Black Friday Crime Roundup

A handy glimpse at the national crime wave known as Black Friday 2013:

"On Black Friday, thousands of Walmart employees and union supporters staged protests to demand annual wages of at least $25,000 for the 825,000 workers who make less than that amount and supplement their incomes with an average of $1,000 annually in Medicaid and food stamps. “The protest is sad,” said a Southern California shopper, “because Walmart has good prices.” Police arrested a man dressed as Santa Claus outside an Ontario, California, Walmart; a shopper stabbed and pulled a gun on another shopper during a dispute over a parking space outside a Claypool Hill, Virginia, Walmart; police pepper-sprayed one shopper and ticketed another for spitting on a stranger’s child at a Garfield, New Jersey, Walmart; a police officer was hospitalized for injuries sustained while breaking up a fight outside a Rialto, California, Walmart; and a bomb threat led police to evacuate a White Plains, New York, Walmart. “Black Friday is the Super Bowl of retail,” said Walmart U.S. CEO Bill Simon. “We ran a play that only Walmart could deliver.” 

Does Gov. Haslam Want Dumb Workers or An Educated Society?

In recent days our esteemed Governor Bill Haslam has been holding meetings with folks from a wide range of business and university officials to talk about education with a particular goal in mind - that higher education must work harder to train people for jobs.

An article in today's KnoxNewsSentinel begins:

"Tennessee does not have enough qualified workers with specific skills, a high work ethic and critical thinking abilities, local business leaders told Gov. Bill Haslam on Tuesday.

College and university leaders, meanwhile, said they need more resources to adequately educate and graduate more students to fill those jobs.

"We're trying to have those conversations around the state to make certain we're providing positions that will train people for the jobs that are there today."

And while I certainly agree our state and community needs critical thinking skills, I read no mention of just what "specific skills" are being cited here, other than mentions of welding and engineering. And we certainly need to discuss and debate the role and the enormous impact which education has on our world at nearly every level.

The optimist in me wants to believe the driving forces for these Haslam-led meetings will lead to a better understanding of what the functions higher education should serve.

The pessimist, however, sees a day when higher education is either about technical services or football and other sports.

Reading the comments to the KNS story (often a grueling descent into nonsense) I noted the following one:

"We don't need any more fluff degrees.

No more philosophy, theatre, arts, sculpting, dead languages, mythology, psychology, library science, interpretive dance, music, music history, Greek literature, roman literature, American literature type degrees.
I could go on but why the state continues to fund universities that pump out not only worthless degrees but degrees that put their constituents into crushing debt with no real hope of finding a decent job in their field is beyond me.
If someone wants to get a degree in one of these areas its fine but why encourage it by offering scholarships to it?
China does it right. Scholarships and state funding only in areas that produce jobs in fields of study."

What kind of world will we have should we remove knowledge of history, science, the arts, language, libraries, music, literature, etc etc. Is emulating the nation of China our best option?

Is the sole purpose of attaining a college degree merely to obtain a high-paid job? Is there no value left in education if it does not lead to a giant paycheck?

Once we eliminate the areas of study the commenter suggests - critical thinking skills will likewise vanish. Absent ethics, philosophy, communication skills, understanding of history, the ability to express ourselves and our thoughts about our world, ignoring the past or ridiculing those who excel in all these areas - what kind of world would we have?

Humans are not meant to simply serve a machine of industry ... are they? 

Pennsylvania - America's First Corporate State?

The news for Americans isn't looking too good in a place where freedom and rights were first celebrated.

"Pennsylvania, where the Declaration of Independence and U.S. Constitution were signed and where the U.S. coal, oil and nuclear industries began, has adopted what may be the most anti-democratic, anti-environmental law in the country, giving gas companies the right to drill anywhere, overturn local zoning laws, seize private property and muzzle physicians from disclosing specific health impacts from drilling fluids on patients. 

“It’s absolutely crushing of local self-government,” said Ben Price, project director for the Community Environmental Legal Defense Fund, which has helped a handful of local communities—including the city of Pittsburgh—adopt community rights ordinances that elevate the rights of nature and people to block the drilling. “The state has surrendered over 2,000 municipalities to the industry. It’s a complete capitulation of the rights of the people and their right to self-government. They are handing it over to the industry to let them govern us. It is the corporate state. That is how we look at it.”

 

“Now I know what it feels like to live in Nigeria,” said recently retired Pittsburgh City Council President Doug Shields. “You’re basically a resource colony for multi-national corporations to take your natural resources, take them back to wherever they are at, add value to them, and then sell them back to you.”

This American Life has more on the story and the battle of Liberty being lost.

