Wednesday, January 25, 2012

Head Like a Hole

In today's NYTimes, Friedman goes all "Bad News Bear" on U.S. job prospects. He buttresses his argument with an approving quote from Sunday's Times Magazine on the superiority of the MadeInChina:
Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly-line overhaul. New screens began arriving at the [Chinese] plant near midnight. A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. ‘The speed and flexibility is breathtaking,’ the executive said. ‘There’s no American plant that can match that.’
As a commenter points out, The Guardian also has a new piece on the MadeInChina. It kicks off this way:
The man's hand is twisted into a claw, crushed, he says by a metal press at the Foxconn factory in Shenzhen, where Apple's luxury electronics are assembled. He is looking at an iPad – he has never seen one switched on. His mangled hand strokes the screen, bringing it to life.

Back at the factory, where the buildings are swathed in nets after 12 workers committed suicides in a single year, a young girl emerges from the gates. Her job is to clean the iPhone screens before they are packaged. She says she is 13.
And here's another bit from a recent NY Times article on Apple's Chinese labor:
Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions inside the Chengdu plant, according to a Chinese group that published that warning.

“If Apple was warned, and didn’t act, that’s reprehensible,” said Nicholas Ashford, a former chairman of the National Advisory Committee on Occupational Safety and Health, a group that advises the United States Labor Department. “But what’s morally repugnant in one country is accepted business practices in another, and companies take advantage of that.”
“Apple never cared about anything other than increasing product quality and decreasing production cost,” said Li Mingqi, who until April worked in management at Foxconn Technology, one of Apple’s most important manufacturing partners. Mr. Li, who is suing Foxconn over his dismissal, helped manage the Chengdu factory where the explosion occurred.

“Workers’ welfare has nothing to do with their interests,” he said.
Bottom line is one thing; perspective is everything. Puts me in mind of one of Reznor's Nine Inch Nails songs – as a lot of things do of late:
God money's not looking for the cure.
God money's not concerned about the sick among the pure.
God money let's go dancing on the backs of the bruised.
God money's not one to choose.
You know who you are.

Thursday, January 12, 2012

Pimping Our Huddled Masses

When a pimp turns out a new sex slave, the common practice is first to get their victim hooked on something powerfully addictive.  The next step usually involves saddling them with a mountain of debt at larcenous rates, sometimes just for the basic necessities of day-to-day living such as room and board, or the fraudulent arrangements by which they've managed to transport them from their familiar environment in the first place; but always for the addiction. Finally the pimp coerces the victim, with both misleading monetary inducements  and threats to themselves and their families, to demean themselves at the whims of men with sufficient financial means to pay a minimal sum for their services. And they do this for the duration of their victim's capacity to do the work. Years of fun for all involved—minus one. There's an analogy here if I could just get my finger on it...

The next year will be a critical one for both our country and the world. I don't think any of us can afford to be mere spectators during this next election. There are things that need saying clearly and forcefully, and we owe it to ourselves to try. Social welfare is an essential component in any sensible national survival kit. You can't call "home" a truly representative democracy without it. Yet even the laughable framework we've had in place here in the U.S. is gasping for breath in the current political arena. We're quickly becoming a nation of "have it alls" (a tiny fraction of a percent of us) and ''have nothings', where the former buys the legislation that keeps them having more, the middle class continues to slip through the cracks, and 15.1 percent (and growing) of America now huddles under the floorboards below poverty line. That's not the country I was born in. The legal framework that lets this happen has been hammered together with billions of dollars in political persuasion and a formidable army of well organized lobbyists and operatives over the past thirty years—and they've gotten amazing returns on that investment. If you can buy the privilege to swoop in whenever you like and jump the line, you can take home a lot of cake. But that's a nasty little game—some might even say uncivilized! So maybe it wants some talking about.

Politics turns out to be a very reliable transducer for the conversion of money into legislation. All too often, through the meretricious alliances it engenders, it despoils the soul in the process. Over the next few months, we need to both emphasize the purpose and necessity of smart progressive taxation in maintaining the polis (Nobel Prize-winning economist Peter Diamond and his colleage Emmanuel Saez currently argue for a top rate of 73%), and also to decisively counter the dangerous and virulently anti-tax kleptocrat narrative that has gained traction with the ascent of the extreme right-wing media Juggernaut. And of course, we'll have to draw attention to the hideously skewed economic baseline that results from the pollution of the political dialogue with money.

Executive pay is one interesting index of the absurdity of our spendthrift financial aristocracy that has gained mainstream media attention over the past few years—though perhaps the most interesting thing about this attention is that it has accomplished sweet fuck-all in terms of putting an end to that insanity. The pay-without-performance "compensation" packages that have become customary at the top are surreal even by the standards of obscene avarice. In 2007 Home Depot's CEO Bob Nardelli skated with $210 Million while HD's stock tanked. Stanley O'Neal famously peaced at Merril Lynch with "no severance pay" while his company was plummeting through the basement. Not so famously, he left with 161.5 million and an executive assistant, gratis, for the next three years. What more they could conceivably have stuffed into his vest upon departure in the name of "severance" is a question too ridiculous to contemplate. Countrywide's Angelo Mozilo split with $120 million in compensation and stock sales—and we know all about Countrywide financial. The list grows longer and loonier by the day.

