Here’s what always happens when a big corporate shibboleth has really bad publicity.
About a week later a couple reporters from the ruling class will publish something contradictory. It was all a product of crappy reporting, they’ll indicate. And this will be used to stir the pot, get lots of eyeballs, and work toward guaranteeing that once again nothing can be done about the deeply immoral in corporate America.
Today it was the Huffpost, posting “the truth about ge’s taxes.”
The New York Times had it all wrong, said the reporters — Jeff Gerth (who used to be a top investigative reporter at the New York Times but who was now publishing this through the much lesser auspices of ProPublica) and Allen Sloan of Fortune.
Here are the best lines:
Why should you care about this? Because we all have a stake in how this plays out. Thanks to the uproar over GE, we now risk ending up with legislation that targets GE but produces all sorts of unintended consequences. Public rage can make for bad law.
Public rage can make for bad law. Savor the hypocrisy of it. Public rage is perfectly OK in the guise of the Tea Party and the November elections sweeping into power extremists who are now in full on war against the working class. But public rage against GE is bad. Public rage over layoffs (front page headline in today’s LA Times: Teacher hiring hard because of layoffs) and deprivation for everyone but corporate America, which deserves more bribing, is bad.
Read the entire thing — I’m not providing a link, it’s easy enough to find through Google — and you have the case of reporters who were also working the story and are now doing their best to grab their pieces of glory.
Except it won’t move the down marker. I’ve found that after a promising launch, ProPublica sucks. It’s a place where famous reporters who’ve been encouraged to move on or jumped a sinking ship go to die.
Anyway, even with Huffington Post’s eyeballs, the venue doesn’t have the muscle to change the argument.
Plus, it’s a bad pairing. You can’t be the front for the intellectual hoity-toity wealthy liