MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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MURDER, POLITICS, AND THE END OF THE JAZZ AGE by Michael Wolraich Order today at Barnes & Noble / Amazon / Books-A-Million / Bookshop |
Bloomberg published a fact checking piece on Friday as to why Obama is wrong on the TPP.
The Massachusetts senator has warned fellow Democrats that a fast-track trade bill now in Congress could undo U.S. laws such as the Dodd-Frank banking regulations later. A number of constitutional scholars and other legal experts say she’s right.
The reason: An arcane trade-bill provision that would make it easier for a future president and Congress to undercut existing statutes, even ones with little to do with trade.
The risk to Dodd-Frank is “real and meaningful and worth worrying about,” said Michael Barr, Obama’s former assistant Treasury secretary for financial institutions and an architect of the financial law. Barr said a hostile president might weaken the law through other means, such as a legislative assault or regulatory maneuvers.
Comments
Think Progress video. TPP explained.
by trkingmomoe on Sun, 05/17/2015 - 4:34am
I remain puzzled by the lack of historical perspective on trade and some appreciation for global ramifications.
Here's a 1995 paper noting that US textile employment peaked in 1948 and apparels peaked in 1973 - long before NAFTA, et al. It specifically notes Caribbean offshored production, as the Caribbean & Latin America used to be our own sweatshop, as ordained by the Monroe Doctrine, until we fell in love with Deng Xiao Peng in the early 80's.
Nevertheless, decrease in employment doesn't equal decrease in production, as productivity per worker for US industry has increased greatly. One other book denotes that the US imports & deficit in these industries had increased significantly since the Tokyo Round took effect in 1982. Blaming it all on NAFTA or even China is misleading.
I still don't understand how we relate trade in low-skilled sectors with giving poor foreign countries a chance in developing lower-skilled markets, presumably while the US moves up-market in skills and products. Since apparel sweatshops have been the bottom of the barrel for a century or more (including well-known fire disasters), it would be expected as we get fewer immigrants that more of this low-skilled work would be done abroad - Mexico, Philippines, Saipan/Guam ("US-based" sweatshops kinda, with legal & illegal immigrant workers) & of course China/Vietnam.
If we do put price supports on internally produced goods, are we fine with the increased poverty in foreign countries? Brazil managed to build up a very good ethanol market but the US prohibited Brazilian imports because because because - especially because of heavy US government subsidies for corn. Brazil of course can't compete against such subsidies, so is locked out, while Americans pay more for corn. I'm sure the same is true for textiles & apparel. Is that fine with us? Let the Chinese and Mexicans and Peruvians eat dirt? or is there a Plan B I don't know about to relieve world poverty?
[I remember shopping for kids clothes a decade or 2 ago and a women proudly declared she didn't buy clothes made in Vietnam because she'd heard about Nike mistreatment - and then filled her shopping cart with goods from China which no doubt was made by prison laborers and new migrants to the city paid $3/day under horrific conditions, etc. etc. - we're so selective in our information & decisions that I keep waiting for someone to try to piece together the big picture].
Apple has yearly revenues of some $182 billion, which I assume is mostly domestic origin despite some foreign outlays - gross margin is estimated at 65%, and Chinese assembly is a pittance. Likely bigger charges are Japanese displays and Korean chips, while core materials for manufacturing - e.g. phone case, motherboard, etc. - are likely tiny as well. God knows at 0.06% of profits they don't put much into paying taxes.
Back when I was looking into toy manufacture, cost of goods was about 10% of retail price - so the rest of the chain (e.g. ex-China or elsewhere) makes up 90% of the costs, with typically 50% gross margin - typically the US take (interestingly, Barbie was never made in the US - first produced in cheap post-war Japan & later moved to China).
So second, where is that upwards job mobility that we were promised? While I agree China is anti-competitive, distorts its currency (like the US distorts its own - such as Bush's "weak dollar" policy to stimulate exports), and puts barriers to our exports, we're also fighting with the rest of the world over the low end of the barrel.
So where's the real beef? blocking the trade deal won't recreate a WWII-style American manufacturing sector or textile/apparel juggernaut like we used to have. What do we actually want or expect?
by PeraclesPlease on Sun, 05/17/2015 - 7:03am
As a consumer I would like to be able to buy US made goods. I am not alone on this. I don't mind paying extra for them because I know the money will give some one a job.
I buy a Nordic Ware baking pan every year. I now have a closet full of them and only use each one a couple of times a year. I don't need them but I like the idea that I can buy something made here.