So how does this nonsense even happen? Well, it depends on whom you ask—and whether they've done their homework. If you ask the Wall Street cognoscenti, you'll meet with the usual suffering shibboleths and duck-billed platitudes about the free market, about the right of shareholders to pay their royalty whatever they feel like paying them, or about the increasing value of the CEO in today's world and the increasingly competitive process for acquiring star performers. What you won't likely hear about (given that most of the "cognoscenti" know next-to-nothing about it) is the wildly imbalanced bidding wars where the execs hold all the high cards. Nor will you hear much about the perversely distorted system of corporate governance that lets CEOs ratchet up their own pay.

The financial system has been hacked from the inside, and it's hemorrhaging from thousands of massive holes—into the pockets of those who payed for the job. The tide has gone their way for decades now, and it will be a hard dynamic to shift. They've gotten used to getting-over; it's hard to get over getting used to getting-over.

Nearly all of us recognize that progressive taxation is the fairest way to ensure that the social contract remains intact. But how many of us noticed when Baby Bush knocked a hole in the capital gains tax that you could drive a tanker through—and that the beneficiaries of this largesse have been frantically shipping mountains of money through ever since. How many of us noticed the way the wealthy (and corporations like GE and Google) finesse the regulatory shell game to shift billions of dollars in profits offshore, presumably to await another "tax holiday" when they can sneak it home under the radar of public opinion—though even that is now an almost quaint idea: the U.S. is "home" to these entities only in the most abstract and strained sense of that word.

57% of Americans believe wealth should be more evenly distributed. Seven in ten Democrats think government should address this by increasing taxes on the wealthy. About the same percentage of Republicans think it shouldn't. The way government in general—and the issue of taxation in particular—has been increasingly framed over the past twenty years is surely a major factor. Taxation has been viciously demonized as oppressive and punitive, with little emphasis on what it gives back to the citizen. The remaining 43% could be forgiven for supposing that all of the government programs they take for granted (social security, medicare, financial aid for college, etc.) are simply a product of our God-given rights rather than the result of legislation that courageous lawmakers fought for tooth and nail against furious and well-funded opposition. The list of pejorative terms popular on the right for these programs, along with all of the rest of our anemic attempts to do right by our citizenry, could go on for several lines, but they could much more accurately and succinctly by described as "mildly giving a rosy rat's ass about your fellow human being." 

Opinions in the absence of relevant information are more an indication of who is winning the struggle to frame these issues than of how important the issues actually are, or what should be done to protect our investment in them. For example, there's plenty of compelling research on the devastating impact of extreme inequality on everything from mental health to violence to infant mortality. But few people have any real sense of how extreme the inequality actually is. A surprising percentage of poll respondents in the U.S. actually believe the middle class is growing. The percent of all people living in poverty has increased from 11.3% to 15.1% between 2000 and 2010. This is not a problem solves itself if we all sit on our hands and wait for the magic of markets save the day. Markets don't even work that way. The incentives markets operate under consist largely of variations on the theme of “return on investment,” not social stability or security in our twilight years—or any of the other indices of a healthy nation. For that conversation, we would need to begin a deep and persistent inquiry into, say, what benefits and advantages derive from various investments; to whom these advantages accrue; and how these benefits enhance or erode the fabric of a “free and just” society. Profit doesn't care.  That's our job.

Former Texas Senator Phil Gramm, champion of deregulation and lobbyist for Swiss Bank USB, can rhapsodize all he likes about Wall Street as a “holy place” while the middle class is sacrificed before the Sacred Bull, but only because he knows who butters his toast. He dares not utter the name of his True God in polite company. The founder of the religion to which Gramm's adopted party pays lip service had his own ideas about people messing about with money in a “holy place.” The phrase “den of thieves” derives its origin from that narrative. It's right there in the New Testament—four times: in all three synoptic Gospels, as well as the book of John. I suppose it could be important. Jesus is also reported to have said things like "it is easier for a camel to pass through the eye of a needle, than for a rich man to enter into the kingdom of God." And "Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me." Apparently, God only knows what that means. Somehow it never seemed dreadfully ambiguous to me, but there must be a loophole somewhere, what with all of these God-bothering fuckwits in our political system soaking the "chosen" for their last thin dime while they legislate against the interests and trust of these goodly people—and sleep like babes at night with women other than their wives.

Of course Rand Paul would have you believe there's "no such thing as the rich." Indeed, those we call "the rich" and "the poor" have ever so much in common: lo, they're both carbon-based, they both breathe oxygen, and they're all well over six inches tall! As usual, the venal tools of our oily overclass equivocate most on matters of degree (as in "order of magnitude") when degree matters most of all.

Newsflash: the percentage of even middle income families in Cali just dipped below fifty—that's down from over 60% in 1980. Income in the poorest families—who can least afford the hit—dropped more than 21% since just 2007.

