Good News, Oct. 16-31, 1999
[Commentary] ©1998,1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
10/30/99 5 glimmers -
10/29 3+2 glimmers -
- A French town's story, letter to editor by Mary Dale Allen of Briarcliff NY, NYT, A26.
Robert Daley is writing a novel about Le Chambon-sur-Lignon (Arts pages, Oct. 27), the French town where Protestants, led by their pastor, André Trocmé, shielded thousands of Jews from deportation during World War II. But Philip P. Hallie's 1979 book, "Lest Innocent Blood Be Shed," is a far more compelling [non-fiction] page-turner than any fictionalized account could be. One man's ability to live up to what he preached and...galvanize his community to do the same is the true love story.
We need this story so badly in today's world.... It is a story about good overcoming evil - no matter which religion. Like all good stories, it is simple, it is beautiful and it is true.
- [Hi tech bosses give Washington a talking-to.]
Politics and Silicon Valley - Liberty.com - The rise of America's high-tech industry is not just a windfall for presidential hopefuls. It could also be a godsend for the liberal political tradition, The Economist, 23.
[Or whatever needs to replace the rather outworn liberal political tradition (and it ain't the even more tired conservative liberal tradition).]
...Some political bosses are already [telling] politicians to get their act together.... The high-tech industry is beginning to realise that it is doing nothing less than "defining the economic structure of the world," said Eric Schmidt, the boss of Novell..\.. Andy Grove, the head of Intel, has told congressmen that the Internet is about to wipe out entire sections of the economy - and has warned them that, unless politicians start moving at "Internet rather than Washington speed", America may see a repeat of the social disaster that followed the mechanisation of agriculture....
[We think there's no hope of that. We need to get going on Bucky Fuller's vision of 24-hour telephone (and email) referendums - we have the technology. And as for high tech "defining the economic structure of the world," the truth is more that it's bringing about so many new and huge vulnerabilities that it's becoming a major pressure toward DESIGNING a more robust, flexible, versatile and loooong-term economic structure, and our entry is Timesizing.]
- McCain gains momentum, leader (to article p.A10), NYT, front page.
After a strong showing in a Republican candidates' forum and in polls that show him gaining on [the bought&paid-for candidate], Sen. John McCain is having fun on the stump.
[Our only chance to restore democracy, apart from maintaining pressure for campaign finance reform and expanding initiatives and referendums as fast as we can, is to vote for the more-outside, less-money, candidates, and that means McCain, Bradley, and whoever the Reform Party comes up with.]
- Auto workers' raise, AP via NYT, B14.
AUBURN HILLS, Mich., Oct. 29 - DaimlerChrysler said today that it had given a 5% pay increase to 1,300 nonunion employees at a Mercedes plant in Alabama, following the company's national contract with the United Automobile Workers union....
[A little wealth-centrifuging is always good (actually a LOT is good) - "the less concentration, the more circulation"....]
- Tyco shares fall again after new questions about accounting - Have methods in a $30b acquisition spree been too aggressive?, by David Leonhardt, NYT, B3.
Shares of Tyco International fell almost 9% yesterday after a report raised more questions about the company's accounting practices. The report, a column by Floyd Norris in The New York Times yesterday, said that Tyco had failed to inform investors about charges taken by two companies shortly before Tyco acquired them, thus inflating Tyco's earnings....The stock has fallen about 25% in the last three weeks.... On Oct. 10, a Dallas investment manager, David W. Tice, sent a letter to his clients saying that Tyco had taken big charges associated with its acquisitions and that its cash flow was not as strong as many believed.... On Oct. 14...Dennis Kozlowski, Tyco's chief executive, told Wall Street analysts that Mr. Tice's report lacked merit and that Tyco was in excellent condition. Mr. Tice has stood by his analysis.
[One can only hope that Wall Street will wake up to the longer-term toxicity of consolidation before we do a complete repeat of 1929. Kozlowski's like Chainsaw Dunlap. He can't manage to save his life; he can only do takeovers and layoffs.]
10/28 4 glimmers -
- [Comforting to have the Fed chairman belaboring the obvious.]
Greenspan calls recent rate of U.S. growth unsustainable, by Richard Stevenson, NYT, C6.
[But will he ever pull off the kid gloves and call the GDP what it is? - irrational! The GDP, our way of measuring growth and progress is irrational. It gives points for all kinds of bad stuff, like medical services for black lung disease instead cleanup of mining worksites. Full critique in Daly & Cobb's "For the Common Good." Cobb suggests a better growth&progress measure, the ISEW (Index of Sustainable Economic Welfare) which only gives points for good stuff, but all we really need right now is an unemployment rate that really counts the whole problem of non-self-support in our economy (see "deep-structure issue" #2 halfway down our electronic democracy page), and so includes welfare, disability, homelessness, prisons, forced part time, forced self-employment (regardless of clients)....]
- [The little guys get their say.]
Small employers describe health insurance concerns, by Robin Toner, NYT, C8.
The rising cost of health insurance is hitting small employers particularly hard, with premiums for the smallest companies rising 9.2% last year, according to a new survey.
[Quiz - what issue clobbered the Clintons' national health-insurance proposal when they first came into office?]
Researchers said this was once of several ominous trends in employer-based health insurance. "The fact that we really haven't seen any [increase] in the percentage of employers offering coverage during an all-time boom economy is cause for worry," said Drew Altman, president of the Kaiser Family Foundation, the health insurance group that co-sponsored the survey of 1,939 companies. "This is as good as it gets."
[And that ain't good.]
...[Only] 60% of all small firms offered their employees health insurance in 1999, a percentage that was statistically unchanged from 1996, the survey found. [In contrast, virtually 100% of] big employers - defined as those with 200 employees and more - offered health benefits.
[Well, there's a backhanded benefit of takeovers - large companies merged from small can then afford health insurance for whatever employees survive the downsizing.
[Another angle we'd like to see surveyed is the percentage of part-timers who have health insurance, which is usually available, even at big firms, only to full-time employees. (And for salaried workers, "full time" often soars above 40 hrs/wk - unpaid.) Many parents who'd rather spend more time with their children are forced to work "full time" just to get health insurance. This is one of the big problems with employer-based health insurance and one of the big advantages of citizenship-based health insurance (state/province-based in Canada or nation-based in Britain). Juliet Schor discusses this in her book "The Overworked American."]
- TWO upsizings! and one UNtakeover
- Bell Atlantic Corp., NYT, C4.
...New York, joined a Labor Dept. program to hire at least 2,000 employees in the next year through a program to place welfare recipients and people with disabilities in union jobs.
- Sears, Roebuck & Co., NYT, C4.
...Hoffman Estates, Ill., plans to open 15 more Great Indoors home decorating outlets in the next 18 months.
- Justice Dept. challenges Viasoft deal, Bloomberg via NYT, C4.
...Compuware Corp.'s proposed $168m purchase of the Year 2000 software maker Viasoft, arguing the transaction would mean higher prices for mainframe software.... The Justice Dept. said the two companies were head-to-head competitors for mainframe testing.
[Mainframe testing?! Who cares! Nobody USES mainframes any more. Where was the Justice Dept. last March 15 when our biggest Massachusetts bank (Fleet) was buying its only major competitor (BankBoston)???]
10/27 2 more glimmers -
- Seeing green in the convention center - Environmentalists push to make giant building a showcase for cutting-edge energy technology, by Peter Howe, Boston Globe, C1.
By several measures, the proposed $700m convention center in South Boston will be New England's single-largest building. But some environmentalists also hope it will be one of the "greenest." The roughly 15-acre roof over the main section of the building, for example, could support enough photovoltaic cells to provide one-third or more of the building's electric demand. Likewise, the roof could collect enough rainwater to supply the cooling system, landscape irrigation, and even its toilets.... Besides saving on lighting bills, greater use of natural light should also help hold down the use of power for [air conditioning], because there will be less lightbulb-generated heat to disperse....
In early July, CLF [*Conservation Law Foundation], convention authority officials, and a passel of building-design and energy specialists held a two-day symposium on incorporating "sustainable design" elements into the plan.... The air was filled with ideas, all the way from installing a cutting-edge fuel cell onsite to generate power for the center with low emissions, down to chaing the size and alignment of pumps and pipes in the cooling system to maximize efficiency.... The convention center in Munich sports a huge array of photovoltaic [PV] cells on its roof that generate 1,000 kilowatts of electricity, which is said to be the largest rooftop PV array in the world. "We could easily end up with one even bigger here in Boston," [said Richard Kennelly, an attorney with the CLF].
Specialists...said the Boston convention center could easily support units generating 2,000 KW, or 30%, of the center's power load. One bonus to PV cells is that on blazingly sunny summer days when air-conditioning demand soars, the sun would provide even more power to run the air conditioners. Energy specialist William Browning [of the *Rocky Mountain Institute] said more use of daylight instead of fluorescent bulbs can [also] be sold as...a way to create a more enjoyable experience for convention-goers [- to] make you feel like you are connected to Boston [instead of just in a big enclosed space that could be anywhere]....
- Variable-price coke machine being tested - Coke testing a vending machine that can raise its [own] prices - Consumers would pay more when demand is highest, by Constance Hays, NYT, C1.
Taking full advantage of the law of supply and demand, the Coca-Cola Co. has...begun testing a vending machine that can automatically raise prices for its drinks in hot weather...simply through a temperature sensor and a computer chip.... Some vending machines already adjust their prices based on the temperature outside, using wireless modems....
[We think it would be smarter to key on frequency or infrequency of use, and proximity to last-stocked unit. We see this kind of pricing spreading throughout the economy and providing the advantage of spreading or evening out demand. Restaurants, for example, would have electronically changible menu prices, in whole and in part, depending (in whole) on the number of people waiting for a table. The effect would be to reduce queues and convert time cost for customers into dollar cost, - overall a time-saving measure.]
- [1 UPsizing. Here's a switch - a takeover that resulted in adding jobs - but not very many.]
