DoomwatchTM vs. Timesizing®

Collapse stories - December, 1998
[Commentary © 1998, 1999 Philip Hyde, PO Box 622, Cambridge MA 02140 USA]

["Modified Rapture" Dept. -]
12/30/98 At last, a rush of sales, by Greg Gatlin, Boston Herald, p. 31.
...Last-minute shoppers boosted holiday sales at [nationwide] malls by 5.3% over last year, according to national figures released yesterday by the International Council of Shopping Centers [ICSC].... ICSC looked at sales from more than 2,500 specialty stores in 48 regional malls nationwide.... Many expect this season's deep discounts to cut into profits. First Data Corp.'s Telecheck Services said sales [by check, not cash or credit] nationally rose 2.5% for the period between Nov. 27 to Dec. 24. Telecheck's senior economic adviser, William Ford, said retailers benefited from a return to more seasonable weather and from one extra shopping day this year, compared to last year.
[Let's see, this year's Thanksgiving to Xmas period was 4+24=28 shopping days compared to last year's 27. 28/27=103.7%. Hold the rejoicing - the difference in shopping days more than explains Telecheck's 2.5% rise and goodness knows what ICSC did to come up with their 5.3% boost. Additional underwhelming news -]
The check clearing company said Massachusetts sales dropped .5% compared to last year. Sales in Boston were down 1.2%.
[And this is a supposedly good area for jobs, etc. Something fishy about that 5.3%!]

[Ominous Dept. -]
12/28 Nations strive to limit freedom of the Internet, by David Marcus, Bos Globe, frontpage.
Item - China blocks access to sites about Tibet, Taiwan, democratic movements and dissident groups.
Item - Saudi Arabia censors sites critical of the royal family.
Item - Cuba seizes laptop computers from dissidents as "subversive instruments."
"Big deal! Nutcase nations!" sez you. But what about this one -]
Item - German judge sentences a CompuServe manager to two years in prison for allowing access to pornography.
[Daa dada daa.]

["Our Heart Bleeds" Dept. -]
12/26 Cash crunch chills diplomat's lifestyles in Ottawa, Reuters via Bos Globe, A23.
OTTAWA - An embarrassed sort of hush has fallen over Canada's diplomatic circuit this season, as many foreign embassies, crippled by the global financial crisis, have been forced to forego merry-making in favor of frugality.
[Oh why not GO for it - "fragged by the far-flung financial floundering, have been forced to forego festivities in favor of frugality"!]
"We don't have any entertainment spending now, not at all," Ibnu Wahyutomo, third secretary at the Embassy of Indonesia, said this week. "Even for a diplomatic reception for our Independence Day, we just - forget it." ...Russian officials in Ottawa declined to be interviewed....
[And it's not helping the Ottawa economy any, either! But then, any capital city that weakens its graduated income tax (which taxes less active money) and initiates a huge sales tax (i.e., the notorious Canadian "GST," which taxes more active money) can hardly be interested in economic dynamism anyway, since, as Milton Friedman says, you get less of whatever you tax.]

[More whining by our spoiled and helpless CEOs about labor "shortage" -]
12/24 Labor deficit, global woes loom in N.E., Reuters, via Bos Globe, D3.
Demographics and a world slowdown are expected to squeeze New England's economy come the new year, according to analysts. A scarcity of available workers and less business...from Asia are expected to whittle the region's growth to around 1.7% next year from about 3.5% in 1998, said economic consultants with Standard & Poor's DRI in Lexington.... New England's booming financial services industry...and the vibrant technology industry have proved a boon to the Northeastern patch, and would provide some cushion against recession [if a downturn occurs].
[Hey, get your story straight, you "objective" consultants and analysts! If our financial services sector is so "booming" and our technology industry is so "vibrant," why are you and your corporate masters complaining about a scarcity of available workers instead of setting up massive on-the-job training programs? There can be only one answer. There is no scarcity of workers at all. There's a gross and swelling surplus of workers as proved by our 17% unemployment rate among high tech workers over age 50 and our record-breaking prison population.
[But you CEOs today are so spoiled, you need take absolutely no responsibility in training them. You can easily shove that burden off onto state and local governments (and taxpayers) and onto the thousands of increasingly desperate would-be employees themselves. And if local and state governments don't kowtow to you, you can threaten to take your jobs elsewhere, just as Raytheon and Fidelity did in recent years to get taxbreaks from Massachusetts. A shortage of workers implies a surplus of jobs, and Mass. legislators would hardly have buckled under to your job blackmail if there had been a surplus of jobs.]

