Yes, not everybody cares for his style, but I really like Matt Taibbi’s analogy here:
[National Review‘s Will] Cain said he believed that the protesters are driven by envy of the rich.
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“I find the one thing [the protesters] have in common revolves around the human emotions of envy and entitlement,” he said. “What you have is more than what I have, and I’m not happy with my situation.”
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Cain seems like a nice enough guy, but I nearly blew my stack when I heard this. When you take into consideration all the theft and fraud and market manipulation and other evil shit Wall Street bankers have been guilty of in the last ten-fifteen years, you have to have balls like church bells to trot out a propaganda line that says the protesters are just jealous of their hard-earned money….
__
[W]e hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that’s just the problem. These guys on Wall Street are not winning – they’re cheating. And as much as we love the self-made success story, we hate the cheater that much more.
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We cheer for people who hit their own home runs in this country– not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.
__
That’s why it’s so obnoxious when people say the protesters are just sore losers who are jealous of these smart guys in suits who beat them at the game of life. This isn’t disappointment at having lost. It’s anger because those other guys didn’t really win. And people now want the score overturned.
__
All weekend I was thinking about this “jealousy” question, and I just kept coming back to all the different ways the game is rigged. People aren’t jealous and they don’t want privileges. They just want a level playing field, and they want Wall Street to give up its cheat codes…
Click the link for more excellent images (“stupidity insurance“) and further details…
… [W]e have a massive police force in America that outside of lower Manhattan prosecutes crime and imprisons citizens with record-setting, factory-level efficiency, eclipsing the incarceration rates of most of history’s more notorious police states and communist countries.
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But the bankers on Wall Street don’t live in that heavily-policed country. There are maybe 1000 SEC agents policing that sector of the economy, plus a handful of FBI agents. There are nearly that many police officers stationed around the polite crowd at Zucotti park.
__
These inequities are what drive the OWS protests. People don’t want handouts. It’s not a class uprising and they don’t want civil war — they want just the opposite. They want everyone to live in the same country, and live by the same rules. It’s amazing that some people think that that’s asking a lot.
cathyx
I’m so glad you wrote about this. I was going to link to it in the next open thread. It’s a must read article.
Shawn in ShowMe
America has a long and glorious tradition of house negroes defending the goodness of the plantation owner. I wouldn’t expect anything less from the 21st century version who was given a small plantation of his own to run.
Zifnab
I showed up to a Tea Party rally with a shoulder mounted rocket launcher and police didn’t bother me at all. Clearly if OWS protesters are getting abused by the police, they must have deserved it.
And if the Wall Street employees aren’t getting prosecuted, that must mean they aren’t breaking any laws. Innocent until proven guilty, that’s my motto.
Violet
Thanks for posting this. Taibbi nails it with this one. People are angry because the Wall Street types cheated their way rich and screwed the rest of us. That’s where the anger really comes from.
artem1s
I’ve been hearing this from wingnut relatives since St. Ronnie at the very least.
And honestly, it’s becoming pretty obvious, to me at least, that real American’s only cheer when regular white (good) guys win. Bonds, Tiger Woods, et al, had it easy anyway compared to their (white) predecessors. Juicing is just another cheat on their part. McGuire, Rose, Clemons were all duped into their indiscretions. Or they’re all doing it, or all the same or something, anyway.also.too.
in any case, in wingnutopia losers have always deserve what they don’t have.
Trinity
Taibbi is right on the money (pun intended).
I also want to thank you for posting about this!
singfoom
In before people trash Taibbi and tell us he’s no journalist and he doesn’t cover the financial beat. He does nail it.
A level playing field? Too bad it seems like we’re going to have to run through tear gas and flashbangs to find that field.
wilfred
“It’s not a class uprising and they don’t want civil war—they want just the opposite. They want everyone to live in the same country, and live by the same rules.”
Sorry, it is a class uprising – and the sooner that people get over their conditioned shock at slave uprisings, the better.
We don’t live by the same rules. Is that so fucking difficult to understand? Every once in a while we have to be reminded of the Golden Rule – he who has the gold, makes the rules.
Who gives a fuck what Will Cain thinks? He defends his class interests. Think of your own.
JCT
Great article.
I just wish there was a nice, straightforward way to explain to folks exactly *how* these guys make their money and who the victims really are — most people still think that the Wall Street guys *are* just clever, hard workers.
Reality Check
Wow, only 5 posts until the race card gets played? That has to be some kind of record.
Notice how with Toolbag Taibii it’s always all emotion, screaming, and temper tantrums. He didn’t cite even one example of the “cheating”. No, he just screams and cries and throws a fit and works in something about “balls” or maybe a reference to anal rape. Angry, childish, and content-free.
Mino
@Violet: Not entirely. Lots of folks are angry because they see nobody going to jail for it. No attempt. Why the fuck do we pay the big bucks for an SEC? Fines don’t count. Meaningless in proportion to the crime.
Beau Biden was on Rachel last night. At least at the state level, some of these Golden Boys might get theri hair mussed.
cathyx
@Reality Check: Did you actually read his article?
Mino
Come to think of it, maybe prosecuting SEC officers for malfeasance might get them off their duffs.
Baron Jrod of Keeblershire
I’m sure the Taibbi haters at this blog will be glad to know they’re in agreement with Reality Check. Great minds think alike!
Feudalism Now!
The Bank and Finance industry continues to be rewarded for their cheats. Microtransactions and selling short continue to rake in cash while adding nothing to the economy and cause significant harm.
Cheating is one way to phrase it but the collusion between the actors is the worst part. It is racketeering and payola with a dash of economy terrorism.
Villago Delenda Est
Most of the rich got rich in one of two ways:
1. They cheated.
2. They inherited
If you’re Donald Trump, you did both.
Reality Check
I’d really like to know: is the late Steve Jobs a great innovator who vastly improved human life and productivity, or a scum-sucking parasite and cheater whose wealth should have been redistributed a long time ago?
P.S. Banking CEOs are not the highest paid, not even close.
wilfred
Voltaire: “Behind every great fortune, there is a crime”.
We’re not talking about the petit bourg with a flower garden and a condo in Florida. We’re talking about excessive, obscene wealth when people are sleeping outside and children are malnourished.
If you’re not sickened by that, you’re jealous of it.
feebog
@ Mino: That was not Bo Biden on TRMS last night, it was Eric T, Schneiderman, Attorney General of New York. Yes, he mentioned Bo Biden several times, they are jointly investigating the Banksters and possible crimes committed that led to the melt down.
@ Reality Check: If you have been on this blog for any length of time you should not need Taibbi to lay out the various schemes that the Banksters used to cheat their own investors.
Smiling Mortician
@Reality Check:
False dilemma. Try harder.
danimal
@Shawn in ShowMe: @Reality Check: Shawn, take your racist crap elsewhere. There’s no need for house negro and plantation talk on this topic; the problems have been in place much longer than Obama has been in power. RC, it took two posts, not five. But you are blind and can’t see real racism when it rears its ugly head.
Race is at best tangential to the actual article. But obviously it’s an amazingly useful distraction, for left and for right.
If the banksters were actually producing something of value to society, nobody would care much about their income. They make their money cheating and scheming and working the laws. That is why the 99% are upset. At least Apple gave us some cool gadgets, what has Chase done for you lately?
Mino
@feebog: Sorry, you are right. My mistake.
Paul in KY
@JCT: They take loans they think are bad & sell them to gullible people & then bet that the loans will tank.
Judas Escargot
The ‘jealousy’ framing is just another misapplication of moral language to class issues (cf. the “they got mortgages they didn’t deserve!” bs).
You can’t refute it, because it’s not even an argument. You’re just supposed to hear the word, feel shame, and stand down like a good little herdling. You wouldn’t want to be jealous, would you? Only a bad person would be jealous of someone who had more money than them.
(Though that other deadly sin, Greed, is just okie-dokie apparently).
shortstop
Good stuff. And although I know you meant the baseball/general game analogy, which is excellent, “balls like church bells” will be finding its way into my lexicon.
John S.
@Reality Check:
The problem with binary thinkers like you is that you cannot fathom that Steve Jobs can be both! Being an innovator and a parasite are not mutually exclusive concepts.
Paul in KY
@Reality Check: Hey Spock, shouldn’t he (and you and I) be ’emotional’ about the massive fucking theft they have foisted on all of us?
cathyx
99 Percent Mocked by Wharton Business Students
http://www.youtube.com/watch?feature=player_embedded&v=tVJ04k7cafY
wilfred
Ah, the Steve Jobs (John D. Rockefeller, Carnegie, et al.) gambit.
Class: Guns don’t kill people, people kill people.
Category: Capitalism works, we just need to get rid of the bad capitalists.
gbear
@Reality Check: Obvious point missed by RC: Steve Jobs was not an investment banker.
Chris
Thanks for the article, Anne.
Speaking for myself, I do care for his style. He hit the nail on the head when he covered the teabaggers (“The average Tea Partier is sincerely against government spending — with the exception of the money spent on them. In fact, their lack of embarrassment when it comes to collecting government largesse is key to understanding what this movement is all about”), so I’d say he’s the perfect person for the OWS stuff.
Chyron HR
@Reality Check:
Oh, look, it’s one of those non-violent Tea Party protestors.
gnomedad
I might not have the skills to be a successful burglar, but that doesn’t mean I have no right to object to burglary.
Reality Check
@John S.:
If he’s an innovator then he is not a parasite, since he’s done something extremely beneficial to society.
Banks are necessary to run a modern economy. Banking is one of the big reasons we got past the Lord-and-serf agrarian economy of the Middle Ages for God’s sake. But hey, at least back then everyone bought local, and we all got plenty of exercise and ate organic foods! hmm, maybe THAT’S what progressives want after all!
Tissue Thin Pseudonym (JMN)
Yes, I understand that Taibbi’s fans don’t want to grapple with the fact that he is habitually dishonest in his pieces and that he has zero subject knowledge when it comes to finance, leading to gross inaccuracies. I realize that you would prefer to argue that we don’t like his style rather than that we have serious problems with his basic ethics and competence. That way you don’t have to confront actual facts.
A while back, I posted a lengthy rundown of the basic inaccuracies and blatant lies in a piece that he wrote blaming the Obama administration for not prosecuting people. Funny, none of his admirers ever posted a response.
@Baron Jrod of Keeblershire:
Yes, because there is no room whatsoever to criticize Taibbi without being in the pockets of Big Money. It is good to know that disagreeing with him necessarily means that it is impossible to hate the bankers. Here I was thinking that I believed both that he is useless and that the Occupy Wall Street movement is a good thing. I’m glad you set me straight.
Reality Check
@gbear:
No, but investment bankers made it possible for him to get the capital necsessary to start up and expand Apple.
AA+ Bonds
I actually agree with Will Cain, although Taibbi is right to deny him the rhetorical advantage.
A huge problem in society is that we have accepted that society must deal productively with greed, but continue moralistic denial of envy as
1) a human need,
2) an evolutionary prerogative.
What happens when your liberal society can’t deal with relative deprivation, and when new media makes other people’s wealth more evident even as income disparity reduces direct social ties between classes?
You end up with angry popular movements, and, eventually, open revolt. Same idea as the black markets and criminal activity that arise when greed is criminalized.
Assuming no one wants violent Bolshevism in America, we need redistributive policies to satisfy envy.
Shade Tail
@cathyx:
Of course R.C. didn’t read it. He’s a troll, not a good-faith commenter. Don’t waste your time with that pile of idiocy.
Reality Check
BTW, folks, I don’t like evangelical or fundie Christians either. So you’re probably ALL in agreement with me on at least one thing.
AA+ Bonds
@Tissue Thin Pseudonym (JMN):
You’ll refrain from stalking Taibbi if you actually want Obama to win. If you want to feel good about yourself instead, keep on yapping.
The Moar You Know
I’m not a fan of Taibbi’s style, but that is totally irrelevant as he consistently is right, and that’s far more important than his use of strong language or juvenile metaphors.
They cheated, then instead of facing the music when the house of cards came down, they took the economy hostage and squeezed Bush for most of a trillion, then came back and demanded – and got – far more from Obama.
The gun hasn’t moved, in case you haven’t noticed. They just haven’t figured out what the next demand is going to be.
Reality Check
@AA+ Bonds:
Still babbling about pie, I see.
Tissue Thin Pseudonym (JMN)
@AA+ Bonds: Yes, because pointing out that the man is a liar and providing the evidence must mean that I’m a stalker. Do you have a response to the specific charges of dishonesty I made, or are you dodging them?
JCT
@Paul in KY: Yes — *I* know that, heaven help me the town I live in is FILLED with Wall Street guys. Our local paper even ran some “sob” story about some of them losing their jobs and having to walk their kids to school in the AM. So heartrending. Ah, No.
I was thinking more in terms of the populace as a whole. The concept is hard to convey.
Meanwhile, CNN is leading with a great photo and discussion of the income redistribution, OWS has totally turned the tables on the deficit discussion.
joes527
@Reality Check:
Pro-tip: Eradicating malaria. That would vastly improve human life and productivity. Pretty toys? Not so much.
I am not an apple hater, but equating the consumer-gasm that is Steve Jobs’ legacy with “vastly improving human life” shows a lack of understanding of the words: “vastly,” “improving,” “human,” and “life.”
AA+ Bonds
@Reality Check:
Look at this perennial also-ran troll trying to snag my coattails
@Tissue Thin Pseudonym (JMN):
I’m doing your job for you because you seem to believe this is a nasal-pitched classroom debate instead of a political conflict of right vs. left that will determine the policy of this country for the next four years
Tissue Thin Pseudonym (JMN)
@AA+ Bonds: And you believe that lies are necessary to prove our case?
Baron Jrod of Keeblershire
@Tissue Thin Pseudonym (JMN): All I said was that you agree with RC about Taibbi. I said nothing about you being “in the pockets of big money” or any of the rest of your straw.
Is this is the level of understanding and coherence that informs your opinion of Taibbi? I mean god damn, man.
Professor
@Shawn in ShowMe: I love the ‘House Negro’ analogy and the greatest House Negro of them all now is Herman Cain. Now take it and spend it!
AA+ Bonds
“M . . . Matt, you’re so wrong and I can show you how with all my wisdom, please come love me and stroke my genitals“
Tissue Thin Pseudonym (JMN)
@AA+ Bonds: I’ll just take this as an admission of defeat. You can’t argue that Taibbi isn’t a liar, so you’re avoiding the question. Bye.
Martin
@John S.: I have a hard time seeing Jobs’ parasitic side. Very nearly all of his wealth came from his ownership of the company. He received virtually no salary and virtually no bonuses and had no golden parachutes. He took almost no money directly off of the company balance sheets. He got stock options which only had value if the value of the company went up, which is what happened. But most of his wealth came from buying Pixar for $25M and selling it for $7.4B, which he owned a bit more than half of.
I think in the discussion of ‘How should we reward people for doing exceptional things’, Steve comes reasonably close to how we would like to see it done. He made money only when he made money for others and he didn’t take it from his employees (even part time Apple retail employees get health benefits and full time retail employees typically earn about median income for their region). One of the bigger sins there is that he took virtually all of his income as capital gains, so he was paying a quite low rate, but he couldn’t control tax policy, and he never changed how his companies compensated employees over the years to game the tax code. And that applies to quite a few other Bay Area billionaires (if not most of them) as well, not just him.
But all of that aside, I think Taibbi has hinted toward a policy demand that we should make – that there should be a transaction fee, or an itemized increase to capital gains with the proceeds to funnel back for the exclusive use of the SEC, FTC and other regulatory bodies. He’s right that it’s absurd that the SEC has as few staff as they have given the size of the financial market to the US economy, and a funding model that scales with the size of the market and is protected (against the kinds of things that happened under Bush) would go a long way to helping maintain balance there.
Tissue Thin Pseudonym (JMN)
@Baron Jrod of Keeblershire: Ah, sorry. I thought you were posting something other than word salad. I have no idea how I could possibly have drawn any sort of dismissive conclusion from what you chose to write. Certainly not from the “Great minds think alike!” comment.
At least AA+ Bonds has the guts to stand by what he said rather than pretend he didn’t say it.
amk
mittens & his wall-street gangstas
Reality Check
@joes527:
And who would develop the means to eradicate malaria? EEEEEEVIIIIIIIL EEEEVIIIIIIIIL DRUG KORPORASHUNZ!
wilfred
Apple, eh?
“In its report, Apple revealed the sweatshop conditions inside the factories it uses. Apple admitted that at least 55 of the 102 factories that produce its goods were ignoring Apple’s rule that staff cannot work more than 60 hours a week.
The technology company’s own guidelines are already in breach of China’s widely-ignored labour law, which sets out a maximum 49-hour week for workers.
Apple also said that one of its factories had repeatedly falsified its records in order to conceal the fact that it was using child labour and working its staff endlessly.”
http://www.telegraph.co.uk/technology/apple/7330986/Apple-admits-using-child-labour.html
Behind every great fortune there is exploitation of the working class.