I have a nice stove that was made in Asia. This stove was made for the US market. The general population in Asia don't have stoves. They don't bake. The apartments that the new middle class in China shows off doesn't have an oven just a couple of burners. They traditionally buy baked goods from venders in their markets. There is no foreseeable market for home ovens in China. Corporations are there for cheap labor and to pollute. Both the pollution and lack of jobs hurts this country. So it make no sense to allow these goods in this country from China.
This is the way most of the voters see this. They want to buy things made here and they want the jobs to do that.
by trkingmomoe on Sun, 05/17/2015 - 3:01pm
It's not about jeans as this video focused on nor socks as I mentioned in a previous post. That's just a specific example to help explain a complex topic. It's not even just about the apparel industry. It's about manufacturing across the board. We're not making much steel, we're not making many cars, we're not making refrigerators, we're not making anything the way we used to.
The loss of those manufacturing jobs is rippling across the whole economy of the US. Hard fought gains over years are being lost as an over supply of labor makes people less able to negotiate with employers. Yes there were sweatshops in the US in the apparel industry. But sweatshops in the US in the latter part of the 20th century enabled workers to pay rent, even save up for a house. Sweat shops in many countries house employees stacked together like logs in dorms living hand to mouth.
In 93 the US ran a 4 billion trade surplus with Mexico. Now it runs a 53 billion deficit. This is happening in country after country. What's the end goal here? Why should anything be made in the US? When will we lose the rest of our industry? Even with the pay cuts Americans are taking eventually countries will move up to more complex manufacturing and we won't be able to compete against their low wages. China is beginning to get into the car manufacturing business. It's more than possible that in a decade or few they could dominate that market as well. This is unsustainable. The US cannot raise the world out of poverty by running a trade deficit with every country on Earth. Yet every country sees it's prosperity by exporting more goods to America.
I'm not sure this is even good for the foreign countries. Often it seems like a con between the elites in both countries to rip of the workers in both countries. Our elites get cheap labor and screw over US workers. The elites in other countries get rich by their standards by ripping off their workers. In the process of ripping them off they leave a legacy of environmental destruction that will plague the population for generations.
Yes stopping the trade deal won't solve the problems we face. We also need proactive solutions. Unfortunately those are unattainable at present. The best we can do is stop digging ourselves deeper into the hole.
by ocean-kat on Sun, 05/17/2015 - 6:56pm
Thank you. You are much more elegant with expressing this, then I can be. I certainly agree. The mood of the country seems to be heading in this direction.
by trkingmomoe on Sun, 05/17/2015 - 4:01pm
While I'm certainly gratified that you like my little comments I don't see any cause for you to disparage your own contributions to this site. You make your points effectively and are no less eloquent than any other poster here.
by ocean-kat on Mon, 05/18/2015 - 7:03pm
by PeraclesPlease on Mon, 05/18/2015 - 12:54am
I agree we need to step back and think about what a future economy would look like. The problems we face aren't caused by free trade alone. But while we're doing that thinking we shouldn't move forward with policies that exacerbate the problems.
In the end if Musk gets his electric car and his batteries to the point where they are substantially better than the competition why would he make them in the US? The only reason would be patriotism or ethics. The wisest business decision would be to make them where the wages and environmental standards are lower. Perhaps Musk is ethical and patriotic but I wouldn't bet on the ethics of the vast majority of business people.
You think America can capture new emerging technology? Why would any business make any product in the US?
Demand for solar panels throughout the United States is at an all-time high, industry executives say. Yet, American solar manufacturers are fighting to stay afloat as waves of cheaper Chinese products flood the American market.
“The Chinese unfair trade practices have nearly killed the entire U.S. solar-manufacturing industry,” said Tim Brightbill, a partner with Wiley Rein LLP and lead counsel to the Coalition for American Solar Manufacturing. “There are only a handful of companies left, despite the fact that demand for solar is very large and growing
We've fought for years to get decent wages for workers. We've fought for stricter environmental standards. Of course damn near everything can be made cheaper abroad if the daily pay is less than the hourly pay in America and you can dump the waste into the nearest river. Better yet 13 and 14 year old kids will work for even less. Is that the future you see? A race to the bottom? We can repeal our minimum wage laws, our pollution standards, our child labor laws. Then we can compete?
There's a simple reality that many people don't want to face. The majority of the population doesn't have a college degree. The majority of the population will never go to college. We have to figure out a way to include those people in the new economy and stopping this trade bill won't do that. I'm not sure what the answer is but I know that shipping more jobs overseas isn't the answer. It will make the problem worse.
by ocean-kat on Mon, 05/18/2015 - 2:38am
by PeraclesPlease on Mon, 05/18/2015 - 3:54am
A 1996 article had Barbie costs left in China at 35 cents for a $10 retail price - so 1/30th the purchase price. China wages have risen since, but I imagine it's still hugely lopsided. Someone else pockets the profits - who?
by PeraclesPlease on Mon, 05/18/2015 - 4:19am
Peracles, I ask my accountant, Betty, that question every month, "Betty, where did all the profit go?" She usually brings up things like my Amex card and purchases of new trucks, etc.
