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Good News, October 16-31, 2001
[Commentary] ©2001 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

10/31/2001  short-term glimmers of hope - 2 UPsizings -

1. New Bcom3 units in multicultural hue, by Stuart Elliott, NYT, C8.
   The Bcom3 Group in Chicago [has] formed two divisions specializing in multicultural advertising and media services... One division, Pangea, will offer advertising, direct marketing, public relations, promotion and Internet campaigns, while the other, Tapestry, will offer media planning, buying and strategy.... In addition to the gay and lesbian market, Pangea and Tapestry will pursue black, Hispanic and Asian-American consumers as well as consumers who live in big cities or are influenced by big-city lifestyles....
   [Unspecified new jobs.]

2. Alkermes [of Cambridge MA] to build plant in Ohio, by Jeffrey Krasner and Globe wire services, BG, D4.
   ...to manufacture a long-acting version of Risperdal, Johnson & Johnson's drug for schizophrenia.... J&J will contribute...for the construction of the new plant.
   [Unspecified new jobs.]

1. United Parcel Service of America, NYT, C4.
   ...Atlanta, the world's largest freight hauler, started a new subsidiary, UPS Consulting, to help companies evaluate their overall business operations.
   [Unspecified new jobs.]

2. $250m project will consolidate MIT's Sloan School [of Mgmt] - Plan calls for 3 new buildings, by Michael Rosenwald, BG, F3.
   ...Plans call for...two phases....
   1. The first phase...the school hopes to complete by early 2006....
      
   2. The second phase...is on a 10-year time frame as the administration works to raise funds....
      [The second-richest B-school in the world needs to worry about funds?! Anyway, unspecified new jobs.]

3. China: Steel venture, by Craig S. Smith, NYT, W1.
   ThyssenKrupp of Germany and the Baosteel Group of China will officially open a $1.43B stainless steel manufacturing plant in Shanghai this week, representing one of the largest foreign investments yet in the country....
   [Unspecified new jobs.]

1. [a glimmer of rhetorical hope -]
   Bush lauds firms that haven't laid off, AP via BG, E7.
   WASHINGTON - ...Bush praised companies that have decided against laying workers off during difficult economic times, saying Friday it was "the right thing to do during this national emergency." His audience included executives who have cut thousands of jobs.
   Bush, addressing about 200 business, technology and agricultural leaders in the White House East Room, said his administration was deeply concerned about those who have lost jobs amid the slumping economy, and he pledged to "take the appropriate actions" to help them....
   [Too bad he has absolutely no idea how to help them apart from the Democrats' bandaid micromanagement a la impotent New Deal and its successors, or the Democrats' world wars, and too bad he doesn't realize that the layoffs themselves are the slump-inducing agents - when we should be trimming hours (timesizing), not jobs, and sharing the vanishing market-demanded work.]

2. [a glimmer of intelligence -]
   A new kind of crisis?, David Warsh, BG, E2.
   ..."Inasmuch as this is the first full-blown recession in this modern-day era of globalization," Stephen Roach of Morgan Stanley wrote from Tokyo last week, "the contractions around the world now seem to be feeding on one another.... It's not at all clear what can break this chain of events." (A Web site, *www.prudentbear.com, provides "the one-stop shop for the bear case.")
   [Roach did the big flip from Cock Roach to Jock Roach in the mid-90s, from cheering downsizing to deploring it when a relative of his got the axe, but he still doesn't seem to "get" downsizing's direct role in causing and carrying economic contraction, nor the alternative that makes it all so stupid and unnecessary = timesizing. At least he's now eshewing cheerleading and trying to slap people awake to the seriousness of the whole thing. And here's another dose of smelling salts -]
   The most recent analyst to warn about the possibility of hard times ahead should raise some eyebrows. He is Paul Samuelson of MIT. At 86, Samuelson is about as wise an old sage as can be found.
   [We wouldn't say that. As recently as the 13th edition of his sacrosanct Economics principals text (1983), the last we've bothered with - and probably in any later editions - he perpetuated the blather about the multiply-misnomered "lump of labor fallacy," when virtually all other economics texts had dropped it. The critical guru on lump-of-labor is *Tom Walker of British Columbia, but in brief, "lump of labor" tries to ridicule shorter-hours advocates on the grounds that, given an unspecified timeframe, market-demanded employment is infinite, not limited (i.e., a "lump") - so we don't have to share it. Never mind that anything is infinite in infinity - unfortunately in the real world, we're dealing with specific timeframes, especially short-term ones (Marshall's "market term"), and in the short term today, market-demanded employment is not only limited, it's shrinking. There are always spots in the economy where it's not shrinking, e.g., "Agencies facing a labor shortage - Mass retirements expected in D.C.," by Malia Rulon, AP via today's Boston Globe, G1, but new jobs created in upsizings reported in the NYT and BG are running at less than 10% of jobcuts as of today (163,267 new jobs to 1,663,591 jobcuts year-to-date). Now granted they report the bad news more fully than the good news, but if the good news about market-created new jobs were so great, we wouldn't be in a downturn, would we, and we wouldn't again be talking about government intervention with government makework not far behind. So all the cavalier dismissals of jobseekers' plaints - "Oh they'll can get another job if they really look" - are a trifle out of touch.]
   It was Samuelson...
   • who in the 1940s wrote the text that introduced Keynesian economics to the Western world,
     [Yeah, but it had two precursors - Keynes' own "General Theory of Employment, Interest and Money" in 1936 and Rex Tugwell's "Industrial Discipline and the Governmental Arts" in 1933, which supposedly rebutted the "share the work!" forces led by Art Dahlberg with his "Jobs, Machines and Capitalism" in 1932. (But really merely benefited from Big Brother stepping in, incarnate in FDR, to overwhelm common sense with omnipresent New Deal propaganda. See our bibliography page.)]
     
   • who in the 1960s advised Pres. John F. Kennedy
     
   • who became an active and successful investor in the 1970s
     
   • and slyly hinted throughout the 1980s that market capitalism would have triumphed over state capitalism even without Ronald Reagan.
   Recently his views have darkened somewhat...- there would be nothing unprecented about...a synchronized global downturn. It happened before: in 1931-32.
   Old-fashioned wars were good for business, Samuelson wrote in an essay.... The two World Wars and the Cold War in particular brought increased government spending and created [40-hr/wk] jobs.
   But, he says, "this time it will be different," because government spending has been squeezed for 20 years.
   ["Squeezed" during Reagan's "Cold War winning" military buildup??? "Squeezed" during the prison-industrial buildup of the 1990s???]]
   Yet to "avoid the massive depression that a pure capitalistic system would be prone to, just as used to be the case in 1929-1935," he says, strong governmental action will be required.
   [Samuelson is still innocent of the Third Way sponsored by William Green, Arthur Dahlberg, and Hugo Black in 1932-33 that resulted in the 30-hour workweek bill that passed the US Senate on Apr. 6, 1933. He can still only think in terms of Big Daddy = sugar daddy rushing in to make everything right again, a true socialist elitist. He even chickens out of tossing his cheerleading -]
   Nobody expects a 1930s-style collapse, he says, when unemployment soared to 25% and millions of home mortgages were in default.
   [Sheesh, even Roach has more guts than this, with his "It's not at all clear what can break this chain of events."]
   There is, however, a reasonable chance - one in four, he guesses - of global stagnation persisting throughout next year.
   [So what are Samuelson's three things that can break the downward chain of events before the end of next year? For that matter, what is his one-in-four thing that can break it at the end of next year?]
   "A downward spiral between sagging Wall Street and worried Main Street" may or may not occur. But...where bad consequences are possible, we should deliberately overrate the [probability] we assign to them..\..
   [Dat's why one name of this website is worstcaseplan.com.]
   we should devote more of our efforts to tracking the nightmare scenarios that might be produced by a "down bubble," Samuelson argues....
   [Dat's eggzackly wut wee'z doin' on dis heah website, Rastus - wee'z trackin' dem "nightmare scenarios" cuz dey'z sooo eazy ta avoid if'n we jess git our economy outa da dark ages and implement first-order centrifugation of income by thawing dat long-frozen pre-technology workweek of us'ns and sharing the vanishin' work and the tightenin' skills.]
   Samuelson's preference is for a measure that would reduce all payroll and federal sales taxes by 10-15% for two years.
   [Good - chopping payroll taxes stops penalizing hiring, and chopping sales taxes stops penalizing consumer spending, both of which we claim we want - but still tax.]
   That would immediately put spending money in the pockets of nearly all American families.... Accelerated tax cuts for the well-to-do instead would be rash, he says.
   Of course Samuelson has been conspicuously wrong before - just once. That was in 1944, when he [warned of postwar] "Depression Ahead" Such a flurry of [postwar] governmental activity ensued that it didn't happen: the Marshall Plan, the GI Bill, the National Science Foundation [huh? - how about the federal highways bill?!]. Sometimes crying wolf makes the wolf go away.
   [And USSR's cooling from ally to Cold Warrior sure helped too. Man, their H-bomb sure kept the rich paying that steeply graduated wartime income tax right up to JFK, and that centrifugation of income, despite the ridiculously bloated and now frozen 40-hour workweek, kept the economic "glow" of World War II's grisly labor shortage going for another full generation - until around 1970 the baby boomers began to hit the job market and to make matters worse, Mother began to hit it as well - supposedly to offset the babyboomers' negative effect on the Dad's pay but in the event to accentuate it - and then the relentless but officially denied erosion of human employment by the incessant march of technology - something never mentioned by Democrats since Dahlberg and Black back in '33. Maybe this time enough people will realize the historical impotence of the New Deal, the historical potency of workweek reduction between 1820 and 1920, and the undesirability of war to quit "fighting heaven" and just welcome-in work sharing. Timesizing is its most flexible and skill-cognizant available form.]