Carolinus
@AA+ Bonds:
You’ve made this argument in previous threads about folks criticizing other anti-Democratic-Party-leadership bloggers. I’m not sure I entirely get the threat though — are you saying that, for example, a Hamsher or a Greenwald, are so petty that any criticism of their arguments (by random folks on the internet) will somehow make them even more anti-Obama (is such a thing even possible)?
Rafer Janders
@Reality Check:
Angry, childish, and content-free.
Looks like we have a new entry for the rotating slogan at the top of the page!
Reality Check
@wilfred:
I’m sure they’d all be better off working on rice paddies in the countryside, subsitence peasant farming is sooooo much better, am I right?
Reality Check
@wilfred:
Also, where was the computer/smart phone/tablet you’re posting on made? Union-made with workers making $40/hour for turning a screwdriver? I highly doubt it.
Martin
@wilfred: Since these are so easily trotted out, can I ask you a question: What US-based assembler should Apple have gone with instead?
Raven (formerly stuckinred)
@Reality Check: Where ya been asshole? Teacher prep day at your grade school today?
Rafer Janders
@Reality Check:
P.S. Banking CEOs are not the highest paid, not even close.
No, that would be hedge fund CEOs:
But in a startling comeback, top hedge fund managers rode the 2009 stock market rally to record gains, with the highest-paid 25 earning a collective $25.3 billion, according to the survey, beating the old 2007 high by a wide margin. The minimum individual payout on the list was $350 million in 2009, a sign of how richly compensated top hedge fund managers have remained despite public outrage over the pay packages at big banks and brokerage firms.
Do the math — 25 guys splitting $25.3 billion is $1 billion each on average. That’s for one year.
http://www.nytimes.com/2010/04/01/business/01hedge.html
Reality Check
@Martin:
They could have started one, and paid them union wages, but then laptops would cost about $8,000 a pop.
wilfred
I’ll take the rice paddy over bleeding my life out in a Bangkok sweatshop and chasing the dragon in my free time. Thanks for the choice.
@Martin:
I’m for protectionism. Make it in America, give Americans a decent wage and make Apple lovers pay top dollar for what they want.
Free trade killed the working class. Time to put a stop to it, no?
Svensker
@Reality Check:
Seriously? Yes, back in those days banks did lend money to start ups. Right now, they’re mostly not doing it — even with the money they’re getting at 0% from you and me courtesy of the U.S. Government. They’re too busy charging 24.9% on credit cards to deal with doing due diligence on start-ups.
Reality Check
@wilfred:
Well, those who know best what the two choices are like choose the factory. I wonder why?
You’d take the rice paddy only because you know nothing about how much manual subsistence farming fucking sucks. Especially farming rice. And remember, you’re doing this just to eat.
And I’m going to ask again–is your laptop union made at high wages? Cell Phone? Tablet? What kind of car do you drive, btw?
TheColourfield
So the guys on Wall St who packaged up loans they knew were garbage and paid off the Ratings agencies to rate them AAA then sold them to pension funds while betting against them weren’t cheating. Nope, no fraud there. Got it.
Wag
@Reality Check:
WeeBey
At the risk of being the voice of reason… I like Taibbi fine, though I think his schtick is tiresome and counterproductive often. He’s a polemicist and a good one, and there’s a place for that, and I’d like to see a bigger place for it, frankly.
But calling him a journalist on the financial beat is absurd, and we all should be able to figure that out. He has no insight on the subject matter greater than any of us can glean from our laptops.
It baffles me the cult of personality that surrounds some online writers. Paul Krugman is a brilliant economic mind and being able to read his thoughts on macroeconomics is one of the wonders of the information age. Reading his thoughts on politics is often like reading the diary of the ousted campaign manager for the girl who finished third in the race for middle school student council secretary/treasurer, and that’s being kind. Paul Krugman is brilliant. Paul Krugman knows dick about politics. These things can — and are — both true.
I leave aside Greenwald for the sake of my sanity.
wilfred
@Reality Check:
Save it. I’m as red a an apple, and have been since I worked after school laying out patterns for sewing machine operators and keeping their spindles filled with thread.
I say burn the capitalist system to the fucking ground – just to save you the trouble of any more false equivalences.
different-church-lady
The guys on wall street aren’t winning and aren’t cheating: they’re fucking over the entire game so badly that soon nobody’s going to be able to win a damn thing, including them.
Li
@Reality Check: No they wouldn’t. There is no money in selling drugs to poor people in malarial swamps.
That is, I would wager, why there is no good prevention for malaria, and why a software guy like Bill Gates has to fund research into finding one.
chopper
@singfoom:
taibbi’s been really good about the financial crisis and it’s implications since he started picking it up a few years back, despite not being (at first) knowledgeable in the area. mostly because it all really boils down to the sheer monumental mind-bogglingly fucked way that the system is rigged. you don’t have to understand everything about CDSs and all that garbage to know that the system is fucked up. taibbi just has a good knack for cutting through a lot of it and getting to the central point of it. it’s about fairness, and he understands the frustration the OWS crowd has over that.
that and the potty mouth. griftopia is a fantastic book, but every time i read it i want to put my foot through a banker’s face.
Reality Check
@wilfred:
How old are you? I’m guessing either a 20 year old undergrad or an aging red diaper baby boomer whose nostalgic for the days of Brezhnev.
Because CLEARLY the Chinese were better off under Mao. Yep.
Rafer Janders
The hell they’re not. They may not make as must as individuals than Steve Jobs did, but as a CLASS, they make far more and contribute far less.
More info below:
So how heavily stock-driven were the bank CEOs? There is very nice data in the study of the compensation and stock sales of the CEOs of the 14 leading American financial institutions by scholars Sanjai Bhagat and Brian Bolton. Seven of the American financial institutions accounting for 94% ($116B) of the FHFA suit totals for the American firms ($123B) are included in their study (Bank of America, Citigroup, Countrywide Financial, Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley). It shows that over the 2000-2008 period, the CEOs of these seven companies were making small fortunes by exercising options and selling stock – an average of $139M per CEO. That is almost double what they made in cash compensation ($78M apiece). They lost, on average, $83M in the market crash, causing some to argue that they weren’t taking excess risks because they had so much skin in the game. But it is hardly a compelling argument for a group that was left with net proceeds of the 2000-2008 period of $133M each, plus remaining stock holdings of $76M each. Remaining personal wealth of $209 million is not bad given the massive destruction of value suffered by their shareholders and the American taxpayers.
http://blogs.reuters.com/great-debate/2011/10/05/bank-ceos-and-the-infinite-pile-of-cash/
different-church-lady
@Reality Check: Probably a little of both and a whole lot of neither.
But you’re not really interested in honest answers.
Jennifer
@Reality Check: He’s a floor wax AND a dessert topping!
Yeah, Jobs did some good in creating useful tools for society.
He also got filthy rich doing it, and would have gotten filthy rich even if he hadn’t outsourced production of his products to slave labor in China, so Apple could make 64% profit rather than a mere 50% if said products had been made here – where his biggest market was.
Reality Check
@Jennifer:
Are you prepared to pay 8 grand for your laptop? BTW, what kind of car do you drive? Wilfred the Red won’t answer these questions, maybe you can.
Paul W.
OK Taibbi, you’ve got me on your side for ONE article.. but don’t expect me make a habit of it.
Great analysis, and good read.
TooManyJens
@cathyx: More and more, I think this country would be better off if we closed down the business schools for a generation or two. Right now, their only purpose seems to be teaching sociopaths how to screw their perceived inferiors (which is everyone). I’m not saying there aren’t genuine principles of productive business that should be taught; it just doesn’t seem like that’s what happens in business school.
wilfred
You’re a real binary thinker, aren’t you? Well, it’s not about me. It’s about more and more people stirring to the realization that capitalism has failed.
You can’t get past material benefit because you have no soul. I don’t doubt the Chinese have more stuff than they had under Mao, but back then they didn’t have their children ground up under lorries while people walked past.
Shocked the Chinese. Capitalism has its price – the loss of feeling, of humanity. Where I live, people see it every day.
You’re already dead.
singfoom
@chopper: Yep, really enjoyed his book. I suggest a side of “The Big Short” and “All the Devils are Here” for a nice overview of the malfeasance.
Along with Taibbis reporting, I follow Barry Ritholtz at TBP: http://www.ritholtz.com/blog/
He’s been talking about Loan Origination Fraud for the last two years…
@Reality Check: Yawn. Really? You’re phoning it in. Try arguing with peoples position using logic. Ad hominems and attacking the messenger? Then you’re already signaling to people that you’ve got nothing. Not that it’s news, but seriously…
chopper
oh yeah, the inevitable ‘taibbi just screams and yells and doesn’t provide any detail’ shit. yeah, it’s not like he wrote a whole fuckin book going over, in detail, a shit ton of said cheating.
Reality Check
@wilfred:
No, they just had their children fucking starve.
Whose better off, Wilfred, the North Koreans or the South Koreans?
different-church-lady
@Reality Check:
Count me curious to know which entirely American made device you’re using to create these emissions of yours.
Paul in KY
@JCT: They (the great unwashed) can’t understand that? I thought it was pretty simple. They rig the game so they always win.
Jennifer
@Reality Check: Are you THAT bad at math, dickless? A $500 laptop made at 64% profit would be $640 at 50% profit, if the dollar amoun of gross profit remains the same.
$8,000? Get a fucking brain, moran.
And I drive a Ford.
joes527
@Reality Check: Actually, not so much.
The Bill and Melinda Gates Foundation has worked in this area, so … OK, yeah. A fat cat capitalist who realized that he can’t take it with him so he might as well take some of the piles of money that he couldn’t possibly manage to spend on himself before he dies and do something that makes him feel better about himself.
The CDC has also been involved, but that is Big Government, so it doesn’t fit your narrative.
The EEEEEEVIIIIIIIL EEEEVIIIIIIIIL DRUG KORPORASHUNZ will (actually are right now) jump(ing) on the bandwagon when it looks like the work of philanthropists and government can be monetized.
Reality Check
@different-church-lady:
I’m typing on an HP that was most likely assembled in China, but I’m not screaming about “exploitation” and how awful capitalism is and how we should totally have the same trade policy as North Korea.
My car? I drive a Honda that is American-made but with non-unionized, non-UAW labor.
Reality Check
@Jennifer:
Yes, which model? A lot of Fords are hecho en Mexico, amigo.
Paul in KY
@Li: How about selling quinine?
Reality Check
@Jennifer:
Despite the fact you didn’t give citations for how you came up with “he sold them at a 64% profit”, you’re also not taking into account currency exchange rates.
Hill Dweller
@Reality Check: You’re setting up a false choice between working in a rice paddy or a factory with brutal work conditions.
The point everyone is making is the factory conditions don’t have to be that bad. Paying those people a decent wage and giving them some basic labor protections isn’t going to make or break Apple, nor make a significant difference in their product prices.
Jobs knew what was going on in those factories, but he didn’t care.
different-church-lady
@Reality Check:
That’s good to know because it’s one less item in my “I have no idea just what the fuck it is you are screaming about” notebook.
dan
Whatever happened to the blog philosophy of “stop feeding the trolls”?
BTW – Taibbi is correct as usual.
Reality Check
@Hill Dweller:
It’s not a false choice, it’s the real and only choice people have when a country is in the beginning stages of development. And everyone chooses the factory, going back to the British Industrial Revolution and right through China’s today.
Shade Tail
Why are you all wasting your time with Reality Check? Trolls are going to troll no matter how many times you snap at the bait, unless the number of times you snap at the bait is *zero*.
soonergrunt
@cathyx: No, it did not read the article. It doesn’t need to do that when the talking points have been distributed.
Still, I haven’t pie filtered it because it spouts so much unintentional hilarity.
different-church-lady
@Reality Check: If it’s the “only choice”, then it’s not really a choice, is it?
Jennifer
@Reality Check: Yeah, math genius…why don’t you figure out what that exchange rate would have to be for your stupid ass $8000 figure to be accurate.
TooManyJens
@dan:
Has that ever been a philosophy that people actually followed?
cat
@Reality Check:
Please post a break down of the cost for each of the following Labor, Material, Facility for said US Made laptop while excluding the cost of labor’s health care and retirement.
A US made laptop’s biggest cost will be the cost of the facility because what passes as a factory in China wouldn’t pass US environmental or safety standards.
It would have to be 3x-4x as large as you’d need 4x the number of workers to output the same amount of product since each US workers effective work day is 1/4 of a chinese worker who are routinely required to work over 60 hours a week with no requirements for breaks.
The gutting of US manufacturing almost guarantees a lot of factory jobs can’t come back to the US even as we race to the bottom as factory startup costs are so huge.
burnspbesq
@Mino:
Raj Rajaratnam will be calling you shortly from his prison cell to tell you what an ignorant ass you are.
scav
Ah come on everyone. Chex_mix is ideologically pure and would hire out his kids and prostitute his mother so long as he got a deal at Sam’s. Patriotism and love has a price point, just like everything else.
soonergrunt
@reality check–you should stop now. You’re making wilfred look positively bright by comparison, and that’s quite an accomplishment.
chopper
@Shade Tail:
besides, the purity test argument is stupid. there’s no way to live in this country day-to-day without your choices exploiting some poor shlub somewhere, unless you live off-the-grid and grow all your own food and shit. even then you can’t really avoid it. you can at least make an effort and make as many smart choices as you can.
tho wilfred’s glib avoidance of the question belies a bit of cognitive dissonance over the issue, i’ll grant you that. being a Spokesperson For The Cause On The Internet is a pretty easy gig, actually.
gbear
@dan: Wouldn’t matter. He’d just keep responding to every comment whether it was addressed to him or not. He can’t seem to shut up.
& ditto on Taibbi.
harlana
I saw Taibbi on CNN over the weekend paired with some CNN contributor who was saying it was all about “ENVY” and the protestors being jealous that they don’t have as much as the successful wall-streeters (how many times have we heard this now?).
I don’t remember the moderator’s name, but she put up a poll that showed the majority of Americans either admire or approve of millionaires. A smaller percentage “disapproved” and about 5% flat out “resent” millionaires. Considering, also, that the majority of the populace is actually on the side of OWS, that kinda blows the jealousy theory out of the water, don’t it?
CNN was doing actual journalism there, for a minute!
eemom
“don’t feed the troll” is a useless exhortation. It is contrary to human nature.
The banslam is the only solution for incurable trollery. It should be used sparingly, of course,as we have discussed umpty-ump million times before.
burnspbesq
When Taibbi publicly acknowledges the good work done by the FBI and Preet Bharara’s office in the Galleon investigation, I’ll start taking him seriously.
Jesus H. Magoo, a Goldman director got indicted today. What else would you like?
Jennifer
@harlana: That’s the exact clip the Taibbi piece linked is responding to.
different-church-lady
@harlana:
And then there’s that other poll that’s been going around. Apparently we love millionaires, and we feel like they should be taxed more.
I think I see a way out of this mess…
wilfred
I live and work in a country just now entering modernity. Just today, I lectured in a classroom where women were head to toe in black, but air-conditioning and multi-media hummed in the background. Modernity can’t tolerate tradition for very long.
You paid a price for all your stuff. You can’t see it; you’re a fish that can’t see the water you swim in.
Don’t prattle – You need to get out more.
Jennifer
@burnspbesq: You can’t really slam Taibbi for not having been psychic enough to know the Goldman guy was gonna get indicted today when he wrote the linked post yesterday.
Rafer Janders
@burnspbesq:
Raj Rajaratnam will be calling you shortly from his prison cell to tell you what an ignorant ass you are.
Raj Rajaratnam is going to jail for insider trading. His crime and conviction therefore have nothing to do with the ongoing financial crisis. People have been engaging in and getting caught for insider trading for decades; it’s a garden-variety crime, and it has nothing to do with the widespread securitization crisis that sparked off the global financial meltdown.
Seriously, you don’t get this? You don’t understand the difference between what Rajaratnam did and what the protests are about?
burnspbesq
@Mino:
Here’s a link to Title 18 of the United States Code. Let’s play “Find a Crime That Fits This Conduct.” Take all the time you want.
http://www.gpo.gov/fdsys/browse/collectionUScode.action?collectionCode=USCODE&searchPath=Title+18&oldPath=&isCollapsed=true&selectedYearFrom=2010&ycord=424
AA+ Bonds
@burnspbesq:
Let’s try tax evasion and soliciting prostitution and see where that leads us
Chris
@harlana:
I love how they get to rage at government employees and unionized workers for having better compensation than they do, and how they rage at black people and immigrants for supposedly having better welfare (read: the same welfare) benefits that they do. And of course, all the pissing and moaning about the “liberal elite.” But of course, the envy and jealousy is all *our* doing.
Projection, as always thy name is wingnut.
