Monthly Archives: May 2015

Over-Saturated job Market Depresses Wages

by Bud Meyers, published May 17, 2015

If humanity had as much access to oil as they do to all the seawater in the oceans, oil itself would be next to worthless. Whereas an extremely rare commodity or a work of art could be considered priceless by some measure. If we have an abundance of something that can’t be used for any meaningful purpose, it’s devalued.

If the U.S. were still on the gold standard for our currency, gold might be worth $40,000 an ounce instead of $1,200. If corporations could have a patent and a monopoly on all the drinking water and the air we breath …. but I digress.

If 100 college graduates had a Ph.D. in computer science, but only one stock boy is needed to work the graveyard shift at Wal-Mart, the value of a college education in the labor market is devalued. When 48 million unemployed Americans are vying for 5 million job openings, the value of labor is also devalued — although, the last JOLTS report showed that for March 2015 there were 1.72 official unemployed per job opening. Really?

The unemployment rate is a measure of excess supply. When people aren’t needed, their labor is devalued, and wages are depressed. I’ve been saying this for years, and why when robots displace humans — when human labor becomes obsolete — we’ll need a basic income. But for now, besides just dealing with the lack of jobs, we also need to deal with the downward pressure on wages for those who do have jobs.

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Study Exposes Reshoring Myth

by Bud Meyers, published on May 11, 2015

First, you may want to acquaint yourself with this recent “feel-good” piece at Market Watch from May 1, 2015: “Record number of manufacturing jobs returning to America“. This is what Obama likes to quote while pushing for the TPP trade agreement.

But then we’ve just learned that this reshoring myth has been exposed…

University of Pennsylvania (May 05, 2015) New research by professors at Wharton and Stanford show that there is actually little reshoring on a net basis in the U.S., while supply chain movements are crisscrossing more than ever. Even within the same company, one department might be outsourcing while another is reshoring.

Key findings from the study, “Global Supply Chain Benchmark Study: An Analysis of Sourcing and Re-structuring Decisions

  • Talk about the return of manufacturing to the U.S. appears to be just that — talk. Our research revealed that the rate of production increase and decrease in the region is equal.
  • EU countries are losing ground. Europe is the only region with more companies divesting than investing, primarily driven by costs, but also by market reasons. Even automated and/or high-value production has moved out of Europe.
  • While China is still the most attractive region for sourcing production, it is also among the top countries for volume decrease.
  • Companies leaving China do so for total cost reasons. ASEAN countries emerge as low-cost destinations to serve Asian markets.
  • For European companies, North America represents a lower-cost and lower-risk alternative compared to production at home.
  • For non-American markets, companies are divesting in North America in favor of locations closer to demand.

Here are few short news blurbs (in chronological order) leading up to this study:

Continue reading Study Exposes Reshoring Myth

67,161 less U.S. factories since 1997

by Bud Meyers, published May 9, 2015

  • At the end of 1997 we had 406,567 manufacturing establishments of all sizes.
  • Just since the first quarter of 2001 the U.S. saw 59,431 factories closed.
  • In the 3rd quarter of 2014 we had 339,406 manufacturing establishments of all sizes. That’s 67,161 less than we had in 1997.
  • In April 1979 the U.S. had 19.4 million workers in manufacturing (This was the year union membership peaked.)
  • In April 2000 the U.S. had 17.3 million workers in manufacturing (This was the year Clinton gave PNTR to China. It should also be noted that in April 2000 was also when the labor force participation rate in the U.S. had hit its historical all-time high.)
  • In April 2015 the U.S. had 12.3 million workers in manufacturing. (Now Obama is pitching TPP for Nike.)

More info here: 

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The Plundering of a Nation by a Beloved Company

by Paul Buchheit, published May 18, 2015, mirrored from Common Dreams

(Photo: Kārlis Dambrāns/flickr/cc)

An emotional response to any criticism of the Apple Corporation might be anticipated from the users of the company’s powerful, practical, popular, and entertaining devices. Accolades to the company and a healthy profit are certainly well-deserved. But much-despised should be the theft from taxpayers and the exploitation of workers and customers, all cloaked within the image of an organization that seems to work magic on our behalf.

1. Apple Took Years of Public Research, Integrated the Results, and Packaged it as Their Own 

Apple’s stock market value of over $700 billion is about twice the value of any other company. It is generally regarded as innovative, trendy, and sensitive to the needs of phone and computer users all around the world. Many of us have become addicted to the beautifully designed iPhone. But the design goes back to the time before Apple existed.

Steve Jobs once admitted: “We have always been shameless about stealing great ideas.” And reaping most of the benefits. As economist William Lazonick put it, “The iPhone didn’t just magically appear out of the Apple campus in Cupertino. Whenever a company produces a technology product, it benefits from an accumulation of knowledge created by huge numbers of people outside the company, many of whom have worked in government-funded projects over the previous decades.”

In her revealing book, The Entrepreneurial StateMariana Mazzucato explains that “Apple concentrates its ingenuity not on developing new technologies and components, but on integrating them into an innovative architecture.” She goes on to describe 12 major technologies that have their roots in government research, including memory and hard disks, displays, cellular technology, GPS, and all the Internet protocols. Much of it came from the Department of Defense, the Department of Energy, NASA, the Air Force, and other U.S. agencies. The biggest expense in the iPhone is the touchscreen, which was developed at the CERN laboratories in Europe.

The “stealing of ideas” has not been accompanied by a reciprocal contribution to research. Apple spends much less than Microsoft and Google on R&D as a percentage of revenue.

It gets worse. Apple effectively takes all the credit for much of our public R&D by invoking the 1980 Bayh-Dole Act, which allowed publicly-funded work to be patented by companies. In 2011, for the first time, Apple spent more on patent purchases and lawsuits than on R&D. And worst of all, patents can make it extremely difficult for other researchers to continue work on the ideas behind newly developed products.

2. Even After Taking Our Research, Apple Does Everything in its Power to Avoid Taxes 

In 2013 Apple CEO Tim Cook proclaimed, “We pay all the taxes we owe – every single dollar.” Delusion teams with denial. When questioned about the “Double Irish” scheme that allowed Apple’s Irish subsidiary to pay ZERO taxes from 2009 to 2012, Apple executive Tony King said he had “no idea” what the questioner was talking about.

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New USPS service performance reports show significant delays in delivering the mail

by Save the Post Office, published May 13, 2015

mail processing

The Postal Service has released its service performance reports for the second quarter of the fiscal year, January 1 to March 31, 2015.  They show that it’s not just your imagination — the mail has been slowing down, and in some cases, by a lot.  The reports can be found on the USPS website here, and a more complete data set can be downloaded from the PRC website here.

This is the first period during which the new service standards were in effect.  These standards, which began on January 5, eliminated overnight delivery and added about a day to most delivery times.  The new reports show that even with slower standards the service performance has gone down compared to both the previous quarter and the same period last year.  The scores also fall well short of the Postal Service’s own targets.

The results shown in the reports will come as no surprise.  According to a Washington Post article on April 27 by Lisa Rein, “Preliminary internal data shows that the Postal Service did not meet even its lower targets for first-class mail during the first seven weeks of 2015, with letters that are supposed to take three days … arriving on time just 54 percent to 63 percent of the time.”

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7 Charts Show the Socialist Hellscape America Would Be Under Bernie Sanders

by Zeeshan Aleem, published May 12, 2015

Sen. Bernie Sanders would commit the U.S. to horror of an increasingly prosperous, equitable, and healthier future on a distinctly more livable planet. (Photo: AP)

Earlier this month on ABC’s This Week, host George Stephanopoulos asked Sen. Bernie Sanders (I-Vt.) whether he actually believed a self-described socialist could be elected president of the United States. Sanders suggested that if more Americans were acquainted with the quality of life in countries in Scandinavia, they wouldn’t be frightened by the label.

Knowing that Scandinavia is nothing short of hell on earth, Stephanopoulos zeroed in on the absurdity of Sanders’ point: “I can hear the Republican attack ad right now: ‘He wants America to look more like Scandinavia.'”

“What’s wrong with that?” Sanders replied.

Stephanopoulos was right to be skeptical that Sanders could get away with such a comparison. Scandinavian countries’ social democratic policies of exceptionally high tax rates and heavy government involvement in the provision of services has been nothing short of catastrophic.

America should do whatever it takes to ensure it doesn’t suffer the same fate. Take a look at the facts on what their policies would do to the U.S.

1. Access to quality health care would simply plummet
Having the government step into services like health care would create massive public health challenges. Just look at how many people in Sweden lack access to affordable health care:

Source: Mic/Gallup,

2. Health care costs would go through the roof

Continue reading 7 Charts Show the Socialist Hellscape America Would Be Under Bernie Sanders

Why the Rich Don’t Care About Jobs for the Rest of Us

by Paul Buchheit, published May 11, 2015, mirrored from Common Dreams

“There is hard evidence that cutting taxes on the rich fails to stimulate job creation, and that raising taxes on the rich has the opposite, beneficial effect.” (Photo: Justin Eason/cc/flickr)

Many of us wonder what possible reason could exist for the failure to invest in American infrastructure, to create millions of jobs as a result, and to help everyone in the long run. Analysis reveals personality traits and beliefs and misconceptions that might account for such behavior. Here’s a look inside the billion-dollar brain:

1. It’s All About Me

Several studies by Paul Piff and his colleagues have revealed that upper-class individuals tend to be narcissistic, with a clear sense of entitlement. Worse yet, they believe their talents and attributes – genius, even – have earned them a rightful position of status over everyone else.