German drug giant to boost Cambridge [Mass.] lab - Hoechst to add  jobs, tabs [doesn't he mean "taps"?] Ariad as its top genomics site, by Ronald Rosenberg, Boston Globe, C3.
Hoechst Marion Roussel, which this month gained control of its joint venture with Cambridge-based Ariad Pharmaceuticals Inc., will boost its local genomics presence and expand employment at Ariad to 100 from 65 by late next year....
- [1 UNtakeover. The good news - they're fighting takeover. The bad news - they're downsizing, not timesizing.]
Under siege, NatWest to cut jobs, businesses - But hostile bidder scoffs at plan, by Bruce Stanley, AP via Boston Globe, C2.
[And the less informative & got-it-backwards headline of the Times' version - ]
Market Place - Natwest's hostile bid for the Bank of Scotland is turning out to look like an overly long soap opera, by Andrew Sorkin, NYT, C11.
[Ouch, what a mistake! BofS is bidding for NatWest, not NatWest for BofS!]
...Analysts said Natwest's [takeover defense] plan was a bit contradictory, because in many ways it mirrors the Bank of Scotland's plan to squeeze $1.7b in savings and value out of the bank, Britain's 3rd-largest, by selling off assets and laying off employees....
[Yes folks, out there in the bizarre "real world," we get all combinations and permutations. Takeover then downsizing. Takeover & simultaneous downsizing. Downsizing in advance of takeover. And now, possibly the most bizarre of all - downsizing to prevent takeover (i.e., to prevent forced downsizing!). As Grannie Hyde would say, in her gentle Nottingham accent, "That's cutting off your nose to spite your face."]
10/26 2 glimmers -
- [Science or cheerleading?]
Dow takes on a new, high-tech look - A move to make an index more like the American economy, by Floyd Norris, NYT, C1.
The Dow Jones industrial average, whose performance has trailed the S&P500 in recent years, dropped 4 lagging stocks yesterday [Sears, Goodyear, Chevron, Union Carbide] and substituted 4 companies that have done much better [Microsoft, Intel, Home Depot, SBC Communications].
[That's the good news - the Dow has finally entered the 1990s. Now the "but" - ]
By adding two high-flying technology companies...the editors of The Wall Street Journal, who determine the index's components, made it likely that the Dow will be more volatile than it has been. Whether it will also be a better performer is likely to turn on the question of whether large technology stocks remain market leaders.
[Which in turn hinges on whether we're in a stock bubble or a solid stock boom. I.e., are we concentrating work and spending power & starving our own consumer markets via "The more concentration, the less circulation" syndrome? Ça, c'est la question.]
- [1 more UNtakeover - ]
Bank rejects takeover bid, by Henri Cauvin, NYT, C4.
One of South Africa's biggest banks, Standard Bank, has rejected a $4.4b takeover bid by a smaller rival, Nedcor, saying the proposed stock merger undervalued Standard....
[Here's hoping Standard has some principles at stake and isn't just hinting for more gravy.]
10/25 2 "BGOs" (blinding glimpses of the obvious) and 1 "sighted man in the land of the blind" -
- [1 UPsizing]
Uno plans to open 175 restaurants in 5 years, by Steven Wilmsen, Boston Globe, D9.
Uno Restaurant Corp...operates 160 restaurants in 29 states, ...DC, Puerto Rico, and Seoul.
- [1 UNtakeover]
Bank merger vetoed, Bloomberg via NYT, C6.
Norway rejected a $3.1b bid for Christiania Bank from a foreign rival, Meritanordbanken of Finland, to insure that the nation's second-largest bank remains under domestic control....
[Glad someone in the world still has some sense amidst this unparalleled merger mania! Massachusetts regulators sure haven't (in re Fleet-BankBoston).]
10/23 2 glimmers -
- Digital commerce - Some executives fear the Internet economy is a big Ponzi scheme - In the Internet rat race, greater value seems to be put on devising the next business plan than on making it work, by Denise Caruso, NYT, C4.
...Ann [Winblad's] firm has reviewed as many as 1000 business plans in a single month, and looks at 5000-7000...a year..\.. "MBAs aren't going to class anymore; they're taking two-year sabbaticals to write business plans," said Ann [a partner in] Hummer Winblad Venture Partners in San Francisco....
- [And case in point - ]
Quiet, please: test in progress, by Matt Richtel, NYT, C4.
It has been three months since IBM and major record labels began the experiment: selling albums over high-speed cable modems in 1,000 households in metropolitan San Diego.... The trial lets record companies sell albums directly to consumers' homes over high-speed Internet lines. After paying for and downloading music, the consumers can transfer the songs from their computer to compact disks using so-called CD burner technology, effectively creating their own home-grown CD's..\.. But efforts to assess the music test's progress have met the sound of silence. The companies have effectively imposed a publicity blackout....
[In this case, we think "no news is bad news," i.e., they sold 2 albums in 3 months. How much time do YOU have to fool around downloading music and manufacturing your own "one-off" CD - with no readymade title or booklet with pictures etc. just because (ooo it's sooo high teeeech!) it comes over a "high-speed cable modem"? This is really a stupid idea where the vendor is holding all the cards and basically wants the customer to pay for the major inconvenience of doing a lot of his (the vendor's) work. We think this is a case where Marshall McLuhan is wrong - the "medium" is NOT the "message." And we have company - ]
...Some analysts and competitors [have given rise to] rumblings in the industry that the project [like so many Internet business plans, e.g., Amazon.com's] simply is not living up to the organizers' vision [in this case] of a 21st-century music delivery method that protects copyrights.
[Like we said, this system is dandy for the composer, musician, producer and vendor, but just one little detail - it's a drag for the potential listener/customer.]
And since the effort began in June, the participating record companies, including the industry giants Universal and BMG, have begun pursuing technologies other than the IBM system.
[But Big Blue lumbers on - ]
What IBM has said is that..\..the participating companies did not want the news media to influence the buying patterns of the San Diego customers....
- [One sighted man in the land of the blind - ]
Cable and Wireless evades the whirlwind of mergers, by Andrew Sorkin, NYT, C4.
...[in] the broader telecommunications industry..\..since February...in the United States and Europe.
"I have no interest in that,"...said..\..Graham Wallace, the chief executive at Cable and Wireless of Britain..., blithely waving his hand. "Sure I get calls every day. And I tell them the same thing. I say that we have a completely viable stand-alone strategy."... Meanwhile \he\ has been busily trying to put his company's house in order....
[In other words, he's been "Takin' care o' bizz nezz"! - unlike most of his lazy, real-business-avoiding, crisis-oriented, merge-crazy peers. "Whirlwind" nothing! - it's like that nature film showing zillions of little squids schooling along, mating mindlessly neath the moon.]
10/22 2 glimmers - 1 vital long-term history lesson & 1 upsizing -
- Canada's air traffic control towers go private - Sale of air traffic system has led to technical advances - An experiment in aviation draws interest from the United States,
by Matthew Wald, NYT, B1.
TORONTO - ...In 1996, Transport Canada, the Government agency that had run the air traffic system for decades, sold it to a nonprofit company created by Parliament whose directors represent airlines, general aviation, unionized workers and the public. Most constituencies think the new arrangement is going well, though controllers are having some second thoughts.
When the idea was introduced, controllers, who had endured a wage freeze for years, were eager to become employees of a private [nonprofit] company. Airlines, upset at delays and at the Government's use of taxes collected on air fares for nonaviation purposes, were also ready for a change....
[Now, ] controllers are happy with the pay increases but say that management has become tougher.... The union's president, Fazal Bhimji, said the number of grievances had jumped to 80 this year from 14 in 1998, adding that controllers had hoped for a more collaborative system. "54% voted in favor of privatization, but if we had the vote today, I'm not sure it would go through," he said.
But even Mr. Bhimji is impressed with the new technology, a key area that has been a longtime weakness for Transport Canada and the F.A.A..\.. Nav Canada [is] the only private company in the world to run a national air traffic control system, and [it is using touch screens and other] new techniques...to bring computers and software into service....
NAV Canada [from charts] has
[Sounds good, but the data source here is Nav Canada and the critical question is left unanswered - "Has safety been maintained?"]
- cut its payroll from 6300 in 11/96 to 5400 in 4/99
- lowered the cost of flying in Canada from old system $528m to Nav Canada system $355m [Canadian $$?]
- raised salaries from average annual old system $43,316 to Nav Canada system $57,530 [Can. $$?]
- increased its productivity from 258 total flights per employee in FY97, thru 310 in FY98, to 341 in FY99 (ending 8/31)
- [1 takeover challenged - ]
Utility acquisition challenged, Boston Globe, A11.
National Grid Group PLC, the United Kingdon transmission-system operator, said its $4.6 billion buyout of New England Electric System is being challenged by Northeast Utilities, New England's largest power company. The US Nuclear Regulatory Commission, acting on a request from three Northeast subsidiaries, granted a hearing to determine whether the purchase would violate foreign ownership restrictions.
[So what business is it of New England Electric's?]
New England Electric has stakes in two nuclear plants that are controlled by Northeast....
10/21 6 glimmers of hope -
- [NY Times finally looks back beyond 1945 for some vital financial history - ]
Fed learns bartenders [happytalk & lower rates] are more popular than bouncers [warnings & higher rates], by Floyd Norris, NYT, C1.
[Our main commentary on this is back on 9/25/99 "Trapped by the bubble," but we also have a quickie below on 10/16 "Big sell-off caps Dow's worst week since October '89".]
...How dare [Greenspan] raise interest rates! Who is he to question the stock market's valuation? ...The Fed chairman during the...1950's and 1960's [William Martin] once said that that the role of the Fed was "to take away the punch bowl just when the party gets going." Mr. Greenspan is learning what happens to Fed officials who wait too long to try to grab the punch bowl. The revelers resent it. ...Deep into the biggest bull market ever, more and more investors believe that 20%+ annual stock market gains are a birthright.