Rafer Janders
In fact, one danger of Rajaratnam’s prosecution is that it allows fairly ignorant people to point to it and say “see, prosecutors are doing something!” while ignoring the fact that what they’re doing something about is not what we want them to do something about.
It’s as if we all asked why the FBI wasn’t investigating the Mafia, and you defended themselves with the claim that they’d just jailed a meth-dealing biker gang. Great, fine, but these are two different crimes.
Martin
@wilfred:
I asked the question and you dodged it. There is no US-based assembler, certainly none that can can handle Apple’s volume. And the reason the labor is in China is because the components are in China:
Apple is a tech company. They routinely introduce products that use components that either haven’t hit the general market or just have within the last few weeks. If you look at their unit growth, they’re growing about 100% YOY. Last quarter they sold 17 million iPhones. This quarter they’re projected to sell 42 million. They need to make 500,000 phones per day, 6 per second. And the frame for the phone is made on CNC machines that need to be manually loaded. The glass/screen is custom made and requires specialized equipment. There’s no place in the US you can go to expand your manufacturing at that rate. It’s simply not possible here. I’m not sure there’s even a place in the US you could go that could receive the materials at that rate from all of the suppliers – build out their airports fast enough, etc.
But what do you gain? All of the components for the phone, made by dozens of other companies are all made in China, quite a few in the same factory as the phone itself. You’re proposing loading up how many cargo jets per day, flying all of those parts from the factory the iPhone is now made in (creating pollution, using fuel) to some factory in the US, so that 10,000+ people can work a minimum wage assembly job to put the pieces together, stick them in boxes, and then fly 1/4 of them back to China (Apple’s 2nd largest market) and half of them to Europe and other places to buyers.
You haven’t solved but one tiny piece of the chain. Apple can’t solve any of the other pieces because they don’t control those other pieces. And you’ve asked Apple not just to pay an extra $2 per phone for assembly labor (that’s about what it would cost per phone, suggesting that labor savings isn’t the issue here) but to jeopardize big parts of their business by moving assembly to a place where infrastructure is the last priority and takes ages to put in place, and would almost certainly choke off their growth as a result. And you’re going to add to the carbon footprint of the effort with all of that extraneous shipping.
But lets say the US decides to set up an enterprise zone to fill this need. They’re going to need money to do it (which presumably these workers would replace through existing taxes) and that’s going to require Congress approve it. Where do we put it? Which 2 senators win, and which 98 senators lose? Or will it get carved up all over the fucking place like defense contracts leaving Apple not with one or two factories, but 50 of them. 50 supply chains to manage. 50 airports to expand and so on.
Face it, we suck at this. It could be worth it if we move the entire industry to the US – not just Apple’s but all of the component makers and so on, but there’s no fucking way that Congress could do it without totally fucking it up. You’ll need a port and a large airport to support this. China built those, and power plants, highways, water treatment, the works to support these enterprise zones. What port city do we pick? Who pays for all of that infrastructure? How do we even get the labor there. Apple’s assembler employs over a million assembly workers. A million! That’s 4x as many as the US employs nationally in this industry. Even if we moved them all into that one enterprise zone (we now have a brand new city 2x the size of Long Beach once you bring their families) you have a huge undertaking. And if you quadruple their numbers just to meet the need of this zone, you now have a city the size of Houston – just employed in this industry. And you probably need 2x that many to run the grocery stores, man the police force, be teachers, and so on.
Yeah, it’s really easy to just offhandedly drop the ‘Made in USA’ tagline and wander off, but nobody ever tries to explain how to actually achieve it because it’s really, really fucking hard to do. China has done something here that the free market can’t replicate in the US. Only the government can, and ours refuses. End of story. Fix that and then we can talk.
Rafer Janders
@Jennifer:
Again, Raj Gupta was indicted for insider trading. This has nothing to do with the financial crisis.
cat
@Reality Check:
Probably because the number of people keep growing but the amount of agrable land stays the same. There aren’t an infinit number of ‘rice paddys’ for everyone to farm.
joes527
@wilfred:
Good thing you had air conditioning, because that sounds hot
John S.
@Martin:
I wasn’t seriously advancing that Jobs was a parasite – I was merely humoring the Reality Check troll with the theory that you can be multiple things, not one or the other.
And I think as the new Jobs bio will indicate, the man was far from perfect. You can be many things – personality traits are not a zero-sum game.
Rafer Janders
@burnspbesq:
A Goldman director got indicted for betraying Goldman by tipping off confidential information — i.e., Goldman Sachs was the VICTIM in this case.
What people want is for those Wall Street actors who engaged in the conduct that caused the financial crisis (by, among other things, recklessly packaging and selling securitized products that they knew or should have known were going to fell) to pay for their actions. Gupta, the indicted Goldman director, was not indicted for that. He was indicted for insider trading. It’s a separate matter entirely. You’d have to be pretty ignorant or deliberately misleading to believe that the fact of Gupta’s indictment is any sort of response by DOJ/SEC/FBI to the financial crisis. In fact, Rajaratnam and his co-conspirators such as Gupta had already been under investigation before the 2008 financial crisis even hit.
wilfred
@Martin:
Somebody asked me how old I am. Well, I’m old enough to remembering volunteering to put up “Look for the Union Label” stickers on lampposts.
You marshall an impressive array of facts, whose resume is that free trade has failed Americans. No? Well, that’s a start, at least.
I’m not asking Apple to do anything. I don’t give a fuck about Apple – I care about the AMerican working class that has been systematically reduced to the status of industrial/service industry sharecropper.
Tariffs on imports, protection of American workers, that’s what I want to see Can’t do it, or won’t do it?
People can live without Apple computers, you know, shocking as it may fucking be. AMericans cannot live without protection from cheap labor that profits the very class that has reduced them to their current state.
burnspbesq
@Jennifer:
I don’t expect him to be psychic, but if he were a real reporter he would have developed a network of sources within the industry and government, and “a source close to the investigation” would have told him last week that Bharara’s people were putting the finishing touches on an indictment. I read about it yesterday, so someone who shouldn’t have been talking about it was talking about it to someone. Why wasn’t Taibbi the recipient of that tip?
different-church-lady
@Martin:
And that, in a nutshell, describes the major problem with the modern progressive: they believe in the right things, but seem to think that they’d be a piece of cake to accomplish if only everyone else did too. And when you point out how hard things actually are to change they just accuse you of being the enemy.
John S.
@Reality Check:
Being an innovator doesn’t exclude one from being a parasite. Parasites can make huge innovations in their chosen profession. In fact, Wall Street managed to make some serious innovations in parasitism recently. Again, your binary thinking doesn’t work in reality.
There’s a reality check for you, jackass.
wilfred
@joes527
Wallahi, it is. There’s that one move with the abaya, veil and the black gloves that makes the knees buckle. Now that’s power – being imprisoned by the Gaze.
burnspbesq
@Rafer Janders:
Has it occurred to you that “what we want them to do something about” may in fact not violate any existing criminal statute? To the extent that you have a valid beef, your beef is with Congress, not Preet Bharara.
Mino
@burnspbesq: Doesn’t take much to impress you, does it?
Contrast with the numbers Black, et al. convicted in the S&L debacle.
singfoom
@burnspbesq: Can you please, just once, admit that you could use RICO statutes to go after Loan Origination Fraud, and that the idea of criminality is not just in the heads of those who would like to see prosecutions?
And possibly admit that the fact that actual charges not being filed yet is not an indication that nothing criminal occurred, but that charges have not been filed yet?
burnspbesq
@Rafer Janders:
That’s both wrong and stupid. We had this conversation last week. The victims of insider trading are EVERY market participant. Which includes every participant in every pension or 401(k) plan. We are all victims.
Chris Andersen
Oh wow! Talk about a generational metaphor that few over 40 will even get.
Belafon (formerly anonevent)
@John S.: Don’t get sucked into using his terms. Jobs was a pretty good innovator who used Chinese labor to get around having to treat Americans that poorly and messed up the environment. Jefferson was a very smart man who had a number of children with one of his slaves.
cat
@Martin:
/facepalm
We HAD this in the US, then it left for a myrid of reasons, but is not limited to wages of US workers.
We still have chip fab plants that are state of the art in the US and all the needed sub industries to make ipods and laptops or whatever, but until imports into the US are charged tarrifs to even the playing field to counter act foriegn gov’t subsidies, currency manipulation, and environmental damage it won’t be competatively priced enough anyone will do it.
different-church-lady
@burnspbesq: Ahh… you helped me realize how to articulate something.
Everyone wants to see prosecutions. Can’t figure out why people aren’t being prosecuted. They think it must be because the feds don’t want to prosecute.
But what’s going on is that people do not understand the distinction between doing something that’s wrong and doing something that’s illegal.
It’s easy to think, “These guys clearly did things that were very wrong. Why aren’t they paying for it?” Well, that’s how morality plays work, but not how our legal system works.
I mean, I think these guys ought to be in jail too. But I also understand that I have no idea what we could actually jail them on. I’d throw them into moral prison in a heartbeat, but there’s no such thing.
Rafer Janders
@burnspbesq:
@burnspbesq:
When Taibbi publicly acknowledges the good work done by the FBI and Preet Bharara’s office in the Galleon investigation, I’ll start taking him seriously.
When you acknowledge that the good work done by the FBI and Preet Bharara’s office in the Galleon investigation has nothing to do with what Taibi is talking about in regards to the financial crisis, and therefore that your attempted linkage of the two is downright bizarre, then I’ll start taking you seriously.
wilfred
“And that, in a nutshell, describes the major problem with the modern progressive: they believe in the right things, but seem to think that they’d be a piece of cake to accomplish if only everyone else did too”
Piece of cake? Nah, I’d settle for something as easy as repealing the Glass-Steagal Act which held Wall Street manipulation in check for 70 years but was set aside as easily as a small town parking ticket.
Or a war that millions opposed but went ahead anyway and ended up with nobody being called to account, or…
Well, you get the picture. Easy fucking peasie…
Belafon (formerly anonevent)
@Chris Andersen: Maybe few over 70. My parents know what cheat code are (they’re in their 60s) from me, and any parent whose kid plays video games probably knows the term. But, it really is the best metaphor.
burnspbesq
@singfoom:
Can you please, just once, admit that your RICO fetish is absurd? You’ve got it exactly backwards. Prove some predicate acts first. Then we can talk about RICO.
different-church-lady
@singfoom:
Loan Origination Fruad didn’t take place on Wall Street.
burnspbesq
@different-church-lady:
Exactly. As I’ve said on a number of occasions, “outrageous” and “illegal” are not synonyms. Far too many commenters here don’t get that. Yes, Rafer, I’m looking at you. You too, AA+.
Rafer Janders
@burnspbesq:
We had this conversation last week.
I had no conversation of any sort with you or anyone else regarding insider trading last week. You must be thinking of someone else.
The victims of insider trading are EVERY market participant. Which includes every participant in every pension or 401(k) plan. We are all victims.
Ah, I see the attempted tap-dancing here. Yes, in a larger sense, but only in the sense that the harm to each individual can be measured in pennies. It’s trivially true.
In the specific sense, Goldman is the victim, and the harm to it can be measured in a very large dollar amount. It is in Goldman’s own self-interest, and for Goldman’s benefit, to see Gupta indicted, because not to do so undermines the market’s faith that confidential information entrusted to Goldman remains closely held. Goldman can lose hundreds of millions of dollars from what Gupta did. Me and my 401(K), I can lose, gosh, tens of pennies from what Gupta did.
cat
@burnspbesq:
Did you get the tipoff too? Do we have to ignore you because you didn’t? Wait, I forgot I already do.
different-church-lady
@wilfred: So that’s it: throw some tariffs on things and all the manufacturing moves back to America, right?
Or something completely different and unintended, and perhaps even more fucked up does. Who the hell actually knows?
John S.
@ Belafon:
Which is precisely my point. Great people can still do pretty fucked up things. Doing great things doesn’t make you a saint. It isn’t one or the other, as binary thinkers seem to believe.
gelfling545
@joes527: Yes, indeed. I personally love Apple computers but I would say that Jobs improved things for a certain section of society which does not equate to the world or all human life. If that improvement came an the expense of others lives/livelihoods that equals parasite to me. The idea that because he is deceased he is suddenly St. Steven of Apple is ridiculous. He was a brilliant inventor & an astute businessman. That doesn’t make him anybody’s moral compass.
different-church-lady
@John S.:
This is the shop: we’ve repaired your post and you can come by and pick it up this afternoon.
Martin
@wilfred:
And how do assembly jobs change that? You’re merely asking to expand the industrial sharecropper industry. Factory workers have always been and will always be nothing more than organic robots. And they will continue to be replaced by robots. Even Apple’s assembler is planning on adding a million robots over the next 2 years, replacing that cheap Chinese labor.
The real money in the iPhone is in the US. It’s in the engineers in Cupertino. It’s even in the retail employees at Apple Stores across the US, who earn health benefits even if they’re part time, and where full-time employees typically earn around median income for their area. 50% of Apple’s employees are in retail, and it’s the only retailer that is systematically expanding jobs because it’s the only retailer that is using labor to add value to the product. Honestly, would you rather have your phone assembled by a US worker (something that adds no value to you or to the product) or sold to you by a knowledgeable US sales person, or provide you with face-to-face support when you have a problem? Both of which provide value to you, and provide better jobs to workers.
You’re after the wrong target here. Those that offshore assembly are only offshoring something that really ought to not exist, and won’t exist given time. Fighting for it now is just stupid because even if we got it, we’d just as quickly eliminate it. In the near term, your target ought to be companies like Amazon, who has been absolutely decimating retail jobs and for the pleasure has been decimating state revenues by bypassing all of those sales taxes.
Companies like Apple are doing the reverse:
They’ve added 10,000 retail jobs since the recession started. They spend exorbitant amounts of money on their retail stores – about $10M to open each store. That’s local construction jobs, rent, and retail traffic. That’s local sales tax.
But longer term you want to be investing in the folks that make the robots, not in the robots themselves, because the jobs have been shifting from the latter to the former for decades now. And we’re not winning that here because people have been screaming about the wrong things. You want engineers, not assemblers. And if you need low-end jobs you should be screaming about bringing value back to what people buy. Who fucking cares where it’s made – there’s no value there. But Americans won’t pay more for a better buying experience, for higher quality, for better service. They’ll line up in the thousands to get $9 off that Black Friday special at WalMart. That’s what needs to be fixed – and that will create vastly more jobs than manufacturing will, and everyone will be better off for it – and it requires that jobs go where people are, which is what really matters because then you’ll lift all boats.
Rafer Janders
@burnspbesq:
Has it occurred to you that “what we want them to do something about” may in fact not violate any existing criminal statute?
Well, that’s certainly false. While some of the behavior was in an ethical grey area, some of it was also behavior that could be charged by any prosecutor with half a brain and a knowledge of how fraud works. Many of the securitized products were created and marketed and sold by people who knew and/or had reason to know that they were not as advertised, and this behavior was in violation of federal securities and other laws governing fraud.
But it’s nice to see you backtrack and acknowledge that, yes, the fact that people have been charged with insider trading violations that (a) were already being investigated before the financial crisis, (b) did not cause the financial crisis, and (c) were already crimes anyway, is therefore no response to the charge that prosecutors have not been aggressive in going after financial actors who caused the financial crisis.
To the extent that you have a valid beef, your beef is with Congress, not Preet Bharara.
I have no beef with Preet. I in fact know Preet and like him. Nice guy, and a fellow Bruce fan. The only person to mention Preet was you.
different-church-lady
@gelfling545: The real deal is that he became St. Steve when Apple’s market cap passed Microsoft’s. Before that he was some weird loner and Gates was the guy who changed the world.
wilfred
@different-church-lady:
Yeah, only this, yeah. I’m just killing time until Liverpool-Stoke starts but yeah, that’s the sum fucking total of a lifetime of red politics.
The market will fix everying, oi.
shortstop
@Rafer Janders: I don’t think you’ll be seeing Burns again in this thread. If you do, he’ll be studiously ignoring you. We’ve seen this movie a few dozen times before.
singfoom
@different-church-lady: MERS and LIAR loans (a tool to allow the banking industry to ignore lendee income) had nothing to do with Wall Street?
YMMV, but MERS was a creation of Wall Street banks from what I’ve read, and the entire securitization pipeline was set up to funnel those bad loans to the investment banks to turn crap in AAA gold through CDOS.
And it didn’t happen on Wall Street?
different-church-lady
@wilfred:
Dude, the market fucking BROKE everything. I’m with you on that.
See what I meant? (last sentence).
Mino
Well, I just wonder what would happen if Mr. Black was given a task force and told to investigate.
First, diarrhea would be cascading from those towers of capitalism. Then all those Steel-Eyed MOTU would be trampling one another to gain immunity by outing the others.
Maybe we could try that?