Even in a service business like mine, direct wage costs are swamped by overhead costs. Folks forget expenses like employer contributions, distribution costs, advertising (we pay Google), direct sales salaries w/ attendant expenses, R&D, phone and communications, returns, warranties, workers compensation, vehicle insurance, equipment maintenance, legal fees, accounting, benefits including medical, rent, local fees and taxes and of course if one actually makes a profit, out the door with taxes.
If a particular industry still has "channels of distribution"---(I assume this 20th century concept would exclude, e.g., Amazon's in-house creations like the Kindle), each layer has to take a cut.
In a sense, even if a u.s. manufacturer gets lower labor costs overseas, if it is expanding, these overhead and ancillary services and wages grow, usually at a higher wage rate. So, cheap labor overseas might not be the job killer, looked at across an organization, or the country as a whole, that it appears to be at first glance.
Then there is executive compensation. A friend of mine went to a conference of the company's top execs at a Ritz Carlton in Sarasota to try to figure out how to stop the company's gigantic losses. After a week of tarpon fishing, bonding, and grilling steaks they concluded that they would have to cut staff by 20%.
by Oxy Mora on Mon, 05/18/2015 - 6:21pm
Good one - my main point is most of those overheads - expenses & subsequently someone else's job - are inside the US. Even the bank where the overpaid exec stuffs his unearned windfalls is likely a US bank.
by PeraclesPlease on Tue, 05/19/2015 - 1:09am
With executive pay going from 20 or 30 times the average employee pay to 400 times I suspect if we broke down the figures it would turn out the largest reason was executive pay. But the larger issue for me is not Barbie. There once was a vibrant toy manufacturing industry in this country in spite of the fact the Barbie or some few other specific toys were made over seas. That industry is all nearly gone now and all those decently paid jobs.
by ocean-kat on Mon, 05/18/2015 - 7:13pm
I think there's a very interesting discussion to be had about why domestic production should continue, why it's not, where are the new outputs of pride-in-quality that could seemingly be produced locally.
I was briefly involved in a project to produce & sell eco-diapers in China. The margins were very tough to manage & in the end it's likely the Chinese stole the design and started a cheap knock-off. But prior to this effort, the business was still very painful & non-scalable despite being interesting and worthwhile - lot's of word-of-mouth, individual home-working agents, etc. Maybe that's sufficient - maybe I had my expectations too high, but it all felt like pushing a rock uphill.
But I think we're also missing the boat on socialism - Norwegians have a horridly high tax rate - but then that society is funneling its profits back into support for the country as a whole and the individuals who live here. Our system is avoiding paying back into the system that sustains it. This is a basic physics situation of entropy and closed vs. leaky systems. Of course a tire with a leak goes flat and either needs the leak fixed or lots of stops at gas stations. But the basic idea of socialism is that people contribute - not that they all do the same. And in the 21st or better 22nd century, that contribution doesn't have to be the standard Victorian morals of the Dickensian factory or even the Detroit assembly line 1954. A lot of what we did then was simply because we had to. Now we don't have to do a lot of things - agriculture output is huge without too much labor input, soon energy output will be huge without needing to dig out natural resources - we don't have to have all the people "work" but they all need to survive - eat/have housing/etc - and they all need a sense of belonging and purpose - that doesn't have to be a "job" but likely means an "occupation", a role, an activity.
That teacher that gets fired - what will he/she do? we need to think about it. If they can't fit in with a school, where will they fit in?
If "profitable" has low enough overheads say due to subsidized healthcare, lower cost of car insurance, lower cost of groceries - mom-n-pop home businesses can also be sustainable, though not hugely scalable.
by PeraclesPlease on Tue, 05/19/2015 - 1:27am
There're a lot of speculative discussions that some might find interesting. I'm not one of them. Occasionally my mind wanders into imagining utopian societies, usually some form of socialism, but mostly I'm interested in discussing attainable solutions to the immediate problems we face. If robotics take off the way some think it will we'll have to come up with some rather extreme solutions to deal with all the unemployed surplus labor and it probably will have to be some sort of socialism. But until we reach that point it's unattainable.
I brought up college because that's the solution many politicians are talking about. There're two reasons that's not a real solution. Even if everyone could get a college education there's not enough jobs for all those grads. But as I pointed out above more than half the population doesn't have a degree and imo at least half of the population never will. Some people are just not made for college. That's the reason to keep a sufficient amount of production in this country.
