,000 sq. ft. home?). Things are not perfect, as Mag posted an $11M loss last year, and had to lay off 200 workers (I believe the first layoff in the company's history). Maglica said it was the worst day of his life when he issued the pink slips. Of course this model may not work for larger public corporations, but maybe it really depends on the conscience of the company's leader.
Monday, May 26, 2008
Business news

Would you take a loan out on your IRS refund?
http://seattletimes.nwsource.com/html/businesstechnology/2003534092_stupidinvestment21.html
Apparently enough people are doing it to cause concern for the government and consumer advocacy groups. Early filers with tax preparers take out "refund-anticipated loans" on their future tax refunds because they are desperate for the cash pronto and can't wait for Uncle Sam. H&R Block and others offer very high-interest loans on money that doesn't even belong to them. This encourages accountants to over-estimate the refunds to taxpayers, so that they can take out larger loans from the company. That worries the IRS of course, which doesn't want to get short-changed. Consumer advocacy groups are also crying foul, as this new predatory practice is similar to sub-prime mortgages and pay day loans. In our free market, you can even use your tax refund to get yourself more in debt!
Intel pulls out of One Laptop Per Child (OLPC)
http://news.yahoo.com/s/ap/20080104/ap_on_hi_te/intel_one_laptop_per_child
Some altruism. The chief corporate sponsor behind OLPC (or the $100 laptop project) has decided to bail out over disagreements on the sister product version which Intel will market independently. The "XO" devices currently cost about $188-250 to make, but it was hoped to sell at the $100/unit level if foreign governments bought enough of them (on the scale of millions of units - good luck!). Intel might have felt snubbed because the program management favored a cheaper processor from rival AMD. Intel is trying to market its own version of the cheap laptop called the "Classmate". They claim that it's good for customers to have some choice in the cheap PC market. Meaning they don't want AMD to enjoy all the spoils.
http://www.un.org/ecosocdev/geninfo/afrec/vol14no2/educat.htm
To me, the whole program is commendable but misguided. If we gave the XO laptops (or even used computers) away for FREE to poor children, who may not even know how to read/type or have access to reliable electricity, that is one thing. But expecting impoverished, debt-ridden governments to fork over $100-200 per computer is shameful, when they are plagued by corruption and have many other national priorities languishing due to tiny budgets. Primary education spending in Sub-Saharan Africa is around 3-4% GDP, so how can they afford computers? America spends over 6% GNP according to the CATO Institute; we're the richest nation and many of our schoolchildren lack modern computers or even books! Some NGOs are only asking for $20 donations to support a Kenyan student for a year ( http://www.onehereonethere.org/about/howitworks/ ). That's books, pencils, and maybe assistance to teachers or classroom improvements. If you've ever seen or read about a typical rural Third World school, you know they need a lot of other stuff more critically than they do laptops. Look at what else $100 could buy for poor nations:
76 units of Viread anti-HIV/AIDS medication (at $1.30/dose)
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/04/04/BU301031.DTL
22 insecticide-treated bed nets, good for 5 years, that greatly reduce the risk of malaria ($4.50/each)
http://www.anglicanmalariaproject.org/in_depth.html
100 second-hand eyeglasses (at $1/each)
By the way, malaria and AIDS are both top 5 killers in the Third World, and international organizations estimate they cost poor nations over $10B in medical expenses, containment, and lost productivity. The WHO estimates that a billion people who need corrective lenses are lacking them.
Actually getting kids to school is already a challenge, since poor families may prefer to keep their children at home for labor, and many nations don't have enough teachers, classrooms, and supplies for all the kids who want to learn. I know Professor Negroponte at MIT and the OLPC project mean well, but the involvement of Intel or other big-money corporations suggests that this may also be a strategy merely to create more computer customers in an untapped market. These kids will get exposure to PCs at an earlier age, and will want to be "plugged in" for the rest of their lives, like Western kids. And computers are boring by themselves, so they will want to buy software, peripherals, iTunes, and better computers down the road, if they can afford them. Some families don't even make $100 a year. Yes they will get a better education, learn marketable skills and computer literacy to be more competitive in the global economy, but remember there are very few white-collar, computer-based jobs in the Third World. If all of them immigrate to rich nations to study, work, and consume, then Africa will be even more brain-drained and worse off!
Gotcha Capitalism
http://www.npr.org/templates/story/story.php?storyId=17898418
Inside the world of all the hidden or subtle fees/surcharges/etc. that utility, banking, or other companies levy on the US consumer (on average about $1,000/year).