I can hear the screams…it will criple our economy. Well, our economy is on one leg right now because no one trusts Wall Street anymore.
wilfred
“Factory workers have always been and will always be nothing more than organic robots”
That’s just stupid, man. Henry Ford at least created a working class whose children could escape the industrial class, by paying them a decent wage, one that allowed them to send their children to school.
Your comment, filled as it with business school nonsense, omits the dignity of work, the fact that society itself is an economic construct (vide Freud, not Marx).
Personally, I believe in the inevitability of a Marxist utopia – and no I am not going to fucking discuss it – but until then there is the human and humane urgency of a class reduced to crumbs. Your solution?
singfoom
@burnspbesq: I don’t think my RICO fetish is absurd, but I don’t know why you can’t at least entertain the possibility that actual illegal acts occurred and it could be a larger issue….
Cheers
Rafer Janders
@burnspbesq:
As I’ve said on a number of occasions, “outrageous” and “illegal” are not synonyms. Far too many commenters here don’t get that. Yes, Rafer, I’m looking at you. You too, AA+.
You seem to be unaware of some of the recent (though extremely limited given the scope) fraud charges brought by the SEC against various financial actors. Here’s just one example from last week:
Goldman and Citigroup settled claims that they violated two subsections of Section 17(a) of the Securities Act of 1933, which only require proof of negligence. But in its initial complaint against Goldman, the S.E.C. alleged that it also violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, much more serious fraud charges.
http://dealbook.nytimes.com/2011/10/20/the-late-mover-advantage-in-citigroups-settlement/?nl=business&emc=dlbkpma1
So, yes, in this case “outrageous” and “illegal” were indeed synonyms. Of course, the SEC being the SEC, they let the firms pay a small fine without admitting guilt. But the fraud was there.
jprfrog
There was a time when this blog was a haven from the troll-infested threads of Salon; where there was some sense of logic and fair argument, and occasionally a jolt of real humor. No more.
I am left-center, but I am old (e. g. I thought that “Borat” was disgusting and utterly unfunny; my kids thought it was great) so maybe I’m just missing the point of these scream-fests. You are not going to change RC’s mind (such as it is) no matter what you say, so why bother?
But for the record, having read “The Big Short”, “All the Devils are here” and having a son who is a lawyer for one of the biggest investment banks, I think Taibbi is essentially right, and I can understand his anger (both for the reality of it and the obvious fact that many of the royally-screwed are NOT angry about it).
Chew on this: the way things are going, there is a huge crash coming, worldwide. When water is scarce and there are 9 billion people clawing for it, a lot of those people are going to die. And not just in sub-Saharan Africa and Central Asia, either. It may be too late, but all this playground bickering (“Am too!” “Am not!” “Your mother wears Army boots”, etc.) isn’t doing a thing but making everyone feel worse — and act worse. I wouldn’t care ( being 72 in two weeks means I will be gone before the shit hits big-time) but I do have a 4-year old grand-daughter, and she will be just coming into full maturity when the crash comes, give or take 10 years. And most of you will be around too.
different-church-lady
@singfoom: It may not be a question of mileage, it may be a question of degrees of separation. Sure, you can connect all these pieces up, but that doesn’t mean you can take a bunch of Wall Streeters and prosecute them for fraudulent loans they didn’t originate, now does it?
There’s lots of pieces to this ugly puzzle. One could probably figure out a lot of ways to prosecute a lot of people, but it’s would be complicated and you can’t just throw one book at everyone in the chain.
Jennifer
@Rafer Janders: I didn’t say fuck all about whoever that is.
different-church-lady
@Rafer Janders:
They still weren’t synonyms — they were both applicable, but that doesn’t make them synonyms.
In a perfect would they would be synonyms. We don’t live in a perfect world. And we don’t seem to be getting any closer to it.
Martin
@cat:
The wages really aren’t what’s driving all of this – at least on the tech side. It’s 100% time-to-market. If it takes you 6 months longer to get your doo-dad into the market compared to your competitors, you’re fucked, and in an economy where consumer demand is so freakishly skewed to Christmas, time-to-market matters in other areas as well. Toys, for example. If you want to get on the hot toy trend and you can delay your entry to market by a month by being able to ramp up faster, then you have a big market advantage. That’s what’s driving this.
But so what if we have state-of-the-art chip fabs here?
1: Half of that is driven because Intel has a near-monopoly in the marketplace and can set their manufacturing wherever they want. And kudos to them for keeping most of it in the US, but that’s not a condition you can expect to replicate in other places. It’s an outlier.
2: The plants are almost 100% automated. There’s very few jobs there. That’s why semiconductor prices plummet over time. It’s nearly 100% up-front-cost and nearly 0% recurring cost. So you get construction jobs out of it, but of the $4B or so that goes into a modern fab, location constrains a very small amount of the cost to regional jobs. The equipment in the fab can come from anywhere, and the design of the plant and equipment can also come from anywhere. You don’t think a small army of engineers depart the US every day to go to factories in China to oversee setup, tooling, etc? The plant might be there, but a lot of the overall salary that gets paid due to the construction of the plant goes to US workers.
Seriously, look at where the ACTUAL jobs are. People don’t think of Apple as a retailer but over half of their employees are in retail. WalMart employs 2.1 million workers compared to Intels 100K. You’re going to get so much farther simply by lifting the value of retail (and other face-to-face services) in this country than you would get if you moved ALL tech manufacturing from China to the US. Assembly is a lost cause for labor, not because of tariffs or any other fucking thing, but because it’s meatspace automation, and something that everyone, including the people that work there, want to get rid of. It’s a really, really shitty job even when it pays well. Why is anyone fighting for that?
shortstop
@Jennifer: Raj Gupta is the Goldman guy just indicted for insider trading — the person you just said Taibbi couldn’t have been expected to know about before he wrote his post yesterday. Indeed, he couldn’t have, and indeed, it doesn’t matter, given that Gupta’s indictment has fuck-all to do with what Taibbi is actually writing about.
singfoom
@different-church-lady: Fair enough, and I know I’m no lawyer, but that’s why I’ve been harping about RICO. It is clear IMHO that there was a criminal enterprise, a system to this entire scheme.
Are all of the players equally culpable? Absolutely not. I’m still waiting for a comprehensive investigation into the entire thing and for prosecutions for individuals who committed specific crimes to be charged with them, when the authorities have gathered said proof. I believe in our justice system, but I am incredibly disappointed by a lack of aggressive enforcement on the different levels of the entire crisis.
I’ll keep waiting for it, added to the list of ponies.
Cheers.
Rafer Janders
@shortstop:
I’m not sure if burnsy is admitted in New York State, but if so, he seems to be curiously unaware of the Martin Act. It’s state and not federal law, but is among the broadest antifraud provisions in the US, and prohibits “any fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale” of a security.
New York courts have traditionally interpreted the Martin Act broadly, as in People v. Federated Radio Corp. (the term “fraud” should “be given a wide meaning so as to include all acts, although not originating in any actual evil design or contrivance to perpetrate fraud or injury upon others, which do by their tendency to deceive or mislead the purchasing public come within the purpose of the law.”) The Appeal Court also wrote that the Act prohibited “all deceitful practices contrary to the plain rules of common decency” — which, yeah, does again tend to make “illegal” and “outrageous” pretty close bedfellows. This, needless to say, allows the NYAG and Manhattan ADAs fairly broad latitude in charging financial actors with a crime.
Also, too, unlike federal securities laws, which generally require proof of scienter (i.e. intentional or at least reckless intent to defraud), state prosecutors only have to prove the defendant acted negligently for a criminal misdemeanor charge. Therefore, financial practices that might not be considered as intentionally misleading could still result in prosecution.
TenguPhule
Wilfred vs Checked out of Reality.
The FSM loves me today.
Two enter, ideally neither leaves.
Go for the Murder Suicide Route!
Jennifer
@shortstop: Yes. Exactly. Thank you.
PGfan
While I agree with Taibbi that it’s the unfairness, the rigged playing field that has become intolerable, I think he (and many others) tend to forget that the playing field has been rigged far and wide, not just in Financial Services. (Or, more accurately, they focus IN on Wall Street which makes it seem as though that’s the ONLY area where manifest rigging and unfairness occurs.)
I think Chris Hedges makes the point well in saying that what we’re really talking about is the Rule of Law, and the fact that laws only seem to apply to “the little people” and not to those in power. It’s not just the the real estate meltdown – it’s being lied into wars with no one in power paying any price. It’s Bradley Manning being imprisoned rather than Dick Cheney or Donald Rumsfeld or any of the rest of the criminals from the Bush Era. It’s the criminalization of poverty, as Barbara Ehrenheich (spelling?) has recently written about – that to be homeless is to be a criminal because you can’t sleep anywhere, go to the bathroom, set up a tent, without breaking some law or other. It’s Troy Davis can be executed while Clarence Thomas can simply “forget” to mention all the dough his wife has been making from right wingers on his tax returns, just as he conveniently chooses not to recuse himself (along with Scalia) from cases where there’ conflict of interest.
It’s Rush Limbaugh getting a slap on the wrist for his illegal drug use while young people smoking pot can go to jail. It’s people who can be fired for discrepancies on their resumes while politicians can simply lie in our faces, sometimes multiple times a day. And FOX news can do nothing but lie all day long, 24/7 – with impunity.
And on and on. Wall Street is just a part of a larger problem.
Rafer Janders
@Jennifer:
No, I know you didn’t, I was responding more to burnwhatever’s claim that Taibi should have written about Gupta, who had nothing to do with what Taibi was writing about.
cat
@Martin:
WTF….
Intel’s fab plants cost over a BILLION dollars to build a new one or to retool. It employes over 1000 people who are highly trained value adders who earn more then ‘apple geniuses’. It has dozens of these plants world wide.
Intel has its own fab plants because it adds value to having direct control over the quality of Intel’s product.
There is an factory floor not 100 feet from me because its more profitable for it to be in the US under our control then outsourced to the cheapest labor zone.
Rafer Janders
@PGfan:
It’s the criminalization of poverty, as Barbara Ehrenheich (spelling?) has recently written about – that to be homeless is to be a criminal because you can’t sleep anywhere, go to the bathroom, set up a tent, without breaking some law or other.
Or, as Anatole France said, “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”
Sister Machine Gun of Quiet Harmony
@Reality Check:
Academic researchers. Poor African countries can’t pay high enough for it to be worth that much of pharma’s effort.
But, whatever. You can continue to suck your betters’ cocks. Clearly, it gives you much pleasure.
cat
@Martin:
You realize we been doing this 30 years right? Are you happy with the state of the US economy? With the job prospects of high school graduates? With the income of the average american?
Brachiator
From the latest CBO analyis, Income for top 1 percent skyrocketed over last 30 years
different-church-lady
@singfoom:
It’s clear to me that there was something of a loose enterprise that in a just world ought to have been illegal. Whether it actually was illegal or whether you could successfully prosecute for it are different questions that most of us are probably unqualified to answer with any certainty.
The other possibility is that when you have that many different groups of people involved in an interconnected system and they’re all angling to gain a sleazy edge, when the whole thing finally tumbles over it can appear to be a single, designed enterprise, but in fact it was just everyone doing their own shitty thing. It’s the financial crisis version of Murder on the Orient Express: everyone’s the murderer, but nobody is.
shortstop
@Rafer Janders: Burns is admitted in California, I believe, and in the Bar of His Own Mind. The guy’s problem is that he can never just come into a conversation and calmly explain why he thinks someone’s comment is misplaced. He unfailingly charges into the china shop with pompous and overblown opening statements like, “Raj Rajaratnam will be calling you shortly from his prison cell to tell you what an ignorant ass you are,” which makes others all too willing to call him on his constant errors. Maybe he’ll get a different result the 1,001st time, though.
Mino
@Rafer Janders: I wonder how fast TPTB can get passed a retroactive law that Federal standards of criminality preempt those of states. Maybe a rider on the debt ceiling? That seems to be the modus.
Martin
@wilfred:
My point is that human assembly adds zero value to the process. There’s nothing that a human can do in terms of soldering components inside of a phone that a robot can’t (someday) do every bit as well – and probably better. Short of economic charity, the assembly job should be eliminated, and economic charity isn’t sustainable.
Henry Ford did everything in his power to eliminate the assembly worker, but he was a century too early to do it effectively.
So rather than hundreds of people to design cars and tens of thousands of people to assemble them, we’re replacing that model with one where you need tens of thousands of people to design cars and hundreds to assemble them. And that’s worse? You want to help US workers, then find those parts of the economy where LABOR adds value, and put money there. When you buy your next doo-dad, don’t hit the ‘buy it now’ button at Amazon, but walk into a store, talk to a person for at least 15 minutes, ask them questions, and pay your sales tax. That will put VASTLY more money in the pocket of workers than demanding that the 3 minutes of assembly of that doo-dad shift from China to the US. Every time you buy something of value, DEMAND that a person be there to give you information, answer your questions, and spend a proportionate amount of time with you as the item costs, and pay a fair amount for that.
The primary problem I see is that most of the country yells and screams about jobs and offshoring and then when it comes time to actually pulling out your wallet, you make choices that yield exactly the wrong result. Everyone wants jobs and nobody is willing to pay for them. You have to fucking pay for them! Start paying!
Rafer Janders
@shortstop:
Yes, I admit it’s the unpleasant personality that got my goat. Had he been a little less full of himself and less insulting to others I might have let his idiocy slide.
I’m still getting over his claim that Goldman ISN’T a victim of Raj Gupta’s release of its confidential boardroom information. That’s certainly an, uh, very novel way for an attorney to look at insider trading statutes.
Martin
FYWP!
Paul in KY
@burnspbesq: The whole fucking lot of them indicted, convicted, and locked up.
cat
@Martin:
You have no clue about the scope of assembly manf jobs.
Foxxconn, makes of apple products amont others, alone employs almost 1M people and plans to increase its size to meet global demand.
Having a Foxxconn in the US would solve our unemployement problem.
tBone
@Martin:
Because of the dignity of work, and shut up, that’s why.
Linnaeus
@Martin:
A job that’s shitty but provides a modicum of security is still more attractive to a lot of people than a potential job that may or may not do so.
My grandfather was a good example. He never graduated high school (had to drop out due to the Depression), but after World War II was able to get a job in one of Chevrolet’s forge plants (I don’t know if his job was classified as skilled or unskilled). He didn’t like the job much, and 30 years of doing it cost him most of his hearing among other things, but it paid enough that he could buy a house, support a family (though my grandmother did work when their children were old enough not to need constant attention), save for retirement, etc. It’s hard to see any retail job that would provide the equivalent – companies like Apple are far more the exception than the rule – and the lived experience of those in communities in which retailers like Wal-Mart replace industrial jobs suggests that their lives, from an economic standpoint, are worsened.
wilfred
@TenguPhule:
Wow, long time, not retch.
Yo, what’s up with OWS in Israel?
How does one snort derisively in pixels? Is there a symbol for that?
Paul in KY
@PGfan: Preach it, brother!
Linnaeus
As an aside, the conversation about assembly, automation, etc. brings to mind this Atlantic article which is an excerpt from a book titled, Race Against the Machines. It’s not a completely sunny scenario.
Paul in KY
@different-church-lady: When you create fraudulent financial instruments, all for the express purpose of getting a huge commission, then that has to be illegal at some level.
Paul in KY
@Linnaeus: Alot of people are best suited to those kinds of jobs & wanted them. It’s the dearth of those good paying factory jobs that is about 1/2 the employment problem here in the US.
harlana
@Jennifer: oh yeh, got it. i thought he was talking about Herb, I couldn’t remember the other guy’s name / anyway, the polling data was a nice rebuttal, Taibbi didn’t really even have to say a word – that poll needs to go viral – blow that “jealousy” meme right out of the water before it has a chance to take root with the general public
and, no, I can’t find it on teh google yet, i believe it was a CNN poll
cat
@tBone:
Right, because some assembly/manf jobs are hellish it means they all must be or they can’t be made unhellish.
Of course when you export it offshore so its out of mind and out of sight it removes your the responsibility to try and do anything about it? Amirite?
So lets just ship all the hellish jobs offshore so we can all go into the nice shiny retail locations to be greated by smiling sales people and rejoice in how just our society is.
wilfred
@TBone:
Crikey, you’re a stupid motherfucker. So there’s no difference between making a thing, something with purpose, and serving a snot-nosed middle class twat at McDonald’s?
Of course not. Exhibit 9 zillion of why the Left cannot breathe the same air as the Democratic party.
bourbaki
In discussing Raj Rajaratnam it should probably be mentioned that he has been long suspected of financing the Tamil Tigers (see here for some of the speculation).
The Tamil Tigers are considered a Foreign Terrorist Organizations and a Specially Designated Global Terrorist by the United States.