Scarier yet, according to one study, the American sense of entitlement has been growing over the past 30 years, despite the fact that most of us have lost ground to the super-rich. And most disturbing is that ‘upper-class’ individuals tend to behave more unethically than average citizens.

This “all about me” attitude means that the wealthy don’t have to depend on others, and that they have less need to understand the feelings of others. This directly impacts our daily lives. The greater the concentration of wealth, the less a society invests in infrastructure. Our investment in infrastructure as a percent of GDP dropped by 60 percent from 1968 to 2011.

As the super-rich take their helicopters to and from work, they’re having multi-million-dollar bunkers built under their houses to sustain them when the middle-class revolution comes.

2. It’s All About Lazy People Who Refuse to Work

Congressmen and CEOs don’t normally see the people affected by their actions. This leads to a resentment of the poor, and imagined abuses in the minds of people like Paul Ryan and Scott Walker, both of whom likened the safety net to a “hammock,” and Texas Republican Louie Gohmert, who decried the purchase of crab legs by people on a $5-a-day food stamp budget.

John Boehner daydreamed: “This idea that has been born…that, you know, ‘I really don’t have to work…I think I’d rather just sit around.'”

Almost all healthy adult Americans, of course, want to work. But in 2011 Senate Republicans killed a proposed $447 billion jobs bill that would have added about two million jobs to the economy. Members of Congress filibustered Nancy Pelosi’s “Prevention of Outsourcing Act,” even as a million jobs were being outsourced, and they temporarily blocked the “Small Business Jobs Act.” In April, 2013 only one member of Congress bothered to show up for a hearing on unemployment. When asked what he would do to bring jobs to Kentucky, Mitch McConnell responded, “That is not my job. It is the primary responsibility of the state Commerce Cabinet.”

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The Five-Step Process to Privatize Everything

by Paul Buchheit, published May 04, 2015, mirrored from Common Dreams

‘The heart of privatization,’ writes Buchheit, ‘is a disdain for government and a distrust of society, and a mindless individualism that leaves little room for cooperation.’ (Image: stock/public domain)

Law enforcement, education, health care, water management, government itself — all have been or are being privatized. People with money get the best of each service.

At the heart of privatization is a disdain for government and a distrust of society, and a mindless individualism that leaves little room for cooperation. Adherents of privatization demand ‘freedom’ unless they need the government to intervene on their behalf.

These privatizers have a system:

1. Convince Yourself that “I Did It On My Own”

The people in position to take from society seek to rationalize their actions, and many have accomplished this through the philosophy of Ayn Rand, the author of The Virtue of Selfishness. She rejected community values, saying “Any group…is only a number of individuals…If any civilization is to survive, it is the morality of altruism that men have to reject.”

Post-Ayn-Rand, in the growing era of neoliberalism, with Ronald Reagan blurting “government is the problem” and Margaret Thatcher proclaiming “There is no such thing as society,” once-respected institutions like public education and public transportation were demonized as “socialist” and “Soviet-style.” The message has been repeated so often by the business-backed media that the general public began to believe it. Said The Economist with regard to product development, “Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs and tinkerers swap designs online, turn them into products at home and market them globally from a garage. As the revolution rages, governments should stick to the basics…Leave the rest to the revolutionaries.”

But as Mariana Mazzucato points out in The Entrepreneurial State, “In reality it is the State that has been engaged on a massive scale in entrepreneurial risk taking to spur innovation.” There is much evidence for this, in a multitude of disciplines, especially in technology and pharmaceuticals, both of which have seen corporate research labs diminishing if not entirely disappearing.

In the burgeoning new field of nanotechnology, says Mazzucato, industry cannot justify applications that require 10 to 20 years of development and which demand a coordination of physics, chemistry, biology, medicine, engineering, and computer science.

2. Insist that the Removal of Government Will Benefit All People 

The removal of government is equated to a vague demand for “freedom” which is hyperbolic if not meaningless. It gained momentum with Milton Friedman, who said: “Underlying most arguments against the free market is a lack of belief in freedom itself.” The Cato Institute went on to preach that “Free markets create a future promoting integrity and trust.” And Forbes Magazine founder Steve Forbes blustered: “You can’t create prosperity without freedom!”

Continue reading The Five-Step Process to Privatize Everything