Timesizing® Associates - Homepage

---

Good News, April 1-16, 2001
[Commentary] ©2001 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

4/15-16/2001  weekend glimmers -

1. 4/16  Use of English as world tongue is booming..., by Diana Schemo, NYT, front page.
   ...English [is] increasingly becoming the world's lingua franca....
   [See also "Conquering Europe, word for word," by Peter Schneider, 5/01/2001 NYT, A27.]

2. 4/16   France's Prime Minister battles post-election blues: strikes, squabbling and floods, by Suzanne Daley, NYT, A10.
   [In short, business as usual in France. But let's not miss these little gems of economic design -]
   ...Mr. Jospin also announced he was considering measures ranging from a law that would make it harder for companies [in profit] to lay off workers to an increase in the tax rebate for the lowest-paid employees....
   [Both good ideas, from the viewpoint of strengthening the weak centrifugal force on income and dynamizing the economy.]

3. 4/15  Relief from the 'pre-death tax,' op ed by Robert Kuttner, Boston Globe, D7.
   The Bush administration has made a big deal about repealing what it calls the "death tax" - the tax paid by large estates [of] only about 2% of Americans. [But] there is another tax that...harm[s] the estates of moderate income people [who are much much more numerous.  It] is really outrageous..\.. This is the provision of the Medicaid law requiring middle class people to "spend down" their net worth to almost nothing before they can qualify for nursing home care, as paupers....
   Middle income people work a lifetime and accumulate savings, often from the sale of a home. They may have total savings worth $2-300,000 or less. [They] keep this money for retirement income to supplement Social Security, for the contingencies of old age, and hope to leave a little to their children. [It's] not subject to the current estate tax, which has an exemption of $675,000...soon [to] rise to $1m...but if you or a loved one has a medical condition that requires long-term nursing care, that estate is simply wiped out....
   [So the children of the middle class who actually use money and spend it get zero while the children of the rich get mind-bending, life-twisting, astronomical hoards of money at market-depressing, unspendable levels. This is what comes of forcing capitalism to run under a chronic shortage of job and business opportunity, by cutting jobs instead of work hours as technology pours in. Seventy years ago, Arthur Dahlberg (see bibliography re Jobs, Machines & Capitalism, xii) described the cure - switch to forcing capitalism to run a chronic "shortage" of labor. This is what happens in wartime (and during plagues and mass emigrations) and its centrifuging, dynamizing effect on money is responsible for the famous economic prosperity of war, which mainstream economists don't like to talk about. The truth is, it's usually not a "shortage" of labor even during war - it's simply an appropriate balance of labor and employment, of jobseekers and jobs, at last. And the intelligent way to achieve it is not war or plague or emigration or genocide, but the way France is demonstrating - and some of America's most competitive corporations (such as Nucor Steel and Lincoln Electric) - namely, cut the workweek, not the workforce.]

• [you don't see this very often -]
  Consumer Reports refuses to renew a mass subscription, by Matthew Wald, NYT, B4.
  WASHINGTON...- Consumer Reports [CR] magazine would love to add to its base of four million subscribers. But [it] wants them only one at a time..\..
  John H. Fitzgerald...owns 31 car dealerships in the Washington suburbs and in Penn. and Fla...had been a loyal [CR] reader for years..\.. A few years ago he decided to offer..\..his employees a turkey every Christmas [or] the magazine. About 170 of them, or a third of the total, chose the magazine.... A one-year subscription is $26 for 13 issues, including the April auto ratings issue.... Mr. Fitzgerald['s] businesses...sell GM, DaimlerChrysler, Toyota, VW, Subaru, Mitsubishi and Saab.
  ..\..[So] last month, Consumer Reports told Mr. Fitzgerald that it was refusing to renew the subscriptions. "Processing such an abnormally high amount of subscription orders from a person representing an automobile dealership may be viewed as a compromise to our objectivity and present the appearance of an impropriety," wrote Anthony Aguirre, a customer relations representative at Consumers Union, the nonprofit group that publishes the magazine....
  [Here's a company that has the sense to "avoid all appearance of evil" (I Thess.5:22), a nice Biblical observance for this Easter season and a nice change from the usual suicidal stupidity, of which the latest Northeast U.S. example is a Bostonian who made a noisy announcement of her candidacy for mayor recently without bothering to pay her taxes for the last two years (see today's "Davis-Mullen vows to move past tax lapse," by Ebbert & Schweitzer, Boston Globe, front page). Where do they get these people?!]

1. [1 UPsizing]
   E*Trade will place shops and ATM's in Target stores, Reuters via NYT, C4.
   ...An Internet brokerage company...agreed to put 20...shops and more than 1,000 ATMs into Target Corp...and Target Greatland stores in the United States.... E*Trade currently has ATMs in 110 Target stores.