It is quite possible that the FBI went after him for insider trading for the same reason they went after Al Capone for tax evasion…
different-church-lady
@wilfred:
Dude, you’ve just exhibited one too many obvious tells for me to take you seriously anymore.
res ipsa loquitur
Why do you need to qualify your opinion and/or his message in this way? You’re helping to turn him into yet another “unacceptable” liberal spokesperson. “I know Michael Moore/Al Gore is fat, but…” “I know Susan Sarandon is rich, but…” “I know Krugman is shrill, but …”
different-church-lady
@Paul in KY:
The point I’m trying to get across is that “has to be” and “is” are two different things.
Perhaps there are thousand and thousands of little illegalities, and perhaps they are not being pursued, but the public keeps looking for one big illegality, and it may simply not be there in the way they are looking for it.
Belafon (formerly anonevent)
@Martin: It didn’t just spring up in China magically one day either, so it could be done here, if the will existed in the right places. But part of that also is ending China’s currency manipulation.
Rome Again
Hmmmmm! I work seven days a week for months at a time before I take a couple of days off throwing newspapers for a pittance because I am happy with that kind of work (I don’t deal with overbearing egotistical maniac bosses that way) and I’m not complaining about the money I make or don’t make. I merely want a society where common citizens are treated fairly and those who have advantages to make a lot of money don’t run roughshod over us – but, apparently I must be dreaming. I’m just jealous that I’m not a millionaire* just like the Wall Street Bankers. Huh?
*I grew up the daughter of a millionaire, and I rejected that lifestyle as I saw the dishonesty and arrogance (and sadness) it created in my family. No thanks!
wilfred
@different-church-lady:
If you paid taxes from 2008-2010, you help pay for what I think. Since then, other people pay heaps to hear what I think.
You, my duck, are not even on the motherfucking radar.
Paul in KY
@different-church-lady: I’m only saying ‘has to be’, because I’m not a lawyer & up on the current law. If you take my framing of ‘fraudulent financial instruments’ as true, then there’s a crime there (the ‘fraud’ part).
Given the amounts, it has to be grand theft. I also think, like Singfoom, that you could use RICO on them (given the vast scope of the con).
They got Al Capone for tax evasion. Let’s check their tax returns too.
Paul in KY
@Rome Again: Will you inherit when they pass on?
different-church-lady
@wilfred:
I did, and it makes me want to rethink my support of the concept of taxation.
Your ideas are intriguing to me and I wish to subscribe to your very expensive newsletter.
Tissue Thin Pseudonym (JMN)
@Jennifer:
No, but I can slam Taibbi for previous articles in which he has claimed that no one was prosecuted for a specific case (Rite Aid) eight years after four of the executives involved had been sent to prison for that case.
The problem isn’t that Taibbi isn’t psychic. The problem is that he’s dishonest.
Rome Again
@Paul in KY:
No, They’ve both already passed on. I spent my teenage years being reminded constantly about what I was supposed to inherit so they could make me jump through their hoops. They pitted siblings against each other in the “who gets what” game. In the end my mother died penniless and owing a hefty water bill after pissing six million dollars away. My father’s assets went completely to her, and she made sure that there was nothing left.
different-church-lady
@Paul in KY: To be clear, in many ways I agree with you. It sure as hell smells like something illegal had to be going on, and that stench can’t just be our imaginations.
But I’m not a lawyer either (and it’s refreshing to talk to others who admit that kind of thing). Maybe they can nail these guys on something and won’t. Or maybe it’s harder than it would seem based only on the stench.
In the end Gramm–Leach–Bliley was probably the enabler of all of this. This stuff ought to have been illegal. It used to be illegal. But Gramm–Leach–Bliley blew holes in the floodwalls and the Orcs came pounding through (to mix up imagery).
different-church-lady
@Tissue Thin Pseudonym (JMN):
Or perhaps he’s neither — he’s just sloppy. In “journalism” there’s a lot of that about.
Paul in KY
@Rome Again: Well, you’ve been vetted & are officially one of us ;-)
Sorry for what you & your siblings endured under your parents.
Rome Again
@different-church-lady:
Less regulation = legal swindling.
Lee Hartmann
@209; Google “William Black” to see what he has to say about the fraud in Wall Street activities. He was on the 80’s savings and loan debacle, where people really did go to jail.
Taibbi’s style suits me just fine. It’s called the truth.
Paul in KY
@different-church-lady: That’s the one where they basically re-legalized bucket shops, right?
Phil Gramm is one of the most odious things I have ever come across in my years following politics.
different-church-lady
@Rome Again:
Exactement!
Martin
@cat:
No, I agree with why Intel does it, but they do it because it’s in Intel’s best interests, not because it’s in US workers best interests. (For the record, I adore Intel – they’re an absolutely fantastic company).
But that $1B didn’t turn into $1B in US wages (and it was probably more like $4B if it’s a recent fab). Most of the cost of that fab is in the equipment, and the equipment can come from anywhere. It can just as easily come from China as come from Austin, so declaring it as a $4B investment in America may be completely misleading, it may be a $1B investment in America and a $3B investment in China. If we’re going to be honest here about the impact of doing things in America, let’s be honest about what it gets America.
But you’ve actually reinforced my point. Let’s look at that $1B investment. We’ve gotten 1000 jobs out of it. Apple gets WAY more jobs out of $1B worth of retail stores. Starbucks gets WAY more jobs than that out of $1B worth of coffee shops. Apple has more cash than any other company on earth. If they dumped their entire $90B cash horde on Intel-like fabs in the US, they’d generate 90,000 ongoing jobs. If it costs $1M to create a job, we’re pretty goddamn fucked. If we invested the entire US GDP, we’d get 14 million jobs out of it – which is right about how many US workers are unemployed.
That Intel fab is insanely productive on a per-worker basis. If you eliminated all of the automated work in the fab (which is most of it) and replaced them all with human workers, the productivity would drop precipitously. The ability to build the plant would be gone because they’d never recoup their investment, the average wage would drop precipitously because productivity would be so much lower, and rather than have high-level manufacturing and engineering jobs (I bet half of those 1000 people have engineering or similar degrees and a hugely disproportionate number of those employees have MS or PhDs as compared to the population at large) you’d have a mountain of minimum wage, menial jobs.
And what of the lead-up industries to build that plant – from the mining operations to the manufacturing of materials and equipment on up? Intel is skimming off the cream from that chain and leaving most of the other bits to other parts of the world, and no small bit of it to China as well. Well, Apple is doing the same, as are a lot of other companies. They hold on to what has strategic importance and hand off the rest. To Apple, assembly isn’t strategically important any more than mining silicon isn’t strategically important to Intel.
But Intel has effectively replaced the non-value-add components in the manufacturing process that they control (as has Apple), and are now only left with the knowledge and skilled workers. That’s exactly how all US companies are changing, but we don’t have enough of those workers (and I won’t go into the various crimes the educational system and US society are guilty of here) nor is there enough demand for these workers to employ this entire nation. So Intel’s fab is great, it helps, it employs good workers, but there’s simply not enough scale there to have a meaningful impact and there never will be. It’s not going to employ 14 million people. What will? Assembly could, but if we got that many million people offsetting those Chinese assembly jobs, we’d just as quickly eliminate the jobs through automation because most of them aren’t value-add jobs. If you want to create 14 million permanent jobs in this country, yeah, more Intel workers are good and help, but only a tiny, tiny, tiny bit. Instead, ask yourself what jobs are value-add jobs and can scale and you’re left with service-level jobs. Face-to-face jobs. Retail, support, health care, education – things that US consumers should insist on seeing a face before turning over their money.
Eventually a lot of those jobs will get eliminated as well, but that’s a ways off yet. Ultimately, however, we’re fighting a losing game because we’ve constructed an artificial equation and are trying to push and shove the world economy to balance it. That artificial equation is:
40 hours/week * working wage * 50 weeks output/year * 20-65 year olds in America = demand
And we’re trying to push and shove the demand side of the equation at the same time that we’re making massive productivity gains for output per worker-hour. Simply put, we’re hitting points where at least in the US, the workforce standard (that 2000 hours per year part) exceeds the viable demand from the nation. We’ve been trying to ramp up demand, and that keeps blowing up on us. The only way to do it is to ramp up demand outside the US, where there’s plenty of room to grow, but that benefits from free trade, which everyone opposes. So if we want to treat the US as a closed system, eliminating free trade would result in massively more unemployment either now or somewhere in the future.
One alternative is to recognize that those high-wage workers here are super-productive and make them less so. Put them on a 30 hour/week schedule or give them 3 months vacation per year, pay them $75K per year instead of $100K, and create 33% more jobs there. I mean, if we want the high-wage, super-productive jobs, great – but there will be fewer overall jobs because that super-productivity comes by eliminating labor. Always has. Or we can trade out those jobs simply by changing the workforce standard for more lower-paying, but better quality of life jobs by artificially making them less productive by cutting hours. And there’s nothing wrong with that, because the workforce standard is arbitrary to begin with. 40 hours per week isn’t some kind of universal constant or anything.
Corner Stone
Retail jobs are a race to the bottom. I’m not sure why anyone is arguing we should actively strive for more of them, or how we “lift” them?
It’s impossible to “Apple-ize” most other environments in retail. The consumer has been well trained to anticipate certain conditions.
Rome Again
@Paul in KY:
Thanks! Actually, the mental abuse in the family was much worse than the financial games. The financial games are folly. The alcoholic mother with control issues was MUCH worse! I survived, barely. :)
Corner Stone
Over the last several months I’ve been noticing something at my local grocery stores. More and more of the workers I see there are adults. And not older adults for the most part, people in their late 30’s and 40’s. Fewer and fewer high school age kids doing those jobs.
different-church-lady
@Paul in KY: I dunno about bucket shops, but here’s how the all powerful wiki describes it:
Yeah, what could possibly go wrong there! Who needs more than one
basketgigantic silo for all the eggs?The economy collapses. We put laws in place to keep it from happening again. 60+ years go by and we take down the firewalls. The economy collapses again. WHO THE FUCK COULD HAVE PREDICTED?!?
Rome Again
@different-church-lady:
Your turn! Exactement!
Martin
@Linnaeus:
But there are better jobs to give them. MUCH better jobs. Focus on those instead. Apple spent more money last year on industrial robotic equipment made in Japan than they spent on assembly labor in China. It was equipment to perform functions that humans can’t do. That money could have come to the US and gone to engineers and computer programmers but it went to Japan because Japan kicks ass at that stuff, and Germany is next. The US lags. And those are better jobs, better paying jobs, and better jobs to retain in the US because they have long-term economic benefits for the nation than assembly does.
Your grandfather is a terrible example. So is mine. They’re terrible because the ability to replace the job he had simply didn’t exist at the time so we had to put a human in it – we had no choice. It’s not 1950 any longer, and it’s time for those jobs to vanish, just like the millions of jobs that existed in the 19th and 18th centuries that no longer do today. We don’t need to send a million workers to Panama with shovels in hand to catch malaria and dig a big fucking canal to the expense of hundreds or thousands of lives. Its called progress, and we used to be all about that. The people demanding assembly jobs in the US are every bit as backward as the Republicans demanding that we abolish birth control. It’s regressive and counterproductive.
different-church-lady
@Corner Stone: Okay, this is really weird on two levels:
1) You’re not being a snarky dick
2) I agree with you
It seems to me the people who propose grand theories of how national labor markets should plug into the global picture ignore a simple fact: human beings are not a monoculture. In any given population there will always be people more suited to manufacturing, others to retail, others to service, etc. The idea that we can carve up the globe into different zones of labor — all manufacturing here, all retail there — simply ignores the realities of humanity.
It’s a great intellectual exercise — very satisfying it its tidiness, and all that — but we’re never going to teach our way into that world, and we’re never going to figure out what to do with all those people suited to manufacturing type jobs. We sure as hell can’t ship them overseas to the designated manufacturing zone, and besides, the argument is that soon human beings won’t even be involved. So we’ll somehow magically retrain them into being suited for… what? iPad salesman? How dose a job market function when everyone’s selling gadgets to everyone else? Ask Orange County how it worked out to have vast swaths of their labor force in realty.
Corner Stone
@different-church-lady:
I’ve been on projects that brought work back onshore for companies. They did it for different reasons, but mainly in one way or another they felt it benefited the company.
So to say it’s really hard may in fact be true. But with the right incentives it’s certainly very possible.
The problem doesn’t seem to be how really hard it is but rather the people who could provide the incentives have been thoroughly captured by extremely shortsighted looters.
Corner Stone
@different-church-lady: I was saving it.
Corner Stone
@cat: I think we have located the single largest holding in Martin’s retirement account.
Tissue Thin Pseudonym (JMN)
@Rafer Janders:
Note: I am not a lawyer, but I have studied securities law as a part of getting a masters degree in accounting.
Fraud is a very tricky thing. It has a number of elements that must be satisfied or it doesn’t exist. Some of those requirements make it significantly more limited than a common sense definition would. Some of them are that the fraud must not only be intentional, but also known to be fraud. This means that you have to pin the specific acts to a specific individual. You can’t just charge everyone involved. One particular person must have violated all of the parts of the statute.
It is also the case that the misleading information was material. This means that it must have effected some party’s willingness to buy the product and that with the correct information, they wouldn’t have done so. In these cases, that’s a real problem. Take the instance where Goldman ended up paying a nine figure fine to sewttle the case. That’s probably the best the SEC could have hoped for, because it would have been very difficult to prove that the defrauded party (a German bank) would have behaved differently. In part, that’s because the motivation of the bank to enter into the contract had to do with German banking regulations and what was considered Tier I capital at the time. It’s possible that the bank would have entered into the deal even with full information, because it badly needed to make its capital requirements. Further, the SEC (or, if there were to be criminal charges, the DOJ) would have had to *prove* and that would have required the German bank to be willing to let both the government and Goldman to rummage through all of their records.
What burns has said above is true: finding specific violations of securities law is hard to do. There are a lot of picky little details that have to be satisfied. People saying, “Oh, but there was fraud and it should be prosecuted,” are worthless. Point to specific charges you would like to see filed, with reference to the US Code, in the case of the feds.
Beyond that, though, even if prosecutors are really damned sure that criminal behavior took place, it’s really fucking hard to prove in a court of law. You need specific documents linking specific individuals to specific acts. If you don’t have those documents, many of which probably never existed thanks to cell phone communications. (Financial institutions are required to preserve recordings of all phone conversations and emails, but this does not apply to individuals’ personal cell phones, which is why they are used to conduct so much business.)
Even then, getting convictions are hard. Financial regulations are complex, and it can be very difficult to get a jury to understand them. Defense attorneys are very good at muddying the waters to the point that the jurors acquit simply because they don’t comprehend what happened.
Even Matt Fucking Taibbi admitted this, though he promptly proceeded to miss the point. Above I linked to a disputation I wrote about one of his articles. From that article:
Do you see the importance of this? Even with incriminating emails, DOJ couldn’t get a conviction. Given that, why all of you insist that they would be convicting people left and right if only they really cared eludes me. They’re not prosecuting, because they don’t think they can convict.
As for the invocation of RICO, that still applies. Aside from which, I find the enthusiasm for RICO held by people who moan endlessly about the dangers of executive branch overreach and giving the government too much power to be rich. The RICO statutes are a fuckload more dangerous than the decision to assassinate an American citizen/terrorist in Yemen, and yet you want to encourage their usage? The same goes for the Martin Act; it basically allows the New York Attorney General to go on a fishing expedition within a company and expressly provides no requirement that he keep confidential the things he finds on discovery. Beyond the fact that it’s unclear that the Act isn’t preempted by federal statute in these instances, I find it highly unlikely that this US Supreme Court would let such a prosecution stand, particularly given their evisceration of the doctrine of honest services fraud, which wrecked one of the primary ways that the bankers could have been prosecuted in the past.
Corner Stone
I’ve got an idea, let’s outsource all our manufacturing and also outsource the supplies of automation we need for any manufacturing we continue to process.
Then we can have 1 Plant Manager run 10 different automated plants with a crew of 1 QC Manager. They can outsource any IT calls to India, who can contract out 4 hour SLAs to local temp agencies.
Wait, I think someone beat me to it…
Tissue Thin Pseudonym (JMN)
@different-church-lady: No, if you read what I wrote about that article, linked above, it’s pretty clear that he was dishonest. No one who was honest would have failed to mention certain elements of the events.
I also think no one who was honest would have failed to know about those elements, but then I think one of the required elements of honesty is that you don’t make strong statements of facts in a piece of paid journalism without knowing at least what can be found in a Wikipedia search. Not doing so goes beyond being sloppy.
Martin
@Belafon (formerly anonevent):
Of course not, but I already covered that. It sprung up when the national government drew a line on the map and said ‘we’re going to bomb this place with infrastructure’. We’re way past fantasies about ousting Ben Nelson to get that to happen in this country.
Have you ever seen what those Chinese ports look like? They’re fucking amazing and make US ports look like, well, like our ports made Chinese ports look like 30 years ago. This is their moonshot. This is their Hoover Dam. And this is never going to happen in the US unless it happens accidentally because we lack the political will to do it. They’re building an economy by pouring money into it, and we’re doing everything in our power to tear ours down in the name of saving our billionaires a few bucks.
