11/24 Record day of mergers tops $42b, by Dylan Ratigan, Bos Globe, C13.
...including a record 10 that each exceeded $1 billion... shattered a three-month lull in takeovers...biggest day for mergers since British Petroleum Co. said in August it would buy Amoco Corp. for $53.9 billion..\.. Some $2.1 trillion in mergers has been announced worldwide this year, obliterating last year's record $1.6 trillion with more than a month left in the year..\..
More than 22 companies agreed, or said they were in talks, to merge. The largest stock purchase was Tyco International Ltd.'s $11.3 billion takeover of AMP Inc. Others in talks include America Online Inc. and Netscape Communications Corp., for a merger worth about $4 billion in stock, and Deutsche Bank AG, which offered $8.9 billion cash for Bankers Trust Corp.... Mergers ground to a halt after Russia's default in August shook investors' confidence. Three Federal Reserve interest rate cuts restored their faith.
"Stabilization in the markets has made it possible to get some of these transactions out," said Frank Aquila, a...merger lawyer at Sullivan & Cromwell.
[Stay tuned for more instability then, Frank, because these mergers are a major destabilizing factor when they are followed by layoffs.]
"When the financial markets were unpredictable, the deal flow slowed down..."
[If you think they're predictable now, Frank, I've got a bridge to sell ya. We realize that predictability is a big requirement for business, but businessmen sure have a strange way of enhancing it - by throwing consumers out of their jobs. And Frank, you don't really mean predicitability anyway, you mean growth. And you can't grow by shrinking (see Downsizing 11/29 "You can't shrink your way into profitability"].
"...but the forces that were driving the transactions didn't go away."
[That's right, Frank. And buy merging and downsizing, not only have CEOs made their companies more efficient, - they've made their markets more efficient - i.e., smaller. How do you get efficient without clobbering your own markets? By downsizing, not your work force, but own work week - in other words, by timesizing. There's really no alternative.
You're all scrambling to sell more and more stuff to fewer and fewer people as the wealth concentrates tighter and tighter. You figure it out - and bear in mind that our traditional and historic resolution of this Catch 22 has been ... war. War is great at getting rid of all those extra "inefficient" people. Trouble is, with nuclear toys, it's awfully hard not to snuff a few CEOs in the process.]
Merger bankers are predicting that in 1999, activity will be led by energy, utility, and computer-technology companies. They'll probably surpass financial services and telecommunications companies, the biggest this year, as the race to dominate their markets intensifies [or even just to stay in the same place as markets diminish].
If you think mergers and acquisitions (M&As) are nothing significant or maybe even good news as in "we're just getting more efficient and shaking out the dead wood, click here for a glimpse at M&As (mergers and acquisitions) in the 1920s....
11/24 Gluts threaten global economy - Overcapacity likely will sink prices, profits - and stocks, by Robert J. Samuelson, Bos Globe, C4.
["General gluts" is what Malthus originally called depressions two centuries ago. Ref...Heilbroner, Worldly Philosophers, 5th Ed, p.97.]
11/22/98 Just a Bump in Capitalism's Long Road, by Richard Stevenson, NYT, s.3, p.4.
This does not seem to be free enterprise's finest hour.... So it seemed fair recently to ask Milton Friedman, the iconic advocate of free markets, if the free-enterprise system had not proved inadequate in an era of linked financial systems and contagion by microchip. His reply: The problems in most countries are a result of bad policy at home and bad advice from the IMF, not any failure of the markets.... "Everybody now believes in competition, believes in freedom [believes in homelessness? believes in prisons?], believes that governments should have a relatively minor role...."
[Much as we love Milton and his many great quotes, he seems never to have thought of the possibility that if government should have a minor role, maybe that role has to be not in prison construction but in something absolutely central, and very, very well-designed. Our approach is to solve the Chesterton pan-utopian flaw, from which even Milton's ideas suffer, by defining fair share in the employment area at this point in "capitalism's long road," doing it dynamically, homeostatically, and doing it as a range share (not a point share) with the bottom of the range determined by regular public referendum, the top determined by the bottom, and the top designed as a permeable threshold instead of a cast iron barrier. This is what we're calling timesizing and it's phase-in structure can be repeated as necessary in a sequence of further areas as the centuries roll by.]