[Top Executive Pay Dept. -]
12/19 [Lawrence] Fish sees 47% increase in annual pay - Citizens Financial chief earns $5.5m in salary, bonuses, by Alex Pham, Bos Globe, F1.
...in the fiscal year ending Sept. 30, maintaining his status as one of the highest-paid bankers in New England. The figure...includes $789,600 in salary, $4.62 million in performance-related bonuses, and $137,760 in pension contributions and other benefits, according to a financial statement released yesterday by the bank's parent company, Edinburgh-based Royal Bank of Scotland Group.... Bank analysts said Fish earned his big paycheck. "He's worth every penny," said James Moynihan, senior vice president of Advest, Inc. in Boston. "He's done a remarkable job. If you look at his numbers, it just keeps getting better and better."
[But then, James and his fellow bank analysts have a lot of self-interest in saying things like that - self-interest that does not extend much beyond their own circle or viewpoint. The ascription of so much "earning" to one individual worsens an already critical problem - the wealthy could not spend their money in thousands of lifetimes. Those mountains of wealth are frozen mountains coated with glaciers. They do only one thing. They further inflate the financial markets, with stocks already far above even their usual exaggerated P/E ratios.]
Royal Bank of Scotland defended Fish's pay package.
[Even the big boys sense there is something way out of whack about this kind of practice. They sense there is something obscene, something unreal, something suicidal, something about it that insults human intelligence. And yet it is sooooooo seductive, it's hard to articulate that something. The only way Phil Hyde has of doing it is by fleeing into the future with automatic reinvestment capitalism, a form of economy where reinvestment of wealth happens on an automatic, pervasive, daily basis - at a relatively colossal level - in a much wider circle of people and their skills - that is, in ALL company employees, rather than in just the tiny subgroup of top executives. This colossal automatic reinvestment is initially triggered, targeted, sized and paced by the incidence of overtime throughout the company and throughout the economy and throughout the world. It pours money into training and hiring on a scale initially capable of restoring consumer markets to a volume on par with the huge-potential productivity targets (enterprises) sought by national and international wealth. (The "initially" qualification here simply refers to the fact that the overtime phenomenon will not forever suffice for keying automatic reinvestment, because of the persistent rise of human sensitivities and expectations, but it will suffice for 100 years in round figures. It is this overtime-focused century that Phil refers to as timesizing.)]

[And right beside the above piece on the over-success of Lawrence's Fish-ing expedition -]
12/19 Average tax bill to rise for Boston homeowners, by Jennifer Babson, Bos Globe, F1.
[Funny how, the further we get from a world war, the less interested we get in sharing with one another, and the more we weaken, by dismantling graduated taxes, the one automatic wealth-centrifuging mechanism that our present primitive economic design contains. Thus, naturally, all taxes rise, and we further soak the middle class and undermine the foundations of the rich.]

[And right beside that, another step toward giantism in dairying, the last holdout of family farming -]
12/19 Two major dairy firms join their operations in Northeast, Bloomberg via Bos Globe, F1.
Suiza Foods Corp. of Dallas, one of nation's largest dairy companies, and Dairy Farmers of America agreed to combine their northeastern dairy operations in a joint venture that Suiza said will allow it to cut costs and boost regional sales....
[Merge and downsize, merge and downsize. They still haven't solved the puzzle of how to cut costs without cutting markets.]
Included in the venture are Suiza's Garelick Farms operations in Massachusetts, New York and New Jersey....
Here's hoping this doesn't raise pressures on Garelick to use cow hormones.]