Currency manipulation is so tangential to the problem as to be irrelevant.
different-church-lady
@Corner Stone:
Agreed, and I didn’t mean to imply that difficulty equaled impossibility. I have, however, found through experience and observation that difficulty is easier to overcome when it is acknowledged rather than denied. My original quote addressed the attitude certain people put out of, “The answers are very easy and you just won’t do them!” Well, no, maybe the answers aren’t that easy. It doesn’t make it impossible, it doesn’t mean it shouldn’t be done, it just means it’s going to be harder than that person thinks.
And entirely accurate and succinct assessment, IMO. It’s been at least 30 years in the making, and the unmaking will not be quick.
singfoom
@Corner Stone: Ah, such sweetness. My favorite thing about the whole offshoring was the creation of “Distributed Agile Development Teams”.
One team here in the US, one in India, a PM for each team and an arch PM over the whole project. What was the number one problem? The indian team ignoring the US team and overwriting their code!
So telling the business, yes you could have development going 24 hours a day (by having 2 teams in different time zones), but the overhead of managing the process? And the issue of a cultural development divide? Such large issues that you’ve gained nothing. You could have just kept the US team working….oh well. I’m sure someone got a bonus for the idea….
rf80412
Reality Check – October 26, 2011 | 11:10 am · Link
I’d really like to know: is the late Steve Jobs a great innovator who vastly improved human life and productivity, or a scum-sucking parasite and cheater whose wealth should have been redistributed a long time ago?
P.S. Banking CEOs are not the highest paid, not even close.
Steve Jobs became a parasite when he stopped designing and building computers. Bill Gates became a parasite when he stopped writing code. Even if you believe that there’s value in “vision” or just organizational skills, eventually your company can grow so big and you rise so high that 99% of the brainstorming and decisions will not involve you in any way, and the 1% left over consists of “executive summaries” that are literally one page long and written not only to scrupulously avoid technical language, but to direct your singular will and free spirit to sign off on a course of action that a bunch of your subordinates have already decided on amongst each other.
What I find most objectionable is the notion that these guys were/are magic men without whom all the thousands of people over 30 years who actually designed, built, tested, and marketed Apple’s and Microsoft’s products would have just sat on the ground and starved to death without Jobs or Gates giving them someone to obey.
chopper
@cat:
a billion dollars to build or retool one fab plants employing a thousand people? doesn’t that prove martin’s point about how automated intel is?
Shawn in ShowMe
http://prospect.org/article/germanys-economic-engine-0
What will it take before cheerleaders of the outsource manufacturing model admit we’re doing it wrong?
Rome Again
@different-church-lady:
True, but the people pushing this aren’t thinking about real world consequences. They are thinking about how easy it would be to place some game pieces on a game board and move them around and control them to the utmost!
Mino
@Tissue Thin Pseudonym (JMN): their evisceration of the doctrine of honest services fraud
The Skilling appeal, right?
Might not need that retroactive law if the Supremes get hold of the appeal.
cat
@Martin:
an Intel Fab worker or Fab plant generates a lot more GDP then the same apple retail employee or barrista which is why your analogy is wrong.
That Fab employee creates the product that pays for multiple R&D jobs at intel and intels suppliers upstream of the fab employee and shipping/transportation/infrastucture jobs downstream are created to move the product to market.
A Barrista’s GDP multiplier is significantly less as the product/serivce they supply is so low value.
We are getting off into the weeds of economics here, but hopefully you understand a job that creates $1M worth of product a year is better for the economy then a job that creates $50k.
Now regards to the social policy, A fab plant that supports R&D jobs, manf jobs, office jobs, and no skill jobs is more desirable then 20 baristas as the mix of jobs it creates up and down stream of it are much narrower.
Maybe apple is the right model of a completely verticle company, but if you have 90B in cash you are significanly underpaying your workers and given what we know about how apple products are made I believe its the assembly workers.
Rome Again
@Shawn in ShowMe:
They never admit they are wrong. They never learned how.
Corner Stone
@singfoom:
I’ve made this comment here before but I’ll summarize again.
Manager proposes project offshore and powerpoints a 20% reduction in costs while maintaining delivery schedule. It’s approved.
He then refuses to staff up to deal with the overhead involved of the issues you raise.
Project comes back onshore at last minute and US team works round the clock to debug. They fix the project but with associated costs it’s closer to 0% – 5% cost reduction.
Manager gets his bonus based on the 20% cost reduction, gets promoted and leaves the next guy to explain the gap in next FY Budget.
Martin
@Shawn in ShowMe:
But we don’t outsource advanced manufacturing. That’s what the Intel plant is. We outsource low-end manufacturing.
The reason Germany has more advanced manufacturing isn’t because they have better tariffs or less outsourcing, its because they have a better educated population – they have more engineers, scientists, mathematicians per capita than we do. In fact, almost every country in Europe does. We’re relatively strong in the life sciences, but weak (as compared to Germany) in anything that leads to advanced manufacturing.
Just anecdotally, compare the quality of the US automotive industry to the German one. Ignore the manufacturing and assembly side of it since that’s a mish-mash of low and high-end, but look at where automotive innovation comes from – airbags, ABS, traction control, all of that stuff. They simply destroy us on that front. Almost every new bit of automotive innovation in the last few decades came out of either Europe or Japan. And it’s the new bits that you control. That’s what Germany holds onto. Not the stuff invented 50 years ago that can be done with unskilled labor in Malasia, but the stuff that requires precision machining, electronics, advanced materials, and so on. We don’t do that any more because we don’t turn out enough talent from our own population and we have to import too much of what we do have.
cat
@Martin:
Holy fucking shit dude….
They invest in robots because its the key to sustaining their edge against low cost and low productivity zones like China.
We choose to ship the jobs to China, so who gives a crap if we could improve the productivity of our assembly/manf factories when we could realize that same profit as making our US workers more productive.
Or it could just be a huge coicidence, amirite?
Corner Stone
Boeing from 2006
“For the first time, with the 787, Boeing is outsourcing more than 70% of the airframe and is giving all aircraft suppliers the responsibility for doing the detail engineering designs. The Japanese and Italians are designing and building the composite fuselage sections and the wings. The Russians are contributing key engineering talent — particularly in the area of designing titanium aircraft parts.”
Boeing from 2011
“Outsourcing is a bit like taking collateral from your repo operation and investing it in subprime credit. Most of the time, you make a small amount of money — and then, occasionally and unpredictably, you lose an absolute fortune. Boeing was picking up pennies in front of a steamroller, and ended up getting crushed.”
Linnaeus
@Martin:
I understand the point you’re trying to make, but the comparison between those who would like to site more assembly-type jobs in the US and anti-birth control people is grossly unfair, and I’m frankly quite surprised that you would even make it.
It’s fine if you think their view of the ideal composition of the labor market is wrong, but a lot of people who are despondent over the offshoring of manufacturing are not simply stupid Luddites (another misunderstood movement, IMHO) who don’t know how to get with the program. They’re reacting to the simple fact that income inequality has been worsening for years and that the rising tide has not, in fact, lifted all boats. Not everyone benefits from technological innovation and automation; some folks lose very badly and never recover. That’s something we miss when we remove the economic changes of the 18th and 19th centuries from their historical context; yes, a lot of new jobs were created, which is great, but a lot of people got thrown onto the scrap heap and when they fought back, they were repressed for doing so.
You’re probably right that lower-skilled jobs will not return anytime soon, if ever. But this has been going on for years, and our collective response as a society has been:
1. “Sucks to be you. Not my problem.”
2. “Go work at the Wal-Mart. You should feel lucky to even have a job.”
3. “Dumbass. Go learn to be a computer programmer.”
(Of course, in the case of #3, when it’s discovered that people in other countries can write code just as well and can do so for less, then offshoring becomes a big problem and then it’s imperative that we do something.)
In the face of all that, I can’t blame someone for being skeptical that going to work at the Apple Store is going to be a viable solution. Again, I’m not saying that we shouldn’t think carefully about labor trends and be honest with ourselves about where the jobs are, but that it’s rational for someone to doubt that they will benefit from these new trends when they haven’t for several decades now but do remember when their communities had good jobs.
I guess I’m less sanguine about the prospects of “upgrading” retail jobs a la Richard Florida to solve the labor problems we face. I could be completely misunderstanding the situation (I kind of hope I am, actually). But the trends in how we produce and distribute goods seem to militate against upgraded retailing. If you can get a computer that does more or less what you want on the internet for cheaper than a computer that you would go to an Apple Store to buy, most consumers will take that route. Apple’s market strikes me as a high-end niche market that, while impressive, I’m not sure can be expanded to other retail concerns. Especially if it’s not clear just what value is added when you can already get a similar product more easily and for cheaper.
Temporarily Max McGee (soon enough to be Andy K again)
@Martin:
Which has a lot less to do with the number of engineers, scientists and mathematicians but more to do with the priorities set in the boardrooms in Detroit. In fact, those boardrooms treat their engineers as temps, cutting them loose after the new line of car is in the showroom. Treat current engineers like temps and there’s little incentive for students to study in the field of automotive engineering.
cat
@chopper:
I’m not seeing why an automatic manf/assembly job is less good for the economy. In the case of Intel that fab plant supports more white color and more techology empoyees then it could then if it required 5,000 employees to manf the same amount of goods.
If we keep offshoring our manf to China they will eventually start having to make their workers as productive as US workers and when that happens then will be able to start competing against us in the Design/Devevelopment of the widget market.
Whose PO is going to get the best workers and fastest turn around time once Foxconn starts making iPad/iPhone clones they could legally sell in the US?
Whats going to happen to our white collar jobs then? Whose going to buy things from those cheerful baristas and apple retail employees?
soonergrunt
@wilfred:
Riiiiight.
Did I mention that I’m rich, powerful, handsome, perfectly physically fit, and have a nine-inch cock?
cat
@Martin:
Only because a lot of our advanced manufacturing is tied into national security and can’t be oursourced.
I dont know if you remember, but the company that made the nightvision goggles the US military use got into trouble for outsourcing it to China.
cat
@Corner Stone:
I think this strategy is taught in the MBA course work at every major university.
BTW, your troll quotient is way down in this thread, or is it just that you agree with me and I’m missing it? :-0
Shawn in ShowMe
@Martin:
From the same article,
“By contrast, the American model, in which companies like IBM, Boeing, and Hewlett-Packard readily transfer even many of their most advanced production technologies to foreign subsidiaries, clearly hastens the demise of American economic leadership.”
And who says that only multibillion-dollar high-end manufacturing plants can produce a decent wage?
http://americanmanufacturing.org/blog/what-can-us-learn-high-wage-export-powerhouse-germany
http://americanmanufacturing.org/blog/what-can-us-learn-high-wage-export-powerhouse-germany
Mark D
As I told a conservative co-worker who said essentially the same thing as Cain (they must have all received the same talking point blast fax/email):
It really is that simple, and anyone who doesn’t get it is either in the 1%, or is too stupid or too ideological to even deal with any more.
tBone
@wilfred:
Well, since you asked – I don’t see a whole lot of difference between bolting together a smartphone and working at McDonald’s, no. In either case you’re a cog in a shitty assembly line environment that is expressly designed to serve middle class twats.
But that wasn’t what I was getting at. Martin wrote a long and thoughtful post about the difficulties of moving off shored tech assembly jobs back to the US, and you and cat responded with empty sloganeering and wistful bromides about The Way Things Used To Be instead of addressing any of the specific points he raised. How about demonstrating to stupid motherfuckers like me how you would translate your principles into pragmatic action?
cat
@Shawn in ShowMe:
You win the thread.
Anways that reminds me of a guy I meet in Kansas once, his family made some line of machines that turned spools of wire into something usefull. Thats not that cool part, the cool part was he was living in a retired nuclear missle site.
At the time it was pretty cool, but thinking about it now I know I would have fallen into one of the many silos by now. :(
cat
@tBone:
Actually he wrote long posts about why we should move all ‘low skill’ assembly jobs offshore. They may have been thoughtful, but they were wrong.
And I only snarked on you until Martin showed how ignorant he was by saying moving all the tech assembly jobs back to the US would some how not be as good as making 14M low skill service industry jobs.
We couldn’t even move move a Foxconn level of jobs back to the US without overheating the economy as the tech assembly segment is that big.
Martin
@cat:
But you’re clouding the issue here. The issue is DOMESTIC JOBS, not economic output. I agree that Intel creates more economic output – no question, and I agree it creates better jobs – no question. But does it create MORE DOMESTIC JOBS? Not necessarily. Where it does create more jobs, many of those jobs aren’t domestic jobs because the manufacturing, office, and no skill jobs can be anywhere. They may be in the US. They may not. Samsung has a nice big semi fab in Austin, but a lot of those up and downstream jobs are in Korea. Intel makes a lot of domestic jobs because Intel is domestic and those up and downstream jobs ultimately flow to Santa Clara. You can’t leave that out of the discussion.
The majority of that fab investment exists not in the construction of the plant but in the cost of the equipment that it contains. That’s going where? Applied Materials? TEL? ASML? Where are those jobs? Well, they’re fucking everywhere, so that multibillion dollar investment gets distributed all over the goddamn place, creating jobs everywhere, and that’d be true if the plant was built in Austin or in Korea. (Still better to be in Austin – don’t lose me here.)
And that $1M worth of product per year is great for the economy but that also trickles down. Who makes your silicon wafers? Sumco? SEH? Both Japanese companies with facilities also all over the world. So that $1M worth of product returns to domestic labor for you (good) for the infrastructure around you (good, but a much smaller amount) to the transportation to get it there (also a smaller amount) but also gets fragmented up to other workers all over the place and for raw materials all over the place.
What matters is the value-add. If you’re inputting $100K worth of materials (unfinished and finished) and outputting $1M worth of materials, then yeah, you’re kicking ass and dropping $900K on the domestic economy, a hell of a lot of which is likely to wind up in the hands of workers.
If you’re inputting $900K worth of materials and outputting $1M worth of materials, then you’re only dropping $100K on the domestic market, which is good for you (since most of that is your salary + benefits) but doesn’t leave much for other people.
When you look at Chinese assembly labor, their value-add is extremely low. If you put US workers in there, their value-add would be exactly the same, but their cost would be different. If you want to see value-add at work, go to Tiffany. They’re inputting a $1000 in materials and outputting it at $10,000. That’s a HUGE value-add for the domestic economy, but very low volume. You want to see an even better value-add – go get a massage. You’re taking close to $0 in materials and outputting $100. And Starbucks isn’t so bad – probably $.25 in coffee+ cup output at $2.50. A HUGE percentage of their revenue goes into domestic labor. For Intel – it could be huge, but it’s really, really hard to say because it’s just so insanely diffuse.
Much of the anger behind this whole OWS movement and the parasite mentality up top boils down to ‘how much of revenue do these outfits return to domestic labor’. In the case of the banks and Wall Street it’s absurdly low. It used to be much higher, and then we invented computers and the internet, and now they gulp money with a very small workforce. Honestly, they’re where Intel dreams they could be, but the technology doesn’t exist to get there. And outside of retail, Apple dreams they could be there as well. Wall Street simply has better tools at their disposal, but they’re all heading toward the same goal.
But Apple is doing this other thing. They don’t do it to be noble, it’s just that they recognize something that the rest of the market hasn’t quite caught up to – and its that there’s a chunk of the consumer population that will pay for an actually good retail experience, if there’s value in that experience. So they’re dumping money into the value of that experience, which mostly comes down to taking the burden off the retail staff to do the hard sell and by dumping fucktons of staff into the stores so that you don’t wind up waiting as soon as 4 people decide to buy something simultaneously. 9:30 PM at my local mall, other stores will have 1-2 employees, Apple will still have at least 30 staff on the floor of an 8500 square foot store. A lot of people are willing to pay for that kind of value-add. What about other industries? Home Depot used to have great staff until Lowes drove down labor costs by hiring unskilled staff. I’d gladly pay more for skilled staff, and I did, but I no longer have a place to go. Given two shitty retail experiences, I might as well pick the cheap one. Give me value, and the best place to deliver value is through staff, and I’ll choose differently.
And it’s not like there’s some intrinsic worker-capability problem here. We used to have vastly more retail jobs in this country than we do, even before we did in 2008. Clearly we have workers suitable to for the activity. What we don’t have is management suitable to getting value out of them.
AA+ Bonds
I am so genuinely glad this turned into a substantive debate over production since I last posted in this thread – these are good conversations to have
AA+ Bonds
@Martin:
Their employees are overworked and underpaid like hell and the “culture” in the company implies that they can be replaced at a drop of a hat to push them to work longer hours, if any of that matters
Ruckus
@Martin:
Nice posts.
But I think you are on the losing side of the battle. People seem to only want simple answers. Legislation can only be three pages long! No matter how complex the problem. We want jobs!