3. [meanwhile, along the lines of Samuelson's payroll and sales tax cuts -]
   Peaks & valleys -...Stimulus packages we'd like to see, by B. J. Roche, BG, B7, via RadioTony.
   Instead of feeding the suits at the trough, Congress should give a couple of free plane tickets and a week off to everyone who makes less than $50,000 a year. Disney head Michael Eisner, who made $72.8 million last year, could offer two-for-one admission and make those grotesque giant turkey drumsticks complimentary at his extortionately priced parks. The American people can do the rest!....
   [And RadioTony's added notes on the email whereby he alerted us to this gem (Tony Schinella dba RadioTony is, like Warsh and Timesizing.com, also based in Somerville MA -]
   
   • How about limited credit card interest rate to say, 10%, in an effort to stimulate the consumer economy? It would be easy to do, just dust off those usury laws from the 1950s that haven't been enforced. Not only could people pay off their bills faster, but those who shop via debt, can do so cheaper.
   • How about implementing the Humphrey-Hawkins full employment act to make sure all the people being laid off have some sort of job?
     [We're all for that - but it would require timesizing to avoid a repeat of the New Deal's purely feel-good jobs programs.]
     
   • There's billions for airline bailouts and corporate giveaways masquerading as a stimulus package, but there isn't any money for accessible housing construction, expansion of public transportation, or street sweepers?
     [And with a timesizing-based recovery and sustainable boom, we could phase the government out of housing instead of getting it more deeply enmeshed.]

1. 2 UPsizings, unspecified new jobs -
   1. Start-up to get $45m, by Simon Romero, NYT, C5.
      Flarion Technologies, a start-up wireless technology company based in Bedminster, NJ...has received $44m in equity financing from a group of investors that includes Cisco Systems, Pequot Capital and Nassau Capital. The success of Flarion...in securing financing comes as venture capital for new telecomm and wireless companies is scarce. Flarion...has...new technology that allows mobile communications companies to provide high-speed Internet access at a lower price that competitors using existing technological standards.
      [Unspecified new jobs.]
   2. Financing OK'd, by Peter Howe, BG, C7.
      InterGen, a privately held electric power plant developer based in Boston...closed financing for a 1,100-megawatt gas-fired power plant to open near Luther, Okla., in mid-2003. Citibank, Salomon Smith Barney and Dresdner Kleinwort Wasserstein led the Redbud project financing.
      [Unspecified new jobs.]

2. First Boston bankers agree to big concessions on pay packages, by Patrick McGeehan, NYT, C7.
   John J. Mack, the new CEO of Credit Suisse First Boston [CFSB] has persuaded about 100 investment bankers to tear up employment contracts that guaranteed them large pay packages regardless of the company's profitability, company employees said.
   [Will wonders never cease? - he got bankers to part with money!]
   About 95 out of 100 bankers agreed to take significant pay cuts for this year and to give up guarantees of future pay as part of Mr. Mack's effort to restructure First Boston, the NY-based investment banking arm of the Credit Suisse Group of Switzerland.
   [So, what did Mr. Mack give up?]
   Those who did not agree will be leaving the firm, the company employees said....
   [Flexible pay, especially downwardly flexible, is best administered with corresponding workweek adjustments. When it's applied to bankers and executives, it attacks economic downturn at its root, the concentration of income beyond spendability. But like charity, this approach is still too arbitrary and unreliable to bother with in a serious economic design.]

• [1 UNtakeover]
  Terayon Communication Systems Inc., NYT, C4.
  ...Santa Clara, Calif., a maker of cable modems, spun off its chip-making unit, now called Imedia Semiconductors....

10/20/2001  the good word today -

• Netherlands: Marijuana legalized for medicinal purposes, Reuters via Boston Globe, A3.
  AMSTERDAM - The Netherlands, known for its permissive attitude toward drug use, yesterday became the second country, after Canada, to allow medical use of marijuana. Marijuana use is widely tolerated here but is not legal. The Dutch Cabinet agreed yesterday to change the law to allow doctors to prescribe marijuana and chemists to supply it....