Seventy years ago , another generation of Fed officials learned the same lesson [too late]. [Early] in 1929, the Fed had the gall to tell banks to reduce lending to stock speculators. The stock market plunged, only to rally after...the president of National City Bank...today's Citibank..\..Charles Mitchell...defied the Fed and said lending would continue. Mitchell "saved the day" and averted calamity, said The Financial Chronicle, a Wall Street publication. The Fed, it added, "can act the part of a bull in a china shop and cause a lot of destruction and damage [and] Samson-like, it can pull the whole financial structure down about its head. But that is no reason why it should not be checked in the attempt by those who would be involved in the ruin."
The Fed quickly lost its nerve. The stock market rallied more than 30% from the March lows brought on by the Fed's effort to slow speculation. Then [Oct. 29/29] it crashed.
Mr. Greenspan and his colleagues at the Fed face a difficult situation now [described by The Economist on 9/25 as "Trapped by the bubble"]. There is scattered evidence [it's only "scattered" because nobody has systematically collected it!] that the economy is slowing, and there is reason to believe that the current rate of growth is overstated because it reflects inventory accumulation by people and companies fearful of Year 2000 glitches [and worse, just not finding the markets]. Both are reasons not to raise rates.
On the other side, there is equally scattered evidence that inflation is rising [only in stocks, debt, and executive pay, not ordinary wages], and there is concern over the soaring current account [i.e., trade?] deficit. A failure to [raise rates] could cause stock prices to rise to completely unreasonable levels [so now they're only "partially unreasonable"?], making an eventual crash more likely. [Raising rates], on the other hand, might scare jittery investors and bring on a crash.
[This is a nice restatement of Greenspan's dilemma as described in the 9/25/99 Economist under "Trapped by the bubble." Basically, Greenspan is in a "damned if you do, damned if you don't" Catch 22.]
Back when people remembered 1929, it was taken for granted that the Fed should act to rein in a frothy [ie: inflated] stock market. It raised the margin requirement - the amount investors had to put down to buy stocks - when markets were high, and cut it when share prices were depressed. The last change, from 65 to 50% in 1974, came during a severe bear market.
[And nobody's raised it since? Hoo-wah, somebody's been asleep at the switch or unduly influenced by political incumbents! Oh, here's the "explanation" - ]
Because it no longer pays attention to margins...
[...just as it no longer pays attention to marginalized employment. There was a story focused on this margin requirement tool on 9/05/99, "Finding the steam valve on an overheated market" by Louis Uchitelle, NYT, Sec.3, p.4. Perhaps the Fed thinks this tool is as outdated as the Glass-Steagall banking law and other regulations that were designed to prevent another big bubble&pop such as introduced the "Great Depression. The fact is, stock traders are among the most vulnerable people in the world to pollyanna self-delusion. For example, we call the 1930s the "Great Depression" but there were plenty of depressions before that and, guess what, they were all forgotten. The same has happened today. And again, "those who forget the lessons of history are doomed to repeat them."]
...the Fed has created the impression that stock prices are irrelevant and that [CPI alias commodity price] inflation is the only reason to apply economic brakes [by raising rates]. Without clear evidence of [commodity] inflation, Mr. Greenspan risks losing popularity if he keeps raising rates. [Then how about raising margin requirements?!] Seventy years ago, the Fed backed down under attack from the party crowd. Will Mr. Greenspan do the same?
[Too bad his self-impoverished menu of options (we're down to only 2 now, it seems) only includes triggering a smaller bubble-pop earlier or letting things ride for a bigger bubble-pop later. 'Course, he could "pull a Coolidge" (or a "Louis XV") and get out before the le déluge.
[We recommend a better 3rd alternative. Why not solidify the bubble by centrifuging stock inflation into domestic consumer markets via ordinary (not just top executive) wages? How do you do this? First by enforcing existing overtime laws at the 40-hour level. Then by establishing automatic reinvestment of corporate overtime profits in OJT (on-the-job training) and hiring (eg: by a steep overtime tax with an exemption for reinvestment). Then by introducing automatic reinvestment of individual overwork earnings (= cumulative overtime from all sources) in OJT and hiring. Then by gradually adjusting the workweek downward so that overtime/overwork starts earlier in the week and more reinvestment in training and hiring occurs. How does this "centrifuge stock inflation into dynamic consumer markets"? By reversing the marginal utilility of wealth ("the more concentration, the less circulation"). How? By reducing the gross and growing labor surplus and engaging market forces to raise ordinary wages and benefits, same as occurred to produce the solid economic boom after the Black Death of 1348 or during practically every war. Except by enforcing and reducing a maximum workweek, we're engineering an economy-dynamizing shortage of labor in a lot less wasteful and brutish way than our usual techniques (plague or war). Did we mention we call this approach Timesizing?]
- [1 UPsizing]
Banta will open 3 plants to service order from Compaq, AP via NYT, C4.
...[Wisc.-based] Banta Corp. plans to open plants in Houston, Singapore and [Amersfoort,] the Netherlands and hire about 700 workers.
[Interesting locations, respectively bad, middling and great for employees. Are they running an experiment to see who's the most productive? Should be interesting.]
Banta...is making the moves after getting an order of $600-800m from Compaq Computer to configure, test, package and ship Compaq hard drives and other storage components.... The plants...will be in full operation by next spring.