11/21 Jobless rate holds at 3.3% in Mass. [how many prison inmates does that exclude?] -
Total employment near record in Oct. [how many immigrants and "McJobs" does that include?], by Kimberley Blanton, Boston Globe, p.1.
...In October...an extremely low unemployment rate of 3.3% helped encourage more people to enter the work force.
[Now Kimberley, setting aside the fact that any unemployment rate over 2% was seen as extremely HIGH during World War II (= the last time we had a labor "shortage" intense enough to elecit pervasive on-the-job training programs purely by market forces), why would anyone think that a low unemployment rate would "encourage more people to enter the work force"? - maybe if wages went up and on-the-job training rose, but that's not what you said.]
"If you parachuted another 10,000 or 20,000 people into Massachusetts with skills, they'd be employed almost before they hit the ground," said Nicholas Perna, chief economist at Fleet Financial Group.
[OK, Nicholas, here's a question for you - how many thousands of people would you have to airlift OUT of Massachusetts before employers here would quit whining to government about lack of skills and set up on-the-job training to take care of it themselves?]
"[As for?] the slowing in Massachusetts' economy - it's not simply running out of steam, it's running out of labor. But these numbers still paint a picture of a very healthy economy," Perna said....
[If Massachusetts is "running out of labor," Nicholas, how about tapping our huge welfare, homeless, disabled, and prison populations? How about tapping the 17% of us over 50 who are unemployed in high tech? How about the hordes of us who've been forced into part time and "self-employment"?
[If this is a "very healthy economy," Nicholas, you've got very low standards. Take off your blinders and open your eyes. "Very healthy economy" indeed - but then, you're just their cheerleader, aren't you, Nicholas, and you don't want to threaten the inflow of money into Fleet Financial Group, your employer. This kind of skewed feedback loop is exactly how markets crash, economies collapse, and wars begin. The intelligent alternative is massive daily and weekly reinvestment in our own markets (that is, in on-site hiring and if needed, training), triggered by overtime - à la Timesizing.]
11/20 Firm mulls annual fee for users, Reuters via Bos Globe, p. D4.
WASHINGTON - An internal Microsoft Corp. memo released at its antitrust trial yesterday showed the software giant is considering charging personal computer users an annual fee to use its Windows operating system starting in 2001. Joachim Kempin, Microsoft's senior vice president for sales to personal computer makers, suggested an "annuity" paid by personal computer owners.... The federal government and 20 states have charged Microsoft with illegally maintaining its monopoly in operating systems....
[There they go again! Just as in ATM fees and credit card late fees and directory assistance and bottle&can recycling and gas station selfserve...! The more technology, the less service and the more fees. We have gone off track at such a fundamental level that technological "advances" are actually hurting us as much as they're helping us, maybe more. We should all be living in heaven with all this astonishing technology but instead, we stay awake nights thinking up ways to force those among us that still have money to give us annuities, and despite our happytalk, that number must be shrinking because - the secret to our "low unemployment"? - we've now got the world's second largest prison population. Only only our former enemy, Russia, how has a larger one. We have turned into our own worst enemy!]
11/20/98 Mistake acknowledged - Federal Reserve policy makers decided in an Oct. 15 conference call they didn't cut interest rates enough two weeks earlier, Bos Globe headline synopsis, D1.
...Greenspan's move was the first interest rate change between official policy meetings in more than four years (D3).
[Hear that folks? - the Pope is not infallible - and it's not the first time. Fallibility without accountability. Isn't that what started the American Revolution - some problem with "taxation without representation" or more generally, pain without input? In the Timesizing program's second module (Public-sector Stage), we recommend starting by prying a rate-setting function away from the Federal Reserve and putting it to regular public referendum. As long as these things are going to be decided by "throwing darts," let's get everyone in on the fun. It's the American way.]