America is the largest richest market and every country wants a piece of it. We shouldn't give it away for free. I'm all for helping other countries raise out of poverty but I don't think impoverishing the mass of American workers is a justifiable cost.
by ocean-kat on Tue, 05/19/2015 - 4:49am
I'm not talking about "utopia"- I'm referring to Norway, a real country, and I'm trying to look at real ways that can either provide jobs in this screwed up environment and/or redistribute income to counter the negative effects of job-loss. "College" vs online training including virtual walkthroughs, realistic hands-on simulation, etc. will continue to be a thornier topic over the next 5-10 years, not the distant future, especially with horrid tuitions and usury rates for student loans. And most people, as you intuit, don't have much use for another 4 years of their life pissed down the toilet reading "great books" or discussing Pliny the Elder.
Everyone wants a piece of America, but America wants a piece of everyone else. It's hard to keep the assymmetrical access we had through much of last century - the Cold War's over and China's become a super-supplier with ability to push its own agenda and the EU's now bargaining as a whole. Plus Europe is no longer a sufficient market to sustain our growth like yesteryear even if we shut out all our imports. Plus a lot of our "imports" are simply petrol as fallout from our Mideast adventures that both caused us to burn a ton more oil and also raised the price of our imports (and did much to kill off the Big 3 as they were).
Anyway, I'm interested in what type of production can be growth sectors in any serious jobs numbers - whether software services or manufacturing or eHealth or alternative energy or something besides cleaning out bedpans and handling a shake machine. Or if those jobs don't appear, how to ameliorate the effect.
by PeraclesPlease on Tue, 05/19/2015 - 8:49am
This prompts some thoughts about consumerism, elastic demand and quality. I just purchased an industrial grade fifty four inch zero turn mower, a John Deere, and paid much more than I would have at Home Depot for as large a mower. My perception (I could be wrong) is that it just looks beefier (I like that) will last longer and there is an actual dealer who has parts, can repair etc., plus it's Americun made. I'm upgrading. I could be wrong, but I think I've made a wise decision money-wise although its a bigger bite now.
Always using myself as the hub of commerce, my point is that the growth factor you're lookng for may come in the form of better and higher priced products for some folks. My experience is that a whole range of products---like appliances, for example, are cheap but not necessarily long lasting. For example the touch screens on two large LG air conditioners crapped out in six months---good thing I kept the remotes, which,knock on wood, still work. In a sense its similar to our lousy infrastructure, tons of cheap products---tools, etc., which are crap, and ripe for replacement as some employed people are feeling better about their circumstances and thinking more long term value.
Obviously, the effect on lower scale workers is indirect, and doesn't substitute for better wage rates.
Somewhat akin to the above, we forget about exports. One of the biggest consumer areas for Asian populations on the upswing is the purchase of electronics and technology, much of it from U.S. companies.
by Oxy Mora on Tue, 05/19/2015 - 12:27pm
You're addressing one more of the many problems with the out sourcing of goods. The race to the bottom is not just about wages, safety, or environmental standards. It's also about quality. Companies in other countries also compete with each other for contracts. Since wages are already at rock bottom they find ways to save money to offer cheaper goods by lessening the quality of the materials. While one can research when making a large purchase one can't spend the time over every $20 one spends on a tool.
I could come up with numerous examples. I had a short blade long handle pruning shears for 25 years. I used it hard until finally the handle broke. When I couldn't find a replacement handle I replaced it with a Fiskars, a brand that has always had a reputation for quality. In less than a year the blade was badly gouged. Clearly a lower quality steel was used. My 25 year old clippers still has a blade in excellent condition. I'm planning on getting an oak limb and carving a new handle for it.
But I don't think anyone is forgetting about exports. The problem is that with every increase in exports to a country there's an even larger increase in imports leaving us even worse off than before. In the overall picture the increase in exports is essentially meaningless.
by ocean-kat on Tue, 05/19/2015 - 4:51pm
This is of course an issue for blenders, washers/dryers/dishwashers, mobile phones, lawnmowers, electric razors, etc., etc. I've bought used blenders from 20 years ago that run fine for another 10. Vs. probably most I could buy today new that might make it to 3. Then again, I paid dirt prices for the new ones - but then every time I've bought a slightly expensive cappuccino maker, it works like crap but the cheapest ones I've been quite happy with. My best solution so far is to shop at an online/bricks-and-mortar store with a million products that keeps good track of my purchases so I can at least do returns, since I'm bad about keeping receipts.
by PeraclesPlease on Tue, 05/19/2015 - 5:08pm
The Canadians agree with Senator Warren:
While NAFTA does not empower individual banks to sue the US under the Investor State Dispute System, the TPP does.
by HSG on Sun, 05/17/2015 - 12:14pm