10/20 8 glimmers of hope (big day!) -
- Indonesia chooses an Islamic cleric [Abdurrahman Wahid] as new president... - Surprise vote caps comeback in first democratic transfer of power in the nation, by Seth Mydans, NYT, front page.
[Hopefully a clergyman will eradicate all vestiges of genocidal foreign policy toward newly independent East Timor.]
- Trade deficit narrowed in August as exports grew, by Robert Hershey, NYT, C1.
Reflecting some long-awaited gains from economic recovery abroad, the huge American trade deficit narrowed in August for the first time in four months as exports rose faster than imports.... The latest [Aug.] tally showed a gap between exports and imports of $24.1 billion, down from $24.9 billion in July. With economies in Asia, Latin America and Europe on the mend...
["Don't count your chickens...!"]
...demand for American exports of goods and services is finally improving.... At the same time, however, the U.S. deficit with China soared to $6.9 billion, the largest ever with any country, from $6.3 billion in July. This prompted a fresh expression of unhappiness in Washington....
[A timesizing economy where overtime automatically triggered reinvestment in training and hiring and where the onset of overtime each week (the maximum workweek) was automatically adjusted from month to month to offset the nation's dependency rate (unemployment +welfare +disability +homeless +prisons +forced part-time... - if dependency rose or was too high, the workweek would gradually shorten to share market-demanded employment across everyone) would render trade deficits harmless. Only our current conduct of the economy with chronic labor surplus and skill shortage makes us afraid of trade deficits because of their destructive effect on domestic jobs and employment. But Timesizing splits employment from jobs. Jobs can disappear and employment remains high, because we're sharing the employment via an adjustable workweek, instead of freezing the workweek at some arbitrary figiure (currently 40 hr/wk in theory, more in practice) and letting employment go down with jobcuts. Obsoleting downsizing of jobs with timesizing - sharing the employment however little there is - consigns worries about trade deficits to the dustbin.]
- A new inflexibility in overhauling U.S. financial laws, by Stephen Labaton, NYT, C8.
After more than 20 years of battles...over legislation to reshape the nation's financial system, the measure's fate rests on a...symbolic fight between President Clinton and Senator Phil Gramm.... The main sticking point appeared to be whether to require community groups to divulge the details of deals they strike with banks to make loans to minorities and others commonly denied access to credit.... As the talks stretch out, the prospects of overhauling the banking system begin to fade.
[As we said yesterday, "hey, whatever it takes...." - block this UNlearning of the hard lessons of the Great Depression.]
Both sides seem to recognize political benefits in standing firm as the 2000 election cycle begins, even as the most powerful [and short-sighted] financial interests in the country clamor for a new law....
[They want things to be even EASIER for themselves?! They want to turn us into the dread Black Hole economy even FASTER?! - where 99% of the wealth of the nation is owned by 1% of the population?!! Dumb dumb dumb.]
- Judge rules grocery chain cannot use a tax shelter - Common corporate practice now in doubt, by David Johnston, NYT, C11.
A tax court judge has ruled that Winn-Dixie Stores cannot deduct interest paid on loans it took out on life insurance policies covering 36,000 of its employees in 1993, throwing into doubt several billion dollars of income tax deductions taken by hundreds of major corporations since 1987. Winn-Dixie's corporate-owned life insurance program is "a sham for tax purposes," Judge Robert P. Ruwe wrote in a strongly worded 81-page opinion reported yesterday. Hundreds of big corporations have taken out life insurance policies on all their workers and then borrowed back the premiums, creating an income tax deduction for the interest expense....
["Oh what tangled webs we weave!" It should be illegal for companies to borrow against employee benefits of ANY kind, just as it should be illegal for the Federal Government to touch the Social Security fund or include it in ANY budget talk. This is the kind of common-sense boundary-drawing that we learned the hard way during the Great Depression, and that the short-sighted, narrowly-interested (in a word, stupid) "most powerful financial interests in the country" now want to unlearn. Thank God for some courageous and common-sense judges in the land, however far from the Supreme Court!]
The companies said the deduction helped pay for life insurance benefits for their workers.
[As if companies need such help with the astronomical pay they're can afford to hand over to their top executives these days, even when they trash the company (e.g., in "golden parachutes").]
In 1996, Congress outlawed the practice.... The case, the latest in a string of victories by the IRS against corporate tax shelters, is significant because many similar programs are more aggressive than Winn-Dixie's [which] borrowed on the cash value of the policies at more than 11% interest, taking a $3.7m tax deduction for 1993....
The judge relied heavily on internal company documents... reproduced a chart that showed money...flowing in a circle between Winn-Dixie and the American Heritage Life Insurance Co. [and] quoted at length from internal memos that said so few employees died before quitting or retiring that "the cost of providing the benefit is insignificant."...
[And the private sector likes to paint itself as so innocent vis à vis convoluted government bureaucracy! Just look at the convolutions here. Truly a population can get too "sophisticated" for democracy - as we are with our cynical new plutocracy and high voter apathy - and a private sector can get too "sophisticated" for a healthy level playing field with no regulation required.]