2. Economic scene - A history lesson: Don't count on stocks to lead the way out of a downturn, by Jeff Madrick, NYT, C1.
   [Here we have a backhanded admission that the so-called "wealth effect" is bogus - the idea that some significant degree of consumer spending is based on the stock market. In fact, quite the contrary is true. Astronomical stock bubbles like the last decade's is a pretty good indication that money which should be going into the consumer base isn't. Instead, it's getting waylaid in the labyrinthine byways of the financial markets and starving the consumer base. The idea that the majority of Americans own stocks is ridiculous. Push the data and you can occasionally get it to say that over 50% of households have at least one person who owns at least one stock, but the vast majority of people who own stocks have them tied up in 401K's and other pension schemes, unavailable for spending now or any bolstering effect on the consumer base. The stock market is the locus of the consumption-strangling concentration and hibernation of spending power, not the seat of its consumption-spurring centrifugation and activation. To centrifuge spending power, you need to engineer what employers perceive as an intense shortage of labor, by cutting the workweek.]

3. Texas takes first step toward death penalty referendum - Support for a moratorium while capital punishment is examined, by Jim Yardley, NYT, A22.
   HOUSTON...- In a surprising vote in the state that leads the nation in putting inmates to death...the Senate Criminal Justice Committee..\..in the Texas Legislature [yester]day endorsed a resolution that would allow voters to decide whether to impose a two-year moratorium on executions while an independent commission examined the fairness of the capital punishment system....
   [More power to the referendum movement and to direct democracy! With the dilatory progress on campaign finance reform, it is the major hope of a return to democracy in this self disintegrating and impoverishing plutocracy.]

4. DaimlerChrysler's shareholders vent anger at acquisitions, AP via Boston Globe, E2.
   [At last stockholders are starting to wake up to the generally negative effects of acquisitions.]

5. ["good but..."]
   Biggest drop in prices of imports since 1992, Bloomberg via NYT, C4.
   [Good that we can get foreign stuff cheaper, but bad because (A) in the context of braindead free trade it will further decimate American manufacturing, good jobs, active spending power and resistance to recession, and (B) it indicates that overseas sources of imports are already in a deflationary spiral, ever more desperate to sell at any price to preserve what's left of their own good jobs.]

1. [1 UPsizing]
   Scana Corp., NYT, C4.
   ...Columbia, SC, owner of a SC utility, plans to build a natural gas-fueled power plant in Jasper County for as much as $300m to meet electricity demand by customers in the southern part of the state....
   [Unspecified new jobs.]

2. [1 UNbankruptcy]
   London Fog [Industries] to emerge from bankruptcy, lawyer says, Bloomberg via NT, C4.
   ...the maker of raincoats and outerwear...next week after shedding more than $100m in debt.... London Fog...based in Seattle [at least that gets the "Fog" right] \filed\ in September 1999 after an aggressive plan to open retail stores hurt its profits....

3. Dutch upper house backs aided suicide, Reuters via NYT, A3.
   The Netherlands became the first country to legalize allowing doctors to help end the lives of seriously ill patients,
   [This makes the Dutch the world leaders in social evolution and the bravest pioneers in converting humanity from quantity to quality of human life, as we tax the environmental limits of our planet by almost every measure. So France leads the world in economic progress with its 35-hour statutory workweek, and the Netherlands lead the world in social progress.]
   ...despite a protest by thousands of demonstrators.
   [There are still plenty of people who can't let go of the past, who can't let go of our childlike simplicity in wanting to spawn and stay alive regardless of the pain. Americans have a particularly hard time saying goodbye. But the mark of a truly grownup, graceful and elegant person is their ability, their smoothness, their skill, in departures, including The Big Departure. Only when we master that will we have the flexibility to achieve the "voluntary mortality" prophesied by our science fiction writers.]
   The 75-seat Senate voted 46 to 28 [4+6= 10 vs. 2+8= 10, a perfect vote] in favor of the law, recognizing a practice that has already been tolerated in the Netherlands for more than two decades....

4. ["good, but..."]
   Gillette lowers its sales for the last 2 years, Bloomberg via NT, C4.
   ...Last year, the Financial Accounting Standards Board mandated that companies [could] no longer include coupons, rebates and free products as part of sales.
   [Wha-a-at?! You mean all those years they could give away free products and count them as sales? Truly, human capacity for self-deception, specifically CEOs' capacity for self-deception, is infinite.]

5. Click here for today's timesizing stories - 4/11/2001.

1. 2 UPsizings, totaling 3 + unspecified new jobs -
   1. ...As another [agency] expands, by Stuart Elliott, NYT, C8.
      ...Starr Seigle Communications in Honolulu is opening an office for the New York area to offer services like public relations and consumer promotions. The office, to be called StarrPR/New York, is in Upper Montclair, NJ and has three employees....
   2. An agency opens..., by Stuart Elliott, NYT, C8.
      An ad agency...McCarthy Mambro Bertino is being opened in Boston by three executives [with] two clients...Boston Beer [and] Tellium....