11/18 Fed again cuts key short-term rate - Move could lessen potential credit crunch for firms; consumers likely to see lower rates as holidays loom, by Aaron Zitner, Bos Globe, D1.
...third time in seven weeks.... [cuts the] federal funds rate, which banks charge each other on overnight loans, to 4.75%, down a quarter-point....
[The Fed is gettin' desperate. "Fine," says Mr. Timesizing, "Exhaust all your conventional remedies except war. Do whatever it takes to prove to yourselves that you're stumped. Then come to me."]
Events like the Russian economic meltdown and the collapse of a major US hedge fund scared investors away from all but the safest investments - even from high-quality US corporate bonds. As investors poured money into safe Treasury bonds, businesses found they had to pay ever-higher rates to induce investors to buy their bonds, making it expensive to raise capital [to expand].... Said Greg Jones, chief economist for Briefing.com, an economic analysis firm, "The market as a whole sees slower growth ahead and thinks that corporations will default in greater numbers. So they're demanding a higher yield on bonds."
[This is a typical condition when labor "as a whole" is in oversupply and has little bargaining power "as a whole" to keep wages "as a whole" up with technology-borne productivity gains "as a whole." Result? Wealth concentrates among the wealthy and - the more concentration "as a whole," the less circulation "as a whole." Spending "as a whole" cannot absorb productivity "as a whole" so "corporations will default in greater numbers" and eventually there's nothing safe to invest in except US Treasury bonds (or the inner springs of your mattress.) Timesizing solves this by automating massive daily and weekly reinvestment initially using the length of the standard workday and workweek as reinvestment triggers and the person-packaged skills that are in demand longer than that as reinvestment targetters. The length of the standard workday (8 hrs) and workweek (40 hrs) become ARTs - "automatic reinvestment thresholds" - to plow back appropriate levels of capital into our own consumer base (via on-the-job training and hiring), and if reinvestment above the standard 40-hour level does not yield enough job-packaged earnings to sustainably grow our own consumer base, we resume our century-and-a-half history of adjusting the workday and workweek downwards.]
"Despite the fact that the Fed has been easing rates, interest rates for some businesses are still higher than they were a year ago," said Nicholas Perna, chief economist at Fleet Financial Group Inc.... Cynthia Latta, principal US economist at Standard & Poor's DRI in Lexington...[warned that] consumers don't need more encouragement to borrow. They're in over their heads now."
[Latta has missed the point. The reason consumers are in over their heads is their wages are way out of sync with their productivity and expectations. Plus they're trying to compensate themselves for sacrificing the best hours of their lives and getting pathetic little for it. Many of them are working 50-60-70 hrs/wk - levels that haven't been seen since the last century so they don't even have time to shop - and if they're on salary they're not even getting paid for it! Our short-sighted business analysts go on and on reporting about trivia, oblivious to the fact that even to maintain their own markets today, they MUST cut hours, cut the pervasive labor glut, raise wages by market forces, and save their own markets "as a whole." The low "unemployment rate" is completely missing the problem. And spoiled employers who have raised qualifications for job applicants beyond belief need to consider the last period when we had a real labor shortage "as a whole" - World War II - when any unemployment over 2% was a crisis.]
11/18 Mass. firms' exports dip 1.1% in 2d quarter - Global crises, 'Digital factor' blamed, by Kimberly Blanton, Bos Globe, D5.
...It was the second consecutive quarter of lower exports caused by crises in the world's emerging economies. The Alliance for the Commonwealth, a business trade group, reported yesterday that businesses in the state expported goods valued at $4.197b in 2Q98. That is $48m or 1.1% less than they exported in Q1, and $180m or 4.1% below levels in 2Q97.... Since February, Mass. manufacturers have reduced employment by 8,400 jobs. That is the biggest job loss in manufacturing in such a short period since 1993 [when the state lost 8,900 jobs between May and December]....