[And top right, same page, "we must be feeling good because our count-nothing unemployment rate says so!" -]
12/19 State's jobless rate falls below 3% - Figures match those of '87 boom, by Kimberly Blanton, Bos Globe, F1.
Holiday hiring by retail stores helped push the number of unemployed people in Massachusetts to lows not seen since the economic boom of 1987.
[Ah, Kimberly, are you sure you want to tell us this is just seasonal so early in the article?] The state Division of Employment and Training in its November report said yesterday the jobless rate fell by a half percentage point to 2.9%.
[Well, "half empty or half full," as they say. During World War II, any jobless rate above 2.0% was cause for alarm, and what they called "employment" then was high-pay&benefits manufacturing jobs and not part-time, seasonal, low-pay, low-benefits "jobs" in the service sector, such as retail. Timesizing recreates the rosy conditions of the wartime economy without the war.]

[Ominous Dept. -]
12/18 Leonard M. Reiser, was keeper of the 'Doomsday Clock'; [dies] at 76, by Tom Lang, Bos Globe, A87.
...as chairman of the board of the Bulletin of the Atomic Scientists was seen in numerous new photographs resetting the hands of the "Doomsday Clock"' that the journal uses to dramatize the threat of nuclear war.... [Well, economic meltdown is the greater threat today - although that could trigger nuclear war - and it's tough to tell how close we are from past experience because the economy is MUCH bigger today than it was in 1929 - so it takes a lot more wealth concentration to stop that much more momentum - and there are many more government programs in the "basement of the economy" providing some centrifuging action to offset the still argely uncontrolled centripetal forces on wealth of our nation. But sooner or later as "the more concentration, the less circulation" intensifies, the big boys will bring us (and themselves) down....]

12/17 Global turmoil a boom or bust, depending on sector - Manufacturing, bank earnings hurt, but home construction at 14-year high, by Dave Skidmore, AP via Bos Globe, B18.
The impact of foreign economic turmoil...is showing up in a broad cross-section of the American economy.... But low mortgage rates produced by the crisis helped push single-family home construction to a 14-year high last month. "Today's [federal agencies'] reports highlight the discrepancy between the booming domestic side of the economy...and the wobbly external side [with US factory, mine and utility production dropping in Nov. for the fourth time in six months and Q3 bank earnings falling for the first time in two years]," said Bank of Montreal economist Tim O'Neill....
[Evolution, especially social evolution, is very complex, messy and frustrating for perfectionists.]

12/17 [Click here for yet another example of US bank mergers, a real harbinger of depression as bankers with more technology scramble for less circulating wealth. We are going to collect these examples on a separate page to fully wake up some of you who may be starting to wonder about our "robust" economy.]

12/17 Columbia/HCA putting 200 buildings up for sale, AP via Bos Globe, B18.
...medical office buildings...for the convenience of doctors who admit patients to the company's facilities.
[Funny how in the downcycle of the Kondratieff wave, you keep hearing about deathwish CEOs downsizing admitting facilities and marketing staff. When it suffered a downturn in the early 1980s, timesizing *Lincoln Electric developed their own early version of Ron Healey's *30/40 plan that trained willing HQ staff in sales, sent them out to the boondocks to "sell sell sell", and paid them for 40 hrs/wk of their old job while they worked 30 hrs/wk at their new job.]

12/17 Russia gets OK to print $1.2b of rubles, AP via Bos Globe, B18.
...from Parliament yesterday...in a bid to help pay the state's crushing debt, but the move could stoke already high inflation...which is already running at around 70% this year.
[Oo oo oo! how many parallels with the 1920s do we need? Russia is going to play the Weimar Republic this time round. The monster Stinnes who engineered Weimar's hyper-inflation has been played this time by all the brilliant consultants from Harvard who jumped Russia into free markets in the blink of an eye, and by the thugs in the resulting gangster economy.]
Bills have been proposed to lower the value-added tax, currently at 20%....
[Gee, a higher one than Canada's punitive GST. As Milton Friedman says, "You get less of what you tax." So if you want less value and sales, tax them. Now concentrated wealth on the other hand....but even that is better done with automatic reinvestment (as in the 2d and 3d public-sector phases of timesizing) rather than redistribution via graduated taxes.]

12/16 Under veneer of consensus, discord lurks - Southeast Asian leaders pact on 'bold measures' to fight crisis masks deep schisms, by Indira Lakshmanan, Bos Globe, C1.
[Guys, we don't need "bold," we need SMART, i.e., employee and market fostering. The enemy is not diversity of approaches. It is the assumption that simplistic approaches (e.g., free trade) and groundless faith can be applied successfully in every single culture.]