Foxconn vs American Workers: A Losing Game

Rallying for their lives

American media is beginning to notice that our low-cost demand for consumer goods and the deep desire for only huge profits by bosses is driving us over an economic cliff. This NYTimes report peeks a little behind the curtains ...

"An eight-hour drive from that glass factory is a complex, known informally as Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that China could deliver workers — and diligence — that outpaced their American counterparts. 

That’s because nothing like Foxconn City exists in the United States. 

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said. 

Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes. 

Foxconn Technology has dozens of facilities in Asia and Eastern Europe, and in Mexico and Brazil, and it assembles an estimated 40 percent of the world’s consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony. 

“They could hire 3,000 people overnight,” said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but declined to discuss specifics of her work. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”

The economic engines in China and in Asia are fueled in ways American workers can't or won't work under. It isn't a matter of whether American workers are skilled or not.

I mentioned recently the mass suicide attempt by employees at one Foxconn complex in a bid to keep the wages they had.

Reports on Foxconn's business model are just barely being provided. But the information is grim. And a global solution which might ignite a boom in the American economy is at best a murky concept. It's as if we are debating what kind of boat to take to sea after we have already leapt over the rails of a ship and are swimming away.

America's Economic Self-Destruction

I'm leaning more and more towards at least understanding why massive protests nationwide are being maintained, that indeed 99% of America is being made fools of and abused by the 1%. I see little effort or will by those in power in government or business to change the current stream of greed and madness.

The twisted gyrations in corporate business today defy descriptions and explanations - record profits and continued layoffs are going hand in hand, stalling economic growth in favor of short term benefits at a disgusting and disturbing pace. Yet explaining or understanding this maze of deception is masked by acronyms unknown or seldom defined and is all handled by nebulous executive decisions. It's as if quantum physics has become an economic theory which few can comprehend.

For example, recent studies of corporate activity reveals vast cash earnings are being used to repurchase stock even as the same companies endlessly shed workers -

"When Pfizer cut its research budget this year and laid off 1,100 employees, it was not because the company needed to save money.

"In fact, the drug maker had so much cash left over, it decided to buy back an additional $5 billion worth of stock on top of the $4 billion already earmarked for repurchases in 2011 and beyond.

"The moves, announced on the same day, might seem at odds with each other, but they represent an increasingly common pattern among American corporations, which are sitting on record amounts of cash but insist that growth opportunities are hard to find.

"The result is that at a time when the nation is looking for ways to battle unemployment, big companies are creating fewer jobs, and critics say they are neglecting to lay the foundation for future growth by expanding into new businesses or building new plants.

"But spending on capital investments like new plants and infrastructure has stagnated more broadly in corporate America, confounding efforts by the Obama administration to spur economic growth. Capital expenditures by companies on the Standard & Poor’s 500-stock index are expected to total $546 billion in 2011, down from $560 billion in 2008, according to data compiled by Thomson Reuters Eikon.

"Earlier this month, Pfizer increased its estimate for stock repurchases this year to between $7 billion and $9 billion — essentially spending in one year nearly all of the money it set aside in February for multiyear buybacks. There has been a steady drumbeat of other companies laying off workers even as they have disclosed plans to buy back more stock. On June 23, Campbell Soup said it would buy back $1 billion in stock; five days later it announced plans to eliminate 770 jobs. Hewlett-Packard announced a $10 billion stock repurchase in July, and jettisoned 500 jobs in September after it discontinued its TouchPad and smartphone product lines.

"Powered by huge stock buybacks — [Zimmer]  bought $500 million worth of its own shares last year, more than twice what it spent on research and development — Zimmer posted earnings growth of 10 percent a share, even though operating income and revenue grew by less than 5 percent in 2010."

It gets even worse when financial companies, such as Citigroup, engage in deceptions which the SEC decides to keep hush-hush - something one judge this week called out as grave disservice to the public:

"A federal judge in New York refused on Monday to endorse a $285 million consent agreement with the SEC that would have allowed Citigroup Global Markets, Inc., to avoid any admission of wrongdoing in a deceptive securities transaction that earned Citigroup$160 million in profits while investors lost $700 million."

"At issue in the case was a 2007 effort by Citigroup to create and market a billion-dollar fund of problematic mortgage-backed securities just as the nation’s housing bubble was about to burst. The arrangement allowed Citigroup to dump assets of questionable quality on misinformed investors.

"Citigroup told prospective investors that the fund’s assets had been hand-picked by an independent investment adviser, when, in fact, Citigroup used the fund to jettison $500 million in risky assets.

"In addition, unknown to the investors, Citigroup had also taken a short position on those same assets, counting on the securities losing their value. When they did, Citigroup realized net profits of $160 million in addition to $34 million in fees it charged to set up the investment. In contrast, the investors lost everything – more than $700 million.

"The judge added: “The court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance.”

The Business Of Running Government

There's an interesting post via MCB regarding Governor Bredesen's comments that Tennessee government and its budget must operate more like a business. The concept that government should operate like a business has been often touted by those in elected office (and sometimes by pundits in the public arena too).

But should government follow business models?

One comment on the post from Southern Beale says "Government should be run like *government* — of the people, by the people, for the people. Running government like a “business” has lead us to the problems we see in Washington right now."


On the one hand I agree with with SB - the two groups seem to be best operated separately, with different priorities.

But the reality is that business relies on government for success, and government relies on business for success as well. I can think of very few products made and sold by any business which is free from governmental policy or regulation.

The oft-mentioned episode in the American Colonies called "The Boston Tea Party", resulting in dumping crates of tea into the harbor, is surely an episode too of government insuring success for big business and failure for smaller businesses. As noted on this web-site:

"Many people today think the Tea Act—which led to the Boston Tea Party—was simply an increase in the taxes on tea paid by American colonists. Instead, the purpose of the Tea Act was to give the East India Company full and unlimited access to the American tea trade, and exempt the company from having to pay taxes to Britain on tea exported to the American colonies. It even gave the company a tax refund on millions of pounds of tea they were unable to sell and holding in inventory.

One purpose of the Tea Act was to increase the profitability of the East India Company to its stockholders (which included the King), and to help the company drive its colonial small business competitors out of business. Because the company no longer had to pay high taxes to England and held a monopoly on the tea it sold in the American colonies, it was able to lower its tea prices to undercut the prices of the local importers and the mom-and-pop tea merchants and tea houses in every town in America.

In an article for Harper's this month, writer Kevin Phillips shows that intentional governmental policy has altered the way government reports on business and the economy in general, with the result being that few Americans get an accurate picture of how weak or strong the economy truly is. How we have allowed massive changes to the definitions of unemployment rates, inflation, the consumer price index, etc, has had a very plain result: the average person has no idea what the economic status of the nation or individual might be.

All of the above to say that really, business has been running government for a very long time.

Corporate Freebies - A Southern Folly

"In 2006 the Korean car maker Kia decided to build a $1.2 billion plant in West Point, Georgia. To land the project, the state offered a $420 million incentive package that included free land (bought from the previous owners at about 2.5 times the market value), tax-funded employee training, and a new $30 million Interstate interchange. Altogether, the subsidies amounted to roughly $168,000 for each of the 2,500 jobs at the plant.

Gov. Sonny Perdue, a Republican, says it was the incentives that brought those Kia jobs to town. Harvey Newman, an economist at Georgia State University’s Andrew Young School of Public Policy, isn’t convinced. “It was clear they would pick a Southern state because of labor costs,” he notes. “Alabama had a trained force of autoworkers, so Kia located on the Georgia-Alabama border.” In other words, Georgia taxpayers are paying Kia hundreds of millions of dollars to hire Alabama workers."

That's just one comment from an eye-opening assessment in Reason Magazine that tax breaks and other types of corporate welfare seldom provide many promised results.

While it may make some sense to offer assistance to use tax money to accelerate development of roads, water or energy lines, and other similar projects, the unspoken freebies to woo wealthy companies usually include free land and years of no taxation. That's usually called "abatement", which is easier on the ears of taxpayers than the word's real meaning - free ride on taxes.

As the story notes, the real decisive factor for the majority of businesses has little to do with these massive payouts - they are concerned with other issues, like work force training, access to suppliers, and prevailing wages.

The South is leading the way for tax-funded subsidies, and companies are paying attention to the trend. It allows them to go to other states (perhaps the ones they prefer from the beginning) and see what kind of bidding war can ensue.

Newman has more on the topic, too -

"There’s almost never any evidence that [taxpayer-funded incentives] work” at producing benefits for the general public, says Newman, the Georgia State economist. “We know that incentives aren’t usually the deciding factor. So the jobs would be created in any event. And incentives are basically unfair, favoring some companies over others."

I've mentioned this topic before, Tax Increment Financing (TIF), noting the true cost to communities which tend to offer any and every tax deal imaginable. The real costs are soon dropped on residents in the form of higher taxation:

"But what is missing here is that the cost of developing private business has some public costs. Road and sewers and schools are public costs that come from growth.” Unless spending is cut —and if a TIF really does generate economic growth, spending is likely to rise, as the local population grows —the burden of paying for these services will be shifted to other taxpayers. Adding insult to injury, those taxpayers may include small businesses facing competition from well-connected chains that enjoy TIF-related tax breaks. In effect, a TIF subsidizes big businesses at the expense of less politically influential competitors and ordinary citizens."

What are the real costs of Southern 'hospitality'?