Much of the decline in exports to Canada, the state's largest export market, is apparently due to one identifiable factor: Compaq Corp.'s acquisition of Digital Equipment Corp. Changes made by Compaq after the takeover included reduced shipments from Digital's plant in Hudson to a plant in Canada....
11/17 US industrial output reported [0.1%] slower in Oct. - Cooler weather, Asian crisis blamed [and how about shrinking wages?!], Reuters via Bos Globe, C3.
The nation's mines, factories, and utilities ran at 80.6% of their maximum capacity, lowest since 80.2% in Sept. 1992.
[Keep concentrating wealth and we'll go slower and slower - the more concentration, the less circulation.]
11/17 Franklin Resources [6th biggest] tops US funds in redemptions, Bloomberg, Bos Globe, C2.
Almost $4.37 billion [2.5% of its total $172.7b] was pulled from Franklin's stock and bond funds during the three-month period ended Sept. 30.... Fidelity, the biggest US fund group, had Q3 net redemptions totaling about $3.7b [0.76%]....
[Is this the '90s version of the bank runs of the '30s?]
11/17 Russian banks prepare for suits from the West, AP via Bos Globe, C2.
Facing widespread bankruptcy, Russia's banks prepared for a stream of lawsuits from partners from the West yesterday when a three-month moratorium of foreign debt repayments ended....
[So the USA thinks it's going to ramp up one of its premier makework campaigns, litigiousness, against bankrupt Russian banks. Isn't this like trying to "squeeze water from a stone"?]
11/17 Many seniors wondering how they will pay - Despite some subsidies, most face higher prescription costs - by Lynnley Browning, Bos Globe, C6.
'For many, it used to be a case of paying the rent or eating. Now it will be a case of eating or taking your pills.' George Farber, 72, of Colrain, MA.
...Massachusetts is the only state in the nation that required HMOs to offer the state's nearly 212,000 seniors unlimited drug benefits. But a federal judge, in a lawsuit brought by the HMOs, ruled in October that a federal law allowing limits on drug benefits for seniors preempted the state statute.
[So elderly consumers die quicker and shrink markets further, and drug companies shrink and shrink the economy further. We'll gag this "boom" talk yet!]
11/17 Advances in South Africa leave workers behind - millions left impoverished, unskilled in wake of apartheid, Kurt Shillinger, Bos Globe, C1.
Addressing business and labor leaders, President Nelson Mandela called a recent public form on job creation "the most important event since the holding of our first democratic elections" in 1994.
["Oh, if only I'd been able to hand Mandela a copy of my book during his visit to Harvard back in September," moans Phil.]
[M&As proceed apace -]
11/17 American Tower to buy 2 firms - Hub company to pay $521m for OmniAmerica, Telecom Towers, by Deborah Stern, Bloomberg News via Bos Globe, C3.
[No "downsizing efficiencies" mentioned - yet.]
[Back on 11/3, we reported that the US household savings rate turned negative in Sept. for the first time since the Great Depression in the 1930s. Well, here's an even bigger wake-up call -]
11/14 Saving disgrace, The Economist, 80.
Add the savings by companies and households together and J.P. Morgan, an American bank, calculates that
the total private-sector saving rate has fallen to its lowest level ever.
[We assume that "ever" means since relevant data have been recorded and we assume that if we had the data, some of the periods immediately preceding deep and long depressions would show similarly low savings rates. Here's another gem from the same article that shows how insulated the boys at The Economist are -]
The sharp fall in saving since 1993, when households squirrelled away 5% of their income, has largely been due to big gains in share prices, which have made consumers feel wealthier and encouraged them to spend more money.
[First of all, the big gains in share prices have little relevance to consumers because most consumers either hold no shares at all or hold no shares outside age-restricted pension funds and because after the summer's wild stock market ride, few people are stupid enough, despite the Economist's opinion of them, to think stock gains are anything but a casino-borne mirage.
[Secondly, we must break "consumers" into brackets as well as employment sides. High income consumers have been jolted by market losses into an even more sluggish spending mode (not that the rate they were "consuming" before would have allowed them to spend their astronomical incomes in a hundred lifetimes). Middle and low income consumers are whistling in the wind as they blow the last of their credit lines and brace for another round of personal bankruptcies. Companies are shaken by Asia and Latin America, aghast at their flagging markets, and drugging their brains (and hearts) to be "forced" into yet another huge round of suicidal "one time" layoffs.]
11/14 Brazil bailout aimed at halting spread of crisis - $41.5b IMF package designed to prevent Latin America, and possibly US, from being pulled into global turmoil, by Stan Lehman, AP via Bos Globe, F1.
[You guys think you've "designed" something? C'mon, you haven't touched the core problem of uncontrolled concentration of wealth. In two months, your 42B will have funnelled into the Swiss bank accounts of maybe 100 individuals at most. American taxpayers have just been "volunteered" into more astronomical welfare for the rich. But let's look, as linguists, at some of the choice language here -]
...designed to prevent the world financial maelstrom from pulling in other Latin American nations and even the United States.
[Whoa, this is the first time we've seen the word "maelstrom." Sounds like a serious Act of God, doesn't it? - rather than a clear consequence of the uncontrolled concentration of wealth and its corollary, "the more concentration, the less circulation." And before you standard-issue economists go off on this, let us just say one phrase to you - "diminishing marginal efficiency of concentrated wealth" - look it up in your textbooks. Much as you would like to forget it, it's there.
[Clearly we need to automate investment at levels appropriate to maintain our own consumer markets and discretionary investment targets. Timesizing does this by ARTs - automatic reinvestment thresholds - initially, time-based thresholds. For example, the top of the workweek is not an absolute universal Stop-Work-Here-Everyone! It's a threshold above which companies and individuals must reinvest profits and earnings in on-the-job training and hiring - in short, in their own corporate markets and the markets underlying their own huge investment targets. This is the inflation-blocking feature of Timesizing because no firms or individuals are going to exceed the standard workweek length, whatever it inches down to, unless they are motivated by deflationary (qualitative) incentives and not inflationary (quantitative/monetary) ones.]
Brazilian economists worry...that the new program, which requires the government to follow through on pledges of tough budget-cutting, will cause the economy to weaken further and send unemployment soaring.
[Clever chaps, these Brazilian economists. We had almost hoped that the IMF had given up on its recession-worsening strategies. Like the national Republicans, the IMF desperately needs a new approach - like Timesizing - to avoid remedies that are worse than the disease.]
[Above we have the spectacle of $41.5B of mostly American money getting flushed down the bidets of the wealthy in the Third World, which will continue to shrink markets, while, below, the poor in the late-great USA get their subsistence cut, which will continue to shrink markets -]
11/14 Welfare law raises dilemma - Some say changes may reinforce cycle of poverty, by Zachary Dowdy, Bos Globe, B1.
At 52, Ed Rogers - a white Rockland man with five children and three [out of four] years' worth of a bachelor's degree under his belt - is...scheduled to begin losiogn welfare benefits next month. In what is a paradox to some observers, the welfare law does not consider job training programs or college as sufficient to warrant an extension of benefits past the two-year limit imposed on able-bodied recipients whose children are at least 2 years old.
[So much for all the politicians' cant about "the answer is education." Timesizing bypasses education and generates pervasive on-the-job training at World War II levels.]
11/11 US productivity growth seen healthy - Gains posted in quarter despite economic turndown, AP via Bos Globe, C2.
[Productivity growth is hardly the issue when markets for products are collapsing all over the world thanks to our lack of an automatic mechanism to share the diminishing work and rising profits wrought by technology.]
That should help support corporate profits and stock prices, but it means that to stay lean, many companies aren't hiring and some are firing.
[During all of these pre-collapse periods, corporate profits and stock prices are the focus of attention and take precedence over everything else including their own underpinnings. As Will Rogers said even after the Depression started (1932), "You can't get a room in Washington...Every hotel is jammed to the doors with bankers from all over America to get their 'hand out' from the Reconstruction Finance Corporation....They have the honor of being the first group to go on the 'dole' in America!... The RFC loaned the railroads money, medium and small banks money, and all they did with it was pay off what they owed to New York banks.... They just started in to help the bankers.... Due to the lack of foresight of our lawmakers, the bankers, the railroads, and big business got the first U.S. Dole....]
Analysts said businesses, particularly manufacturers, are maintaining productivity by economizing much more quickly than in past years in reaction to slower sales. Most can't raise prices because of competition from goods made in countries trying to export their way out of slumps. [How much of this is it going to take to gag the happytalk about free trade?] It's difficult, too, to reduce wage increases [ed. then why are wages still stagnant?], because unemployment remains near a 28-year low ['course it's not counting under-employment, homelessness and prisons] and it can be difficult to hold on to qualified workers [chief qualification being willingness to work 60-70 hour workweeks on salary?]. Instead, businesses are creating fewer new jobs and cutting back on hours worked. [Cutting back to 40?]
"Layoffs are running quite high, not just in manufacturing, but elsewhere," said economist Rober Dederick of Northern Trust Co. in Chicago. "There's so much pressure on firms to perform that they're quick to respond when profits show signs of being squeezed.
[In other words, they're quick to enter a suicide pact to further undercut domestic spending and one another's customer base - the lemming syndrome.]
Thus, in the third quarter, hours worked rose at an anemic 1.2 percent rate even though output increased at a farily robust 3.5% rate.
[This should be undiluted good news. It's the whole point of technology - to produce more in less time. But such is the bizarre partitioned thinking we've been learning the last 65 years, we want to praise output per worker hour if it goes up, and decry it at the same time for losing jobs - all unnecessary if we automatically shared the diminishing work as the robots chewed it away.]
In manufacturing, output actually decreased, at a 0.6% rate, the first drop since 1991 during the last recession. [There were fewer markets for it?] But hours dropped far more precipitously, at a 4.1% rate. [Because the work was going overseas?] So the sector's productivity advanced at a strong 3.7% rate. [Again, what good is productivity without markets?]
Economists said firms need to do more than economize to maintain productivity.
[That's for sure - they need to cut hours, not jobs, maintain employment, and maintain their own markets.]
11/11 Political rhetoric vs. fact about state economy, by Jim St. George, Exec. Dir, Tax Equity Alliance for Mass., Letter to Editor in Bos Globe, A22.
Low unemployment rates and minimal inflation are positive signs. But the key ingredient for a good economy - broadly shared prosperity - is missing.... [Massachusetts'] poverty rate is now higher than at any point since the US Census Bureau began calculating state poverty figures in 1980. And it's not just the poor who are falling behind. Family income in every income group except the richest 5% remains below the levels of the late 1980s.... Median household income remains 10% below the level of 1989.
In a [real "healthy economy"] a rising tide really does lift all boats. [But] growing poverty, falling incomes, and rising inequality are hardly halllmarks of a [real "healthy economy"].
11/11 '98 voters were standing up for the little guy against big money, by Paul Wellstone, Dem. Senator, Minn. in Op Ed in Bos Globe, A23.
[Well, this was certainly true in the Race for the 8th here in Massachuchu. All three millionaires in the Dem. primary got whupped (initials G, K, & O'C - see list in Links). Unfortunately they got whupped by a political machine rather than the real mood of the voters, which was more idealistic and less manipulative. And without better ideas than we're currently running the country on, we jes' keep on deterioratin'.]
11/11 [M&A Dept.] Cargill to buy grain unit from Continental Grain, Bloomberg via Bos Globe, C2.
The Continental businesses being acquired employ about 2,600 worldwide, including 1,550 in the United States. Cargill didn't rule out the possibility it will shed some workers.
11/11 [M&A Dept.] Oracle to buy Concentra in $43 million cash deal, Bloomberg News via Bos Globe, C6.
11/7 Russia makes 3 deals to ease economic pinch, AP via Bos Globe, F2.
[And right below on the same page -]
11/6 Shortage of tech workers threatens state growth, by Kimberly Blanton, Bos Globe, D1.
[Question 1 - what about the 17% unemployment among high tech workers over age 50 - of whom Phil Hyde himself is one?
[Question 2 - if this is a real worker shortage, WHERE'S THE UBIQUITOUS ON-THE-JOB TRAINING (OJT)? Phil himself was retrained in 1983 by a private-public sector consortium working with Bentley College. During the real worker shortage of World War II, the private sector was not even waiting for the public sector - they were flinging up the OJT alone!
[Question 3 - where's the competitive wage hikes? Instead of better pay, we're getting the opposite - further lowering of wages via imported cheap labor, which brings us to...
[Question 4 - are these big babies (hitech CEOs) possibly just setting us up to cave in to their whining for more visas for low-wage workers to come over here from Bombay? Are you guys aware of how short-term this is? And how fast the market starved long term is arriving? Who the hey do you imagine is going to buy your yearly upgrades if you keep cutting your workers and cutting their wages? Remember Ford and Reuther - "Let's see you unionize these robots" & "Let's see YOU sell them cars!"
[And how about this one for an historic first - the US White House has committed to a worldwide maximum workweek of 60 hours! - "modified rapture!"]
11/6 Pact signed for plant workers abroad, AP via Bos Globe, A9.
NEW YORK - A White House task that frew out of the Kathie Lee Gifford sweatshop scandal has signed a pact with employers such as Nike and Reebok to protect workers at overseas factories. Human rights groups and a union sharply criticized the agreement, which would still allow employees as young as 14 to work 60-hour weeks for less than $1 a day.... Under the accord, American manufacturers pledge not to do business with companies that use forced labor or require employees to work more than 60 hours a week. Companies will prohibit hiring children younger than 15 except in countries where 14-year-olds can work legally. Contractors will be required to pay the minimum wage mandated by local law or the prevailing industry standard, whichever is higher.... Nike, Reebok, Liz Claiborne and Phillips-Van Heusen helped negotiate the accord. Gifford, L.L.Bean, Patagonia and Nicole Miller have signed on.
[How coincidental - this election day has turned out to be a huge day for bad news (see the next four stories and click on Downsizing on the homepage) - is there just possibly a message here for voters from The Big Guy in the Sky?...]
11/3 Most dangerous commodities - Greenspan did not seem to understand that the issues are no longer those of fine-tuning inflation or growth but avoiding a global meltdown, by Lester Thurow,econ. prof, MIT Sloan School of Mgmt, Bos Globe, D4.
...Rational or irrational, fear is clearly on the rise. Where is the leadership to stop it?
[Lester, first we need the ideas. THEN we need the leadership. I've got the ideas - just click on Timesizing above and explore the rest of this website. Then get my book. THEN get the leadership or just educate the leadership already in place.]
11/3 Manufacturing slows for 5th straight month in Oct., AP via Bos Globe, D7.
NEW YORK - In the latest sign of slowing in the US economy, manufacturing activity contracted faster than expected in October as the global economic crisis continued to eat into American exports.
11/3 US savings rate turns negative - Americans spent more in Sept. than they earned, Peterson & Gregory, LA Times via Bos Globe, D1.
...for the first time since the Great Depression.... The negative rate...the first in 65 years - speaks volumes about the US economy in the 1990s.... The savings rate...has ranged between 5% and 10% of after-tax income for most of the post-World War II period. It slipped below 4% in 1997 and has fallen sharply since then. The statistic obscures enormous differences among households, many of which enjoyed no Wall Street windfall and are stuggling under the weight of growing debt. "There's a nasty feeling that the debt is distributed more evenly than the wealth,"...said [David Wyss, chief economist with DRI in Lexington].
11/3 State to fund 500 emergency beds to ease overcrowding at shelters, by Zachary Dowdy, Bos Globe, D17 [Boy, they sure tuck this stuff away at the back, don't they!].
Hoping to head off a crisis that grows as winter approaches, state officials have pledged funding of up to $700,000 to pay for 500 emergency beds to relieve shelters barely supporting needs posed by record numbers of homeless people....
11/1/98 Happily ever after? - Market bears, some say, have invaded Goldilocks economy. As reality resurfaces, investors await the next chapter, by Peter Gosselin, Bos Sundy Globe, E1.
[This slightly uneasy article contains astonishing statements like -]
For almost a decade, the American economy hummed along in near perfect balance, neither too hot nor too cold.
[Let's do a little linguistic analysis on this weird sentence, which reflects the stupidity and blindness of both standard economics and the mainstream media (and with Jackie Mason, "I say that with the greatest respect." How did the 1920s flow into the 1930s - because the Great Depression did not start on one day -- Oct. 29, 1929? What economic trends occurred in the 1920s that occurred a little in the 1970s, a lot in the 1980s and bigtime in the 1990s, trends that standard economists should long since have been noticing and screaming about, but because as a profession they missed them in the 1930s, they have missed them today. Even when, as above (11/3 "Most dangerous commodities"), a standard economist like Lester Thurow starts warning of economic meltdown, they don't have a clue about the fundamental dynamics. The most visible symptoms in the 1920s and 1980s-90s are the huge numbers of mergers and acquisitions (M&As), especially in banking, followed immediately by huge and ongoing corporate downsizings in terms of massive, colossal job loss. Another symptom is political apathy. Voter apathy in the presidential election of 1996 was the highest since 1924 (51%). No standard economists have put these trends together and none have given either their true weight or interpretation.
[As Thurow blindly says, it's not a matter of finetuning against inflation. The hot and cold metaphor is completely inappropriate.
[So what IS going on in the deep structure? What is it that M&As, downsizing and apathy are symptomizing? We may the unusual assertion that it's mounting labor surplus, so gradual and pervasive that it goes almost completely unnoticed and frequently contradicted by many leading indicators like unemployment, which have functioned to simply prop the dominant economic paradigm while counting almost nothing of importance. The few indicators that do catch it are treated ambivalently or (perversely) as positive signs. The same economists tut-tut about long-stagnant wages and the "growing income gap," simultaneously celebrate low wage-price inflation and American wage competitiveness in the global marketplace. They NEVER make the connection between stagnant domestic wages and stagnant domestic consumer markets.
[Why is there a growing peacetime labor surplus? We believe that immigration is no longer the major factor, women in the workforce is not major - on the negative side, modern medicine's plague controls is not major, nor obviously, is the absence of war, in peacetime. We believe it is technology, our failure to realize the pervasive transfer of hard work to technology, and our failure to realize that the promise of this transfer in terms of easier lives for all has shifted from optional to imperative. We design a way to take the easier lives for all or we split into overworked and underemployed, as we have in fact been doing over the last generation. If we don't keep moving on "less work and more pay," we concentrate wealth to an astronomical degree totally out of scale with its own foundation in consumer markets, a degree that starts starving the markets away from its own HUGE investments.
[The growing peacetime labor surplus explains the economic benefits of war - which solves labor surplus in the worst possible way. When there is no labor surplus, market forces centrifuge wealth and keep concentrated capital for investment on the same scale as centrifuged capital in the productivity&investment-anchoring consumer markets. The only way we've had of doing that for the last 58 years since we effectively froze the workweek (after 150 years of reducing it), is war. The way to avoid war is worksharing - via workweek reduction, preferably automatically determined by our rising technology levels, or in practical terms, by our under-employment rate (not just our lame "unemployment" rate). It's easiest and healthiest to share the wealth by sharing the work and the skills, and we can say, "It's easier to share work than money." Trying to share money first only creates dependency.]
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