In fact, 146.4 million Americans—a full 48% of us—are now "Low Income" (defined as people earning between 100% and 199% of poverty level) or below—up four million from 2009. Sadly, those with the most thoughtful ideas are seldom the ones most motivated to whip up catchy slogans. "We are the 99%" may be a step in the right direction (and I'm not complaining abouut that), but where's their plan? I think they're helpful in drawing broader attention to the problem, but what we need are jobs, jobs, jobs to make up the terrible gap in our basic coverage of necessities for a huge and growing number of Americans.

We need dramatically increased spending on infrastructure (which is circling the drain all over the country); we need massive new educational investment and increased investment in science and technology; we need tax incentives that reward *actual* job creation, especially for small businesses, rather than mere tax breaks for a demographic lazily labeled "job creators" by their hardly-disinterested mouthpieces. We need dramatically higher tax rates on the highest incomes. We need to deny the ilk of the laughable Laffer all access to the halls of power unless they're carrying a mop or a broom (thank you Charles Pierce). We can't fight our way out of this slump by squeezing government spending and crushing the slumpin' proletariat indiscriminately. It's about Keynesian multipliers. They work. And when the private sector can't—or won't—do that spending, the public sector needs to step in and pick up the slack. If we want growth in the near term, we're going to have to increase internal demand, and that means jobs, not deficit reduction, must be our first priority. Not a single economist in my acquaintance at Treasury, the Fed, or the IMF disagrees on this point.

The number of Americans living in poverty is simply mind-boggling for a country that pretends to any measure of decency. The percentage dipped respectably during the Clinton administration after a fairly long and persistent climb. For this we should set aside a little love for Pappy Bush, for having the courage, after a smart peep at the numbers, to break his "No New Taxes" promise—to the eternal consternation of his party purists. But the figure has been rising ever since.

For the celestially well-to-do, it's been a different game. They've been steadily hauled up by their Burberry hats past the tippy-top of Jack's magic beanstock. Nowadays, most of the country couldn't see these people's bottom lines on a clear day, with a pair of astronomy binoculars and a neck ache.

Of course it's just plain goofy to hate somebody merely because they happen to be rich. But it's just as pathetic to heap scorn and derision on the less well-off simply because they correctly point out that their government—and consequently their economy—is rigged to keep them there. If you massacred every one of the poor tonight and quietly buried them away from polite society, there would only be more of them in a year. The legal and regulatory framework that girds (or ungirds, really) our current flavor of capitalism produces them in droves. It's not a bug, it's a feature. It has always been thus to some extent, but never, ever to this degree.

Now that reasoned critique has been rebranded as class warfare, optimism for the near term is a little naive. Even with the best of outcomes next November, we're still in for a bone-jarring ride. Why is it so hard for those at the helm to see America as family, rather than as marks in some sordid con? The impact of big money on policy is a matter of public record, and it is not a pretty one. When you can effectively buy the passage or blockage of legislation, then good government merely means "good for you."

But the structure and functioning of our political system has also evolved to make it even more resistant to change—e.g. just note the way the use of the filibuster has risen over the past couple of decades. This means that policy can no longer keep pace with economic exigencies, creating what Walter Lippmann called "drift," which militates in favor of the status quo and exacerbates existing inequality. (See Lippmann's flawed but seminal volume "Drift and Mastery," an influential attempt to get to grips with similar unrest in this country back in 1914.) Also note that if one party chooses not to play the filibuster game—say, in the interest of fair play or good faith—this creates a ratchet effect in the direction of the policies of the side that does use this stifling tool. So: polarization and impasse—or "the Divided States of America."

We need to get the word out. What we are up against is organized money, and what that money buys them is a lot of noise—noise that conflates sentimentality with compassion, and rationalization with reason. Organized money is remarkably proficient in using institutionalized irrationality to sway vast armies of religious fundamentalists—no one is more susceptible to simplistic zealotry and sophistry than people whose minds are so peculiarly constituted as to both expect and enjoy its deployment. I hasten to add that these are often very decent people; they are not to be scorned for being they way they are. The distinctive modes of mass delusion and specious reasoning to which they are accustomed are the product of very sophisticated and pernicious memeplexes that have been evolving resistance to rational scrutiny for hundreds—and sometimes thousands—of years. These modes of non-thinking are baked into the wetware from a very early age, and nothing will ever shift them once those habits of mind have annealed in that configuration.

But there's hope for the rest of us—the young and the passionately curious of all ages and stripes. And here's the bottom line: there are more of us than there are of them, and we know something. We know that social justice isn't just a good idea; it's also the smart money strategy for sustainability in complex iterated games—particularly where the relevant agents are these "human being" thingies. That means we also know that if they win, everybody loses; that species survival may well depend on the triumph of curiosity over dogma, and of empathy over narcissism. Perhaps most importantly, we know that the only hell we need fear is the one we build for ourselves, or allow to be constructed in our name.

So let's get to fucking work. There's simply too much lo lose to justify passivity.