Thomas P. Ochsenschlager [German for "oxen-goader" - appropriate here!], a tax partner with the Grant Thornton accounting firm in Washington, said that "this was a very popular shelter, but a lot of us wondered why it wasn't challenged before this." He added, "The IRS already has all the tools it needs to deal with all the crazy schemes out there, and they never seem to use those tools, but maybe that is changing."...
- [1 UPsizing - unspecified # of new jobs]
Providence [RI] plans mall, AP via Boston Globe, C10.
...In the next few months, developers are expected to begin site preparation for the $33 million Providence Marketplace...just west of the \new\ Providence Place Mall.... Developers want the marketplace...to have the feel of an oldtime village center with an open-air food market, pushcarts, and entertainers.
[Not real high-wage jobs, but at least they're not paving over fields to get them...]
The marketplace will be built on the site of the Silver Top Diner and the demolished Merchants Cold Storage Warehouse....
- [1 UNmerger -]
Shroders gives up effort to buy New York adviser [Beacon Group], Bloomberg via NYT, C4.
[The good news is, they did the study, released it & are trying to improve things - the bad news is, things are pretty bad.]
- 2.4% rise, biggest in 3 years, set for Social Security benefits, AP via NYT, A18.
...an average of $19 a month..\..beginning in January.
[Anything to counter the uncontrolled centripetal force on wealth in this economy! And it would be nice to means-test this so we could stop wasting SS benefits on Bill Gates' parents and the country's other millionaires and billionaires.]
- Political stalemate continues over banking bill - An anti-discrimination law is proving to be a major sticking point, by Stephen Labaton, NYT, C1.
[Hey, whatever it takes to prevent us from having to learn those hard banking lessons of the Depression all over again! And NO, we don't agree that things are that different now. Conflict of interest is still conflict of interest, and when you merge insurance companies, banks and brokerages, you get major MAJOR conflict of interest. This braindead attempt to repeal Glass-Steagall and "modernize" our financial industry is just begging for disaster. Example? The general access path to depression is the marginal utility of concentrated wealth. Merging the financial industries will facilitate that in an economy we already have such a top-heavy concentration of spending power that ain't getting spent, that it's already strangling the consumer markets away from its own investment targets and running on pure tulip-bubble cockeyed optimism. Doubts? Just look at Amazon.com's profits. Just today, Encyclopedia Britannica decided to give it away on the Web. And the effectiveness of Web advertising is still highly questionable. This is not a time when we should be thinking about forgetting hard-learned Depression-Era lessons. Quite the contrary!]
- Public meetings planned on bioengineered foods, AP via NYT, A21.
...The FDA begins public hearings next month to explain how it determines that a genetically engineered food is safe and to get the public's reaction. Meetings will be held in Chicago on Nov.18, Washington on Nov.30, and Oakland, Calif. on Dec. 13.
[Boy, is this overdue!]
- U.S. once deployed 12,000 atom arms in 2 dozen nations, by Judith Miller, NYT, front page.
[So how many do we have now in how many countries, Judith??]
...How the Pentagon document was declassified is a saga in itself. "It has been a 16-year ordeal," said..\..William M. Arkin, a nuclear weapons analyst and one of the...three co-authors \of\ an article based on a recently declassified document [and] co-author of a book he was working on [16 years ago], "Nuclear Battlefield" (1985). He requested the doocument under the Freedom of Information Act in 1983. The study was partly declassified two years later, but most of its annotated charts and country listings were blacked out....
[Setting aside for all the nuclear stuff in our now-neighborly gangster economy in Russia, it's easy to forget how much safer the world is today than when we "deployed 12,000 atom arms in 2 dozen nations." Still, it would be more relaxing if our intrepid reporter on this article had answered the obvious question implicit in her title.]
- Students urge colleges to join new group against sweatshops, by Steven Greenhouse, NYT, A21.
[Not a particularly effective point of leverage, compared, say, to Timesizing, but hey, certainly linked to it and - anything the kids find useful to bust out of the self-obsessed cynicism of the "Me Decade" is fine by us.]
- Nissan's planned cuts around ire and offers of help in Japan - A Government used to orchestrating the economy may be unwilling to let go, by Stephanie Strom, NYT, C4.
[And why should they, if the private sector is slipping into American-style, kamekazi, crisis-oriented, "management by self-amputation"?]
- [At last, maybe the bloodshed can stop!]
E. Timor free; Habibie quits race in Indonesia, by Indira Lakshmanan, Boston Globe, front page.
The Globe captures it ever so much more succinctly than the Times wordy and fuzzy offering: "Stung by debate, Indonesian leader ends election bid - East Timor vote upheld - Flurry of political deal-making as parliament prepares to replace Habibie today," by Seth Mydans, NYT, front page.
- Britannica free to Web users, AP via NYT, C6.
CHICAGO, Oct. 19 - The Encyclopedia Britannica, afraid of becoming just another dusty relic of the precomputer age, announced today that it was making its 32-volume set available free on the Internet.... www.britannica.com
The 231-year-old company dropped its door-to-door sales three years ago and hopes now to make money selling advertising on its site....