1. [1 UPsizing]
   Etc...eToys.com, Boston Globe, C2.
   ...which went bankrupt in March, is open again with a new owner, Pittsfield-based K-B Toys....

2. California: Law on morning-after pill, Reuters via NYT, A15.
   Gov. Gray Davis has signed legislation making the state the second, after Washington, to allow pharmacists to sell so-called morning-after contraceptive pills without a prescription. The new law goes into effect on Jan. 1 and sets no minimum age for those acquiring the pills, which prevent a fertilized egg from implanting itself in the uterus if taken within 72 hours.
   [Higher quality humans from higher quality children from wanted, not unwanted, pregnancies. We integrate the three population variables (imports, immigrants and births) into Phase Five of the Timesizing.com program.]

1. 2 UPsizings, 12 +?? new jobs -
   1. Ad agency picks up workers, business, by Chris Reidy, BG, C9.
      Days after Holland Mark Advertising closed its doors, about a dozen of its 50 staffers [we counted 55 on 10/16 #8] and several of its clients migrated to another Boston ad agency, Partners & Simons....

   2. [Railfans ahoy!]
      Train to Portland returns - Amtrak: Dec. 14 will be first run, by Raphael Lewis, Boston Globe, B20.
      Thirty-six years since the last passenger train made its way from Boston to Portland, Maine, 'The Downeaster' will return to the rails in time for the winter holidays, Amtrak and Maine officials will announced today.
      The train, which was supposed to begin running in 1993, will make its inaugural run on Dec. 14, and begin regular service the following day, acting Amtrak chairman [and former Massachusetts governor] Michael S. Dukakis said....
      [Better late than never.]
      It will be a moment that some thought would never happen. Maine's voters pushed to get the service on a ballot referendum in 1990, and a year later, the state's legislature voted to fund the project. But problems arose immediately. The tracks needed a complete overhaul, and to this day, the company that owns some of the corridor, Guilford Transportation Industries, remains unconvinced that the train should travel faster than 59 miles per hour. \However\ Michael J. Murray, exec. dir. of the Northern New England Passenger Rail Authority...spent more than a decade planning and coordinating the return of the train [and] is confident the Surface Transportation Board will authorize The Downeaster to go 79 mph, thanks to the recent successful testing of the line between Portland and Plaistow NH, which Guildord controls..\..
      The Downeaster will make four round trips daily between Portland and Boston's North Station....
      [Would you believe that Boston still has no rail link between its North and South Stations?!! Hooboy.]
      Resumption of the service comes as travel-related businesses continue to feel the negative effects of [9/11] which weakened the airline industry.... Nationwide, train travel is reaching levels not seen since The Downeaster's whistle last blew. By the end of September, the last week for which statistics were available, Amtrak's ticket sales were up 7% nationally, and 36% on the high-speed Acela Express, which runs between Boston's South Station and Washington....
      [Hey, air's loss is rail's gain.]
      Initially The Downeaster will make stops in Haverhill MA, Exeter and Dover NH, and Saco and Wells ME. Other stops being planned include weekend trips to the University of New Hampshire at Durham during the school year, and to Old Orchard Beach in summer.
      [Eh, vous québecois, allez-vous-en! Nous venons en masse par chemin de fer de Boston pour occuper votre plage!   OOOOkay, vous pouvez demeurer si vous nous apportons une tartelette au beurre délicieuse par personne de la belle province.]
      The line may also be extended to Freeport, Brunswick, and Lewiston/Auburn.
      A one-way ticket for the 2½-hour ride from Boston to Portland is $21; a roundtrip ticket is $35.... For more information..., log on to *www.thedowneaster.com.
      [Bottom line: Unspecified new jobs.]

2. [1 UNtakeover -]
   Titan will spin off its food-treatment unit, Bloomberg via NYT, C4.
   The Titan Corp., a satellite communications and information technology company, [will] spin off its SureBeam Corp. food-treatment unit to shareholders...as soon as possible after receiving approval [from the IRS]. SureBeam, which is based in San Diego, makes a device that treats meat, poultry and fruit to kill harmful bacteria.

3. Proposal tries farm money to necessity, not acreage, by Elizabeth Becker, NYT, A18.
   WASHINGTON...- The ranking Republican senator on agricultural issues [yester]day unveiled a new farm bill that would give subsidies to famers based on need rather than acreage. Senator Richard G. Lugar, R-Ind., introduced this far-reaching change in policy with the full support of the White House.... "We're trying to level the playing field for all working farmers," Mr. Lugar said....
   [Not to mention cutting the corporate welfare alias welfare for the rich. But this is probably going to call forth all the vultures and vampires of mega-agribusiness's lobbying army.]