12/12 No banking on Russian banks - Despite promises, many small depositors can't get their money, by Jean MacKenzie, Bos Globe, F1.
MOSCOW - For Russia's bank depositors...a pessimist is one who looks at his situation and moans, "Things cannot get any worse." The optimist, on the other hand, chimes in cheerfully, "Sure they can."
[We think Jean got this story backwards. It should really go like this.]
An optimist is one who looks at his situation and chimes in cheerfully, "Things cannot get any worse." The pessimist, on the other hand, moans, "Sure they can."

["Less Thorough" Waking Up?]
12/8 World's locomotive slowing - US solving short-term problem by creating long-term one - Americans don't believe in preparing for economic hurricanes until the storms have arrived, by Lester Thurow, Boston Globe, p. C4.
[The next step for Lester is to reconcile his "Act of God" language ("hurricane") and his "we are doing this to ourselves" language ("solving problem by creating one"). Make up your mind, Les.
[Then maybe we can explore the underlying reason and possibly even re-open the discussion about why we aren't continuing to share the diminishing available work per person as we did during our first century and a half (1776-1933). When in 1982 Phil asked you why we don't solve unemployment by just cutting the workweek, you said it had been tried and failed. You couldn't have been thinking about our first century and a half, could you, Lester, because that's when it was not just "tried" but normal, and very successful.]

[A case in point of the "domino effect" contributing to an economic death spiral -]
12/8 Wyman-Gordon finds itself in a stock tailspin - Boeing layoffs, production costs takes toll on Mass. parts maker, by Bailey & Syre, Bos Globe, C1
[Hey, how come our top executives spent so many years worrying about the domino effect of communism on free countries and now, by downsizing instead of timesizing, they are creating a devastating domino effect on companies and economies (Wyman-Gordon was named the Globe 100's company of the year just last May) - our own top executives are damaging us (and themselves) worse than communism ever did!]

12/3 Fighting a downturn - Eleven European nations [unexpectedly] cut short-term interest rates in a coordinated attempt to spur their economies, frontpage blurb for article "Euro nations cut rate to 3%" by Aaron Zitner, Boston Globe, p. E1.
...to ward off the effects of the Asian and Latin American financial crisis....
[That's fine, boys. Exhaust the conventional solutions - they're either cosmetic (rate cuts) or aggravating (layoffs, tax cuts for the rich) anyway.]
In the United States, stocks fell...amid concern Brazil is failing to take steps to avert a meltdown of South America's largest economy.
[Hey, what about the United States failing to take steps to avert a meltdown of the world's largest economy?!]
The eleven nations [Austria, Belgium, Ireland, Italy, Finland, France, Germany, Luxembourg, Netherlands, Spain and Portugal] that cut rates are the same ones that are adopting the euro.... Coordinated interest rate cuts, which are now uncommon, will be the rule in the future.... Rates before the cuts had varied...from [4% in Italy] to 3.2% in Austria.... [Italy cut to 3.5% and the other ten cut to 3%.] Allen Sinai, shief global economist at Primark Decision Economics in Boston [said]..."I think this is...a major change from the religion of fighting inflation...."
[But let's not get distracted here. It's not that we have inflation-fought our way into a classic deflationary depression. It's that we have wealth-concentrated our way into it.]

12/2 Getting the disabled back to work, editorial, Bos Globe, 26.
Medicare and Social Security provide assistance to 9 million people too disabled to work.
[How much does this cost?? It has unintended consequences -]
The programs can also provide an unintended disincentive for people to go back to work...[whereby] once they start earning income, they often lose medical benefits, and the positions they take often lack comparable insurance ..\.. This flaw can be corrected [by] an item in Pres. Clinton's next budget...modeled on [a plan] proposed by Senators Edward Kennedy and James Jeffords....
[We suspect that however much this costs, however long it takes to "get the bugs out," it would be cheap at twice the price.]

For earlier collapse stories, click on the desired date -

  • Nov/98.
  • Oct/98.
  • Sep 16-30/98.
  • Sep 1-15/98.
  • Aug/98 and before.


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