[Good luck to both Britannica and its advertisers. Meanwhile, we have an authoritative source of general information on the Web. Public libraries, watch out!]
- [1 UNmerger - ]
Ralston Purina to spin off [Eveready & Energizer] battery unit in April, Bloomberg via NYT, C4.
10/19 Reebok hailed for releasing study of factory abuses, by Gregg Krupa, Boston Globe, C1.
[See also op ed by Reebok CEO Paul Fireman, "Steps we must take to improve Third World Labor conditions," Boston Globe, A19 on 10/25/99.]
In an action praised by labor and human rights officials, Reebok International yesterday released an independent study of two factories in Indonesia that documented substandard working conditions, including improper handling of hazardous wastes.... The 14-month-long study included interviews with 950 workers..\..
The report, prepared by a Jakarta-based research and consulting firm, Peduli Hak - which is Indonesian for "Caring for Rights" - said that the 10,000 workers in the two factories were not provided with basic information that would help them to collect overtime pay. They also were exposed to unhealthy conditions at their work stations, and women were subject to gender bias, the report said.... Reebok said that, based on the report, it already has pushed for improvements at the plants that cost $500,000 to implement....
10/17/99 2 glimmers -
[So, how are YOU expecting it to happen?]
- Mom's dad's report card - Quantity, quality time top US kids' wish lists - Ellen Galinsky, author of "Ask the Children," interviewed more than 1000 children about their parents' work lives [photo caption],
by Diane Lewis, Boston Globe, F4.
Children whose parents spend at least six hours a day with them on work days tend to give their mothers and fathers top grades for making them feel important.... Two issues loomed large in the study: whether parents were giving their children "focused" time, and whether dad was gainfully employed.... After randomly interviewing [1,023] children in grades 3 to 12, and conducting telephone interviews with 170 parents in 15 states, Galinsky found that both the amount of time and the quality of the interaction were important to children....
[So it's true. We don't need more government-subsidized childcare. We need time to bring up our own children. We'll never get more family values without more family time.]
With work hours increasing, it is hardly surprising that Galinsky found that guilt is still prevalent among parents, especially among working mothers..\.. Galinsky's book, described by one critic as a "guilt buster," contains a surprise to many: Most kids don't care whether mothers work or not, though younger children were more likely to say they liked having their mothers home..\..
[And here's another surprise - ]
Parents whose household incomes were $25,000 or less spent more time with their children than parents whose household incomes were $75,000 or more. Parents with lower household income may work less or be employed in jobs with more regular or part-time hours. Moreover, working-class parents were more likely to rely on each other or relatives to care for their children than were middle- and upper-class parents....
[And we like the emphasis here on child power too - the last "minority" to get a voice. As Isaiah (11:6) says in his vision of the peaceable kingdom, "The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them."]
- "There must be more to life" - While many people change careers, a growing number of Americans in their 30s, 40s and 50s are abandoning professional success and material comforts to become ministers, priests and rabbis, by Lyric Winik, Boston Globe Parade, cover story.
At least half of all the men and women entering seminaries today...are over the age of 35, sacrificing successful careers and prosperous lifestyles.... In the economic boom-time of the '90s, seminary enrollments have risen 10%, and more than half of the 65,000 students attending Catholic, Protestant and Greek Orthodox seminaries are 35 or older - up 5% since 1991.... When David Miller of Key Biscayne, Fla., left a successful banking career in 1995 to pursue religious studies at Princeton Theological Seminary, he dashed off a letter to 500 business associates explaining his decision. He thought he might get a few replies. To his surprise, he got more than 200 letters, faxes and phone calls. All were positive; a few opened their hearts.... One man...told him about a crumbling marriage and the personal toll of globe-trotting success.... Miller adds, "I was struck by the number of people who were really hurting. Seeing that sort of validated what I did."
[More prospective converts to shorter work time! As the old question goes, "do we live to work, or work to live?"]
10/16/99 Big sell-off caps Dow's worst week since October '89 - Greenspan speech cited - Rapid rise in producer prices and concerns over interest rates add to volatility, by Floyd Norris, NYT, front page.
[To solidify, an economic bubble (asset price inflation = unusual rises in prices of instruments wealthy use to store money = the P of the P/E ratio) needs to centrifuge stock inflation into wages and get more support for its "investments" from actual sales (thus bolstering the E of the P/E ratio). How else is it going to happen if the stock market doesn't come down a little and wages go up a lot, to realign the P and E of the P/E ratio (price/earnings of stocks) to more usual levels.?]
...The Dow Jones industrial average traded below 10,000 for the first time since April. It rallied a bit, to close at 10,019.71, but still was down 266.90 points, or 2.59%, for the day. The weekly decline of 5.9% was the worst since a fall of 7.8% in the week ended Oct. 13, 1989....
The Government reported yesterday that the Producer Price Index rose 1.1% in September, the largest monthly climb in nine years [although] most of that could be explained by rising prices of tobacco, cars, food and energy....
[By the way, why is tobacco still in this index? Get it OUT so we can stop congratulating ourselves for its prosperity and v.v.!]
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