2. Click here for today's timesizing stories - 4/10/2001.

• A win-win benefit - An Intel-Babson MBA program is one of a growing number of professional development programs offered by companies to sharpen staff skills and gain loyalty, by Diane Lewis, Boston Globe, J1.
  ["Loyalty"?! She has the nerve to mention loyalty when the first "strategy" many CEOs think about today is mass layoffs?]
  ...An on-site MBA program \at\ Santa Clara, Calif.-based Intel...which admits 35 employees on May 9, will be taught by professors who will commute to the West Coast from Babson College in Wellesley.... Babson's standard MBA program, 24 months...and taught at the Wellesley campus costs $48,750..\..
  [Oh that sounds real efficient, and sooo ecological. And taking care of a rip-roarin' 35 people. Wow.]
  The price tag? A cool $52,000 per person for 27 months.... Intel will finance the Babson/Intel effort.... This is a retention vehicle for Intel....
  [Intel hardly needs any retention vehicle other than the 38,000 jobs the high tech industry shed in the first three months of this year - see our collapse page this weekend (4/09/2001). Sounds like something that was planned well before the dot-com shakeout.]
  The Babson/Intel project is among a small but growing number of professional development programs around the country in which colleges or universities agree to custom-design curricula to meet a company's needs.
  [If they're all reaching to the opposite coast for partners, kinda takes on the strenuous look of a parading horse to impress susceptible employees.]
  Texas Instruments has a similar arrangement with the University of Texas.
  [Good! Sounds a little closer.]
  The University of Georgia has an MBA partnership with PriceWaterhouseCoopers.
  General Motors last week announced a special online MBA for its 88,000 salaried employees that includes courses from Columbia and Stanford Universities....
  [Well, 88,000 is an impressive figure, but now we get into a more meaty issue - since the "salary" concept has become a tool for US employers to get a blank check on employees' lives, with unwritten "face time" requirements of up to 80-90 hours a week, just when in the week are these 88,000 salaried employees going to knock off an MBA? We understand that some of them actually have families.]
  When the Society for Human Resource Management looked at education last year, it found 93% of 600 US companies surveyed offer some form of professional development and 81% offer educational aid. A closer look at the statistics revealed that most large companies - about 97% - now offer educational opportunities. By [comparison], 88% of small firms offer education benefits....
  [If you accept these high percentages, you have to ask why CEOs are still complaining loudly about skill shortages. Either these educational programs are extremely ineffective, or CEOs are just complaining about skill shortages, often under the misnomer of "labor shortages," to excuse even more visas for cheap labor from overseas and even less restricted immigration, or both. During World War II when we were much closer to a genuine labor shortage than we've ever been since, there was little talk about "education" and much talk about "training," specifically "on-the-job training." Intel's program comes closest to this by bringing the professors right to the company and negotiating a tailor-made course for Intel managers-to-be. But Intel has figured out a way to do this at a maximum cost and a minimum output of trainees. In general, most of the hopefulness of this article has been washed out by the finally noticed layoffs of the last three months anyway. And the massive recourse of Intel to layoffs instead of retraining, even before the last three months, does seem to cast this fancy program in the light of a parading horse; that is, a minimal, showpiece effort that will be given maximum publicity by the company but will really mean very little. We have 675 Intel downsizings in Mass. noted on 9/23/1998, but that article also mentions their 1100 Ariz. cuts in Jan/98, their Apr/98 vow to cut 5000 in '98, 600 Wash. cuts in May/98, then 5000 on 3/09/2001 and 1400 in Dublin in 3/15/2001. So clearly Intel is talking out of both sides of its mouth on how much it values employees.]

1. Canada: Protecting the spirit bear, by Anthony DePalma, NYT, A6.
   British Columbia [provincial] officials banned logging in 1.5 million acres of coastal rain forest, which includes the habitat of the rare white bear called the spirit bear. About 400 of the bears, also known as the Kermode bear, inhabit islands off the coast about 300 miles north of Vancouver. Environmentalists in the U.S. and Canada had organized boycotts of wood cut from trees in the area.
   [Thank God there are still some respecters of the environment in power somewhere in North America!]

2. Click here for today's timesizing stories - 4/05/2001.

1. Campaign finance bill passes in Senate, 59-41; House foes vow a fight - A McCain victory - Long-debated measure would ban the use of soft money, by Alison Mitchell, NYT, front page.

2. 2 UNtakeovers, totaling $9.55B -
   1. FPL cancels its acquisition of Entergy, Bloomberg via NYT, C4.
      The FPL Group canceled a $15.8B acquisition of the Entergy Corp. after the two utilities fought over who would lead the combined company, and FPL said Entergy gave conflicting earnings forecasts....
      [This undoes the takeover of 8/01/2000, worth only $7B at that time.]
   2. Ariba, software maker, reports loss and plans cuts, AP via NYT, C4.
      ...Ariba also said it was scrapping its acquisition of the Agile Software Corp.
      [This undoes the $2.55B takeover of 1/30/2001.]

3. Click here for today's timesizing stories - 4/03/2001.