We are a consumer society. Period. Do we want to change that? OK, but many things then have to change, such as things you pointed out. I wonder how many people know how much automation is in production these days. And that a lot of that automation technology comes from offshore. The things we want to consume are better made by automation because they require many repetitive tasks to get to the volume of production that lowers prices. That alone eliminates a lot of the old jobs.
So how many retail jobs are there for products that don’t really require a high level of service? Cars are more complex but seem to run much better and last longer than they did 30-40 yrs ago. Fewer auto repairs, fewer auto mechanics. Need better training, cost more, required less. Cell phones, sure we hear about the bad ones but out of how many million? Do we repair most of them? No, we replace them with newer/better. Fewer repairs, fewer repair people. So how many well trained, experienced retail workers do we need? More UPS/Fedex drivers maybe but retail to replace the internet? Not gonna happen. Perceived low prices are still the driving force for the vast majority of people. And I own a retail store, and provide service that most of my customers need because they don’t have the training/experience to set up/fix the product.
The problem is not internet-retail, it is the expectations of the consumer about the products and the level of service needed by those products.
AA+ Bonds
@Shawn in ShowMe:
The secret to Germany’s export-driven success may also be that they don’t issue the world’s reserve currency (we do) and they don’t want to do it either.
AA+ Bonds
@Ruckus:
I don’t know if this is intentional but it sounds like you’re leading into a Marxist crisis analysis, and honestly, you can’t do any worse than the Keynesians, neo-classicists, etc. have done so far on this one.
Martin
@cat:
No, those CNC machines are installed in those low-cost and low-productivity zones. They bought those machines to lift themselves slightly above the low-end manufacturing into a somewhat more advanced manufacturing range that competitors couldn’t reach, but was still suitable in China. They don’t make parts faster/cheaper, they make parts that are too advanced for laborers to do. If the assembly robots come to pass in the next year or two, then Apple will likely have eliminated 90% of the jobs that people think should move to the US and upgraded 10% of them to more advanced (and presumably higher paid) manufacturing jobs. In another 5-10 years, those jobs as well would likely be eliminated, and Apple assembly will look a lot more like Intel fabrication with a massive up-front capital expenditure in equipment and a relatively small, high-productivity, high-wage workforce. That’s when you may see it return to the US – but it won’t bring a ton of jobs with it (some, sure). The job creation opportunity exists in that capital expenditure phase – designing and making the manufacturing and assembly robots. You’re looking one generation behind where you should be.
Corner Stone
@Ruckus: I disagree that people here are demanding we look into simple answers. Speaking for myself, I’m saying the outcome is not inevitable. I’ve seen work return, and provide jobs for actual human beings.
IMO, the subject has been clouded back and forth and is not addressing what, IMO, is the key difference when someone tells us Germany kicks our ass at something, or Japan outdoes us. They both have a system of strong public sector backing, from the ground up. And by that I mean, the education of their citizens. The government actually has policies that largely work for their environments.
We can sit here and endlessly debate the rise of the machine, or the low value add of the slave labor in China, but those aren’t the issue.
ETA, they are circling the issue, but IMO not the issue.
AA+ Bonds
I will reiterate the idea that you cannot actually replace automation with workers when building modern-day electronics if you want electronics that will work out of the box. This applies to a lot of industries but that part seems pertinent here.
It is also non-trivial to imports/exports that the dollar is the world’s reserve currency and the Chinese have pegged the yuan. Overall economic well-being of us vs. wealthy exporting nations, that’s a larger question.
Corner Stone
@cat: I’m coming off a two day whopper of a headache. I’ll do better, I promise! Please don’t outsource my snark to that low bidder! I need this gig, I gotsa family!
AA+ Bonds
@Tissue Thin Pseudonym (JMN):
This sounds like a lot of whining to me. Either someone will suck it up and do it anyway, in this round of fraud or the next, or national stability will be threatened and along with it this country. Your pick.
In my experience, it’s very hard for private-sector lawyers to even conceive of real, genuine crises in the baroque social structures that keep them on the middle floor while Wall Streeters wine and dine up top where the normal people elevators don’t go.
But they happen, quite often, and everyone suffers when they aren’t prevented. That will take using the tools we have in an unusual fashion, because no new tools are forthcoming.
chopper
@cat:
that’s because ‘the economy’ doesn’t give a shit if actual people are pushed aside by robots and shit. all ‘the economy’ cares about is that shit is made cheap and if robots can do it cheaper than chinese dudes can do it cheaper than americans, then american workers get boned.
intel has fabs in america because there’s not a huge savings having a handful of good jobs running a big fab here versus somewhere else because it’s only a handful. apple has their shit overseas because there’s a huge savings having a shit ton of crappy jobs assembling shit over there versus here because it’s a shit ton of jobs.
it doesn’t matter what country robots do their work in, at least in terms of human beings whose jobs have been replaced by them.
tBone
@cat:
I never said he was right. FWIW I keep falling way behind the thread, and the dig at you wasn’t fair based on what you’ve posted since. Not to say I agree with you either :) but I’m enjoying the discussion.
Mnemosyne
@Shawn in ShowMe:
I’m not sure how your point about German manufacturing disproves anything Martin is saying. The quote you pulled specifically says that the small manufacturers make niche products, not mass-market products like the iPhone.
cat
@Martin:
I stopped reading here. 20 barristas create less domestic jobs then 9 intel employees because those 20 barristas have almost no disposable income.
The US trade deficit is roughly 10% of GDP Any economic activity that happens in the US is going to generate almost exclusively US jobs.
AA+ Bonds
@chopper:
One caveat: it does matter if it’s happening in a country where all the robot exhaust and robot runoff from robot use can be forced on the population at large at gunpoint, vs. a country where people can petition their legislators over it and expect a result other than a cell with the windows blacked out.
cat
@AA+ Bonds:
That and they convinced their largest trading partners, the EU, to change their currencies to the
DMEuro allowing them to keep their inflation down and and keeping the rest of the EU from deflating their currency in response to Germanies trade surplus.Though for a while there they had the Criminal reserve currency until the EU stopped printing 500 Euro notes.
Ruckus
@AA+ Bonds:
Don’t really have answers, if I did I’d have a line a mile long outside my store.
This is a very complex issue that we have been getting to for the last 60-100 years. We had cars before Henry stated putting them together but we didn’t have mass produced cars that a lot of people could afford. But that was OK because for the most part we didn’t have roads to drive them on nor many who could fix them. (My father traveled from Kansas to CA as a child in about 1921/22. In a covered wagon. And my grandfather was a Packard factory mechanic.) Ninety years ago the world was a service/agrarian system. Look around and see the massive changes. Hell, if you are over 50 think about things when you were a child and what they are/how they work today. So many systems have changed or been invented in the last 90 years with little regard to the downfalls that the question is not as much how to change things but how and what to change to get a better outcome, one that benefits the inventors and investors without damaging the surroundings.
The concept that bringing (back) the low wage level jobs to the states will fix our ills is way too simplistic. We are not a low level wage country. Many of us have to live that way but that is not what this country is. Actually it would be better to say that’s not what most people think this country is. That is why the OWS protests are taking hold. People don’t mind wealth, they like wealth. And most people, even if they think that being wealthy would be grand, understand they probably won’t ever be wealthy. What they want is not to be poor. Because being poor sucks. It sucks donkey dicks. They want the opportunity not to be poor, to not spend their lives getting kicked in the nuts financially. Sure they’d like to be rich, but they will willing settle for not being poor.
cat
@tBone:
Its the internet, alls fair. :)
Ruckus
@Corner Stone:
I believe you are correct in your causation of the problem and many do understand that the problem is complex but just read the posts here. Many do not see the issues even in one industry.
These issues are far reaching and very complex, in that they are interrelated and have taken far longer to screw up than the last ten years. Can we unscrew them? Not without an idea of the complexity nor causation. Not without an idea how to turn around at least a few of the causes. Not without time to make/see if those changes work. Not with the conservative mindset of many in the world that going back to some mythical land of 150 years ago will solve everything.
Tissue Thin Pseudonym (JMN)
@AA+ Bonds:
If those are the only two options (and I disagree that they are), then kiss national stability goodbye. There are certain rules when it comes to prosecuting people. You may have heard of some of them: prove beyond a reasonable doubt; protection against self-incrimination; jury selection processes; no hearsay evidence; and so on. The problem with prosecuting most financial cases is that it is impossible to empanel a jury that will understand the nature of the crime, let alone the proof of it, given the above rules. Most people do not have the necessary underlying knowledge to put it all together, and defense attorneys know how to make sure that the people who can rarely make it onto the panel.
As I noted above, the Obama DOJ did *exactly* what all of you wanted them to and prosecuted a couple of Bear Stearns execs for fraudulent practices. The jury told them to get lost. They prosecuted Henry Samueli for backdating options. The jury acquitted that time, too. These were the *easy* cases where they had slam dunk evidence in the form of emails in which the participants discussed the particulars of the crime. You people apparently think that it would be easy to get convictions of all the banksters if prosecutors really wanted to, but it isn’t.
What you are asking is for the DOJ to bring a bunch of cases that they don’t think they can win. That’s just dumb.
AA+ Bonds
Here’s an uncomfortable idea: the job of left-wing lawyers is to figure out how to investigate and prosecute the fraudsters under current law, not to complain that it’s gonna be really, really hard to investigate and prosecute the fraudsters under current law. (And I’m talking ALL of you, not just the DAs, for the same reasons that we can’t depend on the NYT to keep us out of purposeless war.)
That second part, the complaining, is a conversation for y’all to have with each other over Chinese in between actually getting the job done.
cat
@Mnemosyne:
Are you really trying to split hairs and say a company that sells twist ties for Champagne bottles isn’t mass-market when more people have used their product then iPhones?
Martin
@Linnaeus:
Not years – centuries. We went from 75% labor in agriculture to 15% just over the span of the 19th century. We’ve been cranking up the productivity engine for a long-ass time. We dump people out of industries constantly. This isn’t new. And relatively speaking, this last round is pretty mild. It feels harsh not because it’s unusual but because manufacturing was a massive outlier due to WWII. We cranked it up to 11 and because half the planet got bombed back to the 16th century, kept it there for another 20 years. But domestic demand was never there at the level that we employed people (particularly since we ourselves didn’t need to rebuild), and we really did a disservice to society to suggest that it was anything other than a temporary benefit to the nation.
But everyone benefits from the technological innovation – they just don’t recognize it. Fuck, half the reason why mortality rates for the young have dropped so much is because we’ve made autos fantastically safer than they were a few decades ago. Everyone benefits, but they’re not necessarily direct labor benefits.
As to your 3 points, I agree that’s the response, but I don’t agree with, well, the first two.
1) It’s all of our problem because we’re not a subsistance economy any longer. Nobody is on their own. 90% of this country would starve to death within a month if the 5% that grow food went galt. The federal government should have a mandate to support job transition, but well, that’s kenyan marxism or some bullshit.
2) Wal*Mart is illustrative of the size of that labor market, but not of it done right. In fact, it’s probably illustrative of it done most wrong, but we only have ourselves to blame for that for being cheap motherfuckers who would rather have a gallon of pickles for $2.97 than have a decent economy. And yeah, that goes for everyone who has discounted why people buy Apple products when you can build your own PC from spare parts and bits of twine for $100. You’re discounting every measure of value in favor of saving a buck, and if you put nothing into your economy, you get nothing out of it.
3) Yeah, people should learn to become a computer programmer. Or a chemical engineer, or learn how to operate a CNC machine or whatever – and we need to be nimble and flexible. We have a choice – either we own the top of the manufacturing food chain by being an engineering powerhouse, generating ideas, solving problems and force 1.5 billion people in China to make our shit, or we can make our shit, wait for China to become the engineering powerhouse, generating ideas, solving problems, and be left doing nothing more than making shit for them because we got lazy. And don’t think it’s not already happening – half of our engineering PhDs are going to Chinese citizens because math is just too fucking hard and mom and dad will pay my way through that French Romantic Literature degree.
cat
@AA+ Bonds:
here is another one:
Would the ‘left’ be ok with Wall Street crashing everyone elses economy if we still had 5% unemployment and the middle class wages had risen with the GDP for the last 30 years?
different-church-lady
AA+ Bonds:
Roger that.
I think the pattern is that if the threads live past about #200 some worthwhile things start to happen, but then they either end there or go past about 325, at which point it becomes hopelessly stupid.
@cat:
I like this new Corner Stone. Maybe he’ll/she’ll stick around.
different-church-lady
Having re-read the original post, I’d say in response to this…
…I’m not jealous. I don’t care if the 1% makes eleventy billion dollars or eleventy hundred billion dollars. I just want them to not fuck over the economy so damn badly that I can’t continue to make even my modest little living.
Is that too much to ask? Oh, wait, it’s too damn late already…
cat
@Martin:
I can’t quit you…
PhDs in Engineering disciplines are a hindrence to employment in the US so American students are disincentived to continue their education.
Ruckus
@Martin:
I started working in the mfg industry in 1961. (My fathers biz, I was very young. Very young, not like now.) There was no automation, other than power feeds on some of the machines. In the late 60’s we added machines which used hydraulics for automation. Worked better, did the repetitive work faster. In the early 70’s we added computer controlled machines. The early ones were simple and required someone to hand write every line of code. By the early 90’s the machines could do the work of several skilled workers and do it much better. They also ran mostly unattended 20-24 hours a day. They also did things that no skilled worker could do manually. Now many of those machines are faster and better and even cheaper. The computer programs to support them are unfathomably better and cheaper. The number of skilled workers to run them? Fewer and wait for it… cheaper.
This is real info from someone who has seen/experienced the changes first hand, from manual to automated. Forty to fifty years ago we screamed for more, better trained craft people. Those screams went unanswered. So industry invented machines to take the place of the unavailable, trained craft worker.
chopper
@cat:
a phd in engineering is a hindrance to employment? are you an engineer?
Martin
@cat:
No, I wrote that moving low skill assembly jobs back onshore wasn’t a solution because the trend is to eliminate them entirely, even in China. Investing big in the typewriter industry may have created a lot of jobs in 1980 but they were gone by 1990, and everyone should have been able to see that coming. Why bother? I merely suggested picking a better target.
Since there aren’t 14M tech assembly jobs to move, then no, that’s not as good as 14M service industry jobs. And since 14M high-skill jobs would cost the US GDP to create given your example, no, that’s not going to happen either not because we can’t afford it, but because we won’t fucking educate ourself enough to even do those jobs, or have you not noticed that the tech unemployment rate is pretty damn near 0% in this country. What sectors have taken the biggest hits? Manufacturing and service – those are the jobs that were lost. Low-end manufacturing we’ll never get back because we’re replacing them with a smaller number of high-end manufacturing which our legions of drama and anthropology majors are ill equipped to fill, but we could replace those service jobs which people previously were in and could be again.
No its not, because the areas of the assembly segment which are labor cost sensitive (which happens to generally not be finished goods) would effectively collapse under the increased cost. That would be such a dramatic shift in component costs that there’d be immediate investments in automation, and then the jobs would vanish right out from under you. And we’d still get locked up in a decades long Congressional battle over whose district should get all of these new jobs. And we both know that. It’s impossible to solve politically, and if there was an obvious free-market B-school flowcharted solution, we’d already have it.
I’m convinced that we’ll get there, but it’ll look like what Intel did, which was to automate all of those jobs out of existence and keep the good ones nearby. Good for the economy, but won’t get you there on jobs.
Linnaeus
@Martin:
Fair enough, but when your job is on the line, the diffuse/indirect benefits of technological innovation don’t necessarily make up for what you lose when your job is gone and there’s no realistic prospect of another one that provides for a comparable lifestyle.
But that seems to me to be the very justification, from the consumer’s standpoint, for continuing to offshore manufacturing jobs – you can then get a product for cheaper than you would otherwise. I suspect most consumers would ask what the point would be in offshoring if the price just gets jacked back up again for the purposes of a buying experience they don’t really care about (or in some cases, is actually quite bad).
Sure, people should have that opportunity to do so; it’s just that not everyone is going to do so for various reasons (interest, ability, cost of education) and we need to take that into account.
And speaking as a humanist (a historian), I will gently take issue with your “French Romantic Literature degree” barb. There’s more value in such things than is apparent at first glance. But that’s probably a conversation for another time.
Martin
@AA+ Bonds:
I agree that they’re overworked but that’s more a function of Apple unable to expand retail fast enough. I don’t know about where you live but you can barely walk through an Apple Store here on a Saturday without tripping over people (and I have 4 of them within 5 minutes of me). They’re mobbed. There’s only so many humans you can fit per square foot, and from my experience Apple’s pretty much there in most of their stores. They really can’t add staff. They simply need more stores – lots more stores. And lots more staff for those new stores.
But they get paid better than many other retail establishments, at least where I am and where I’ve researched. No, it’s not huge, but it’s on par with a lot of the low-end white collar/service jobs available here.
cat
@chopper: Thats the conventional wisdom.
I’ve worked in several engineering firms, as a programmer, and heard negative feedback about PhD unless their research was almost exactly tailored to our needs.
There are several EE/ME at my current company and the only PhD Engineer we have is working on DSP project being DSP are his speciality.
This is a company with dozens of PhD’s at all levels of the organization. I dont think its a coincidence.
Martin
@cat:
Holy WTF. You realize that the unemployment rate for new Engineering PhDs is right about 0% – research universities continue to struggle to find qualified people for teaching positions. You also realize that one of the primary reasons for tech businesses to set up near research universities is to get their hooks into those PhDs before anyone else can.
The reason that American students don’t continue their education is that even in this economy a new engineering BS earner can expect an average starting salary of $60K and half of them are getting signing bonuses. And half of the MS engineering degrees granted in the US are employer paid. That’s a hell of an incentive to bail out after 4 years.
cat
@Martin:
Absolutely wrong. Foxconn employes almost 1M people. There are plenty of jobs that could move back to the US and that can easily be protected by tariffs that won’t kill the market for gadgets.
Jamie
Hell, Babe Ruth used a 45 oz bat. Cheating is an american tradition
Martin
@Linnaeus:
*Unless* you can add value to it by not offshoring it. That’s key. Let’s take an industry that cat hinted at before with her champaign tie company (which is a good example).
The wine industry could consolidate and homogenize like so many other industries turning out cheap boxes of bland fortified wine. But they don’t. Partially due to the wine industry and partially due to consumer behaviors (with some government regulation added in), the industry has remained highly differentiated and value-added. It’s an industry where consumers see value and are willing to pay for that value, even if not everyone is in agreement on the value. Are workers adding any value there? Maybe, maybe not. I don’t know if grape pickers at high-end vineyards are better than grape-pickers at low-end ones, or whether the guy who controls the whole process is better at one place or another, but regardless, the recognition of value persists.
We also see that in the auto market. There’s pretty huge value differentiation across the marketplace. Mercedes isn’t adding $20,000 more leather or metal or anything else to their cars to justify the markup over my Honda, but consumers recognize $20,000 more value. Some of that value is in materials. Some is in engineering (horsepower, etc.). Some is in design (there are some fucking ugly cars out there). Some is in manufacturing (there are some quite poorly made cars out there).
The question comes down to whether trading out the manufacturing leads to an observable measure of value. In the case of high-end watches, it might simply because people attach value to a watch simply being Swiss made, even if a Chinese made watch would otherwise be identical. In the case of autos it might be if Germans can manufacture a more reliable, higher quality vehicle than Americans can. But if you can’t outwardly tell if the shift in manufacturing has had an appreciable effect on value, then that labor is completely fungible. Its a pure commodity, and commodities always and instantly reach market equilibrium – either you’re going to have to pay US workers what you pay Chinese workers, or you’re going to replace US workers with Chinese workers, all else being equal (there are no costs associated with tariffs, transportation, etc.)
You can tariff those goods, to throw off the equilibrium, but you’re still going to be competing in a marketplace where that activity continues to be commoditized. As a result you’re going to go in either of two directions:
1) You’re going to automate it since humans add no more value than robots do, and you’re going to completely undermine the labor market everywhere, tariffs or no.
2) You’re going to raise the bar on the product to add value to it, and you can do that at the manufacturing level. Is a handmade product of greater value than a mass-made one? Or a precision-made product vs a low-end manufacturing one? The Nissan GT-R is supposedly made such that each component is custom made for each car. That adds value to the product in the marketplace and turns the manufacturing from fungible to non-fungible. Apple’s CNC-driven aluminum unibody design adds value to their products over injection molded competitors, and while the assembly is ultimately the same, Apple added billions of dollars in high-precision CNC equipment (which supported higher-wage jobs designing and building that equipment) as compared to the relatively cheap, low-tech injection molding equipment they replaced. They replaced a fungible (in the current market) manufacturing step with a distinctive, and value-added one.
One unfortunate and very serious problem in the US is that too many workers are viewed as valueless. Retail should be seen as value-add, and they aren’t, which is just wrong. Support is the same way. Some manufacturing is the same way (other manufacturing are as I’ve indicated above, are indeed valueless). And too many companies take the easier path to profitability through short-term cost-cutting rather than adding value. That ‘price is what matters most’ mentality has transferred from management, through marketing, to consumers. And now it’s a catch-22. Consumers are so fixated on pinching pennies that it’s now much harder for companies to add value and ask for higher prices. And until you have a marketplace that is willing to pay more, you can’t even consider making these kinds of changes in production and delivery because the revenues will never arrive to pay for them.
I’m 100% in favor of more US jobs, but consumers need to be willing to pay for more US jobs. By and large they aren’t and WalMart sits there as proof that they aren’t. Until that equation changes, nothing is going to change on jobs.
Ruckus
@Martin:
Martin has stated the problem very, very well here. As long as the mass of consumers are unwilling or unable to increase the price they pay for goods, be it electronics, food, whatever and the manufactures/wholesalers/retailers only have short term outcome interests which control their capital/profit actions we will have the system we have. Costs will sink to the lowest possible point. And that means lower wages here or offshore mfg, for now. The world is changing though, look at our wages, stagnate for what, a decade now but climbing in many of the outsourcing areas. What will our country look like if wage equilibrium is reached?
Ruckus
@Linnaeus:
And speaking as a humanist (a historian), I will gently take issue with your “French Romantic Literature degree” barb. There’s more value in such things than is apparent at first glance. But that’s probably a conversation for another time.
This is precisely Martins point. It’s not that that such a degree has no value, it’s that not many people are willing to pay for it’s use. In the end it’s value is what people are willing to pay, not charge. Such as it always is. Value may be real but someone has to perceive that value before they will pay for it.
Linnaeus
@Martin:
I agree with you; philosophically, I don’t think any worker is valueless, but I understand the difference between that and the definition of “value” that you use here. And this is precisely the rub that I was trying to get at – albeit maybe a bit clumsily – in my comment upthread. The economic forces that are pushing jobs offshore go hand in hand with the the “price is what matters most mentality” – they’re mutually reinforcing. Add in worsening income inequality to that feedback loop, and I really have a hard time seeing how we can effect a powerful enough cultural change (which is really what you’re advocating for) that will be able to counteract these entrenched economic mechanisms. I think retail is a particularly tough challenge in that regard. For example, people immediately grasp the benefit of convenience and (sometimes) lower prices that accompany internet shopping, but the benefits of an in-store experience are often less clear or are nonexistent, e.g., being pressed or bamboozled into buying things you don’t want or need.
In the end, I’m all for valuing workers more and paying them more. I just think the deck is stacked against that outcome and it will take Herculean efforts to change that. Doesn’t mean we shouldn’t try, of course, but we have to be prepared for the possibility that the US will be a poorer society overall.
Linnaeus
@Ruckus:
Which is a fair observation. The point I’m getting at, though, is that such a degree can prepare you for a broader range of work than simply the field in which you obtain the degree. Perceptive employers will see that and will pay for it.
Ruckus
@Linnaeus:
Someone with a degree in French Romance Lit is going to have any idea on how to design chips? I have 2 cousins and one cousin in law who do chip design and all of them had to have some pretty good science/engineering/math degrees to get work.
In today’s labor market someone will pay for a degree in French Romance Lit? Doing what kind of work? Journalist? Technical writer? Blog host? This is the kind of thinking that sent thousands of people to college who end up with little or no marketable skills. And lots of student loans. At least right now there are just too many people for too few jobs, with non tenable skill sets. And lots of student loans.
Martin
@Linnaeus:
You should take issue with the barb – it was designed to inflame. Sometimes something needs to be overstated to be heard (as with my birth control analogy above).
I have no issue with the rich spectrum of academic fields offered to students. My issue are entirely on implementation:
1) There’s a market for the humanities at all degree levels, but we’ve convinced students that the market is larger than it actually is. Yeah, a BA degree is pretty much a requirement for a $12/hr bank teller gig these days, but that job will never pay off your degree – particularly if you went to a private. We’re encouraging quite a lot of our young people to enter a life of near indentured servitude (or a life down the hall from mom and dad) to their student loans. That doesn’t improve at the graduate level where we just heap insult to injury. Domestic engineering students don’t pay for their advanced degrees and they benefit most by having one. There’s something perversely wrong with how we market higher education to young people where we charge the most money to the people that will typically earn the least and the least money to those that will typically earn the most.
2) The situation above develops because we have shitty bandwidth allocation at universities. If engineers and scientists are outperforming the humanities and social sciences to that degree, then fucking stop admitting so many of the latter and admit vastly more of the former. We don’t do that because educating scientists and engineers is fucking expensive, and humanities and social sciences really damn cheap, and because one of the best places for all of those humanities PhDs is at universities while one of the best places for all of those scientists and engineers is NOT at universities so we get this inverted supply/demand thing going. If public universities are supposed to serve the interests of the state, then they really should be turning out the kinds of workers that the state needs and that best serve the interests of citizens. They’re totally failing at that. If the privates want to go for a different mix, that’s cool, but the publics shouldn’t be doing that, and if we got that balance better, maybe we wouldn’t need to import engineers and turn most of our English BAs into baristas.
3) We need to find a way to give students better ability to mix/match skills and interests. We should have greater appreciation for and study of the humanities, but that shouldn’t come at the expensive of developing skills the market needs to employ you. Our general model of education for providing breadth/depth is pretty broken.
4) We have a serious bias against trade skills, which is really problematic. We’ve kind of broken this problem down into ‘smart kids to to college, dumb kids go to trade school’. And this is core to my issue with people that think we should solve the labor problem through manufacturing. How many parents genuinely encourage their kids to bypass college and pursue a trade? Some do, but it’s not exactly a national point of pride or anything. We’ve basically told our youth that the only worthwhile path is a white-collar one. Oh, but wait, let’s create a whole bunch of manufacturing jobs! (But don’t go and get trained for those jobs or anything, and heaven forbid we actually expend taxpayer dollars to build public trade schools.) If we think blue-collar jobs are jobs worth having, then let’s fucking step up and say they’re worth having, worth training for, and worth paying for. As it is we really just want to slip them in under the rug, but not really encourage people toward, well, unless its their last resort.
Linnaeus
@Ruckus:
I didn’t say that; of course some fields are going to require specific education and/or training. But there’s other jobs besides chip design.
Thing is, not everyone has the inclination or the particular talent to be a chip designer. But that doesn’t mean such people are useless, don’t have other useful talents or should be consigned to lifetime deprivation. They will need to be somewhat flexible and yes, may even need supplemental training based on what they’re trying to do. But things like communication in writing, research, etc. are still useful skills that you can put into service in a variety of jobs.
Don’t get me wrong, I’m not saying it’s easy nor am I saying that some fields aren’t in more demand than others. I just think that a variety of educational backgrounds are healthy for a society to have.
But if I’m wrong, then let’s not mess around. Let’s eliminate “useless” departments at universities entirely. Just get rid of them, and then we won’t have a problem of people with no skills. Where shall we start?
Linnaeus
@Martin:
Lots of stuff to chew on here. I’ll go though your list:
Part of the problem with student loan indentured servitude is job-market based, but I think it’s also due to the fact that we’ve shifted the burdens of higher education increasingly onto students and their families. States have by and large decided that higher education should not be treated as a public good and have cut funding to their public universities. Which in turn leads to universities doing what mine has done – raising tuition considerably year to year – and pushes students into borrowing to cover the cost of it.
That’s a challenge, and I’m not sure that’s going to get solved at the big public universities anytime soon. One of the ways that my university has tried to deal with declining public support (besides raising tuition) is through growth; the number of students it has admitted has gone steadily upward. They’ve tried to squeeze faculty and graduate students, but at some point, you still have to have someone educate these students, and humanities & social science still do the bulk of undergraduate education at my institution.
You could decrease the number of faculty and graduate students in humanities and social science fields, and in so doing decrease the courses in those fields you’re teaching. In fact, you’d probably have to because at the undergraduate level, you’re dealing with students who don’t necessarily have a specific career planned out and the only way to really ensure that they’ll go into a STEM field (assuming they stay in school) is to restrict access to other fields. That, in turn, will mean you’d have to hire/admit a lot more faculty and graduate students in STEM fields and increase their teaching loads. The latter is going to be a more difficult proposition because it will take time away from the research that faculty and students would likely rather be doing (many of my acquaintances in STEM fields have light teaching requirements and some have none at all).
Which poses an interesting question: what is the purpose of a public university? Is it mainly for job/career preparation or to produce broadly educated citizens? The two aren’t mutually exclusive, but there is a tension there. As I suggested in my comment above, if the real problem is that we’re not producing the right kind of workers, then let’s dispense with the rhetoric about the value of a college education, crunch the numbers and at the end of the process offer only those fields that are deemed job-worthy.
I could go along with this; there’s been more of an interest in “interdisciplinary” education, but it still remains to be seen how effective that will, especially since we’re not yet sure how to do it. Something like this was, by the way, what I had in mind when I began graduate school in history of science. My scientific career after undergrad was nasty, brutish and short, As a result, I decided to do something else, but I wanted to blend it with what I already studied and liked as an undergraduate. Didn’t quite work out as I’d planned, but that’s life. If we can find other ways to achieve the effect I intended, I’d be for it.
I agree. We need to elevate training and education in the trades to something more than just a last-resort option. There are jobs in my area that are going unfilled because retiring tradespeople are not being replaced in certain sectors.
Paul in KY
@Martin: Martin, IMO, some people are just cut out for factory jobs or what we would call ‘menial labor’. That’s the kind of job they want.
Paul in KY
@cat: I would be more OK than I am now, I have to admit.
Paul in KY
@Linnaeus: Here in KY, the purpose of the public university seems to be to have the best basketball team possible & to thus beat Louisville & Indiana & Florida every year.
Ruckus
@Linnaeus:
And as Martin once again so eloquently stated (far better than me!) it’s not that the lit degree is bad or that we shouldn’t study humanities (I think they should be studied more in fact because they enrich our lives) it’s that it does not prepare most people for an actual living, unless they are going to teach lit to others. As Martin stated these are not the majority of job skills needed in the world. And as Paul at 302 pointed out not everyone really needs to go to college. But our culture says college or loser. Even 40-50 years ago high schools were doing college prep or nothing. So we have this stigma in our culture, damned if you go to college-loans that take years to pay off or which may never be, damned if you don’t-loser!-and most likely a lifetime of menial jobs. Unless your parents are rich and pay for your school. That will surly keep the lower classes in their place.
Indentured servitude is the goal. If you can’t leave your job because of lack of health care, if you can’t get a good job because lack of college, people with the money and jobs own you. Otherwise you will have to work around the edges, living off of what little you can. Life has been this way for centuries but now it is institutionalized. It is no longer a local issue (eg:company town) it is nationwide, it has become a major part our culture.
Ruckus
@Paul in KY:
That’s the kind of job they want.
I doubt very seriously that anyone wants a menial job. They may not have the talent or experience or time to have a better, less menial job but very few are looking for a lifetime of meaningless, low paying, mind numbing jobs. We do them for lots of reasons, people will pay me money, that’s all there is, I need to eat, etc, etc.
That’s pretty condescending attitude if you really feel that way.
Linnaeus
@Ruckus:
Let me repeat, though, that I’m not saying that some skills aren’t (currently) in more demand than others. I’m saying that even the lit degree does give you some skills you can use, even if it’s not directed toward a specific job. My own training in graduate school has helped me get the (non-academic) jobs I currently hold. Is it an ideal situation? No. Do I think everyone should do what I did? Hell, no. But I wouldn’t say that what I offer is useless, either.
But if we decide as a society that certain skills are more worthy of emphasis in higher education, then it stands to reason that resources should be directed toward teaching and using those skills. That means that there will fewer resources directed toward other fields and hence less instruction in those fields. That is the price that we will pay.
I don’t think you and I (and Martin) are really that far apart on this issue. I fully recognize that some people in certain fields are doing better than others. I just want us to be more forthright about what we really want from higher and more forthright about the full costs of doing whatever we decide we want to do.
Ruckus
@Linnaeus:
I don’t think we are far apart either. But I think it is vitally important to understand the depth and width of the problems that we face as a culture. We have come pretty far down the road of, if not outright lawlessness, outright rigging of the laws by the very small, very rich minority to screw the vast majority. It may or may not have been intentional but that is irrelevant. It may have been a big plan or just coincidence for the most part and that doesn’t matter either. We are at a crossroads right now, not only as a nation but as a member of the world. The world has gotten smaller and much more interconnected. The ripple effect no longer stops at a nations borders. Big business is international. My small business is international. Labor is international. You most likely own clothing made in many countries. You eat foods from many countries unless you work at only eating local. Cars are international. Even if they are mostly assembled in the US, many of the parts come from other nations. Borders may be a physical thing but in reality they are a holdover, an idea without anywhere near as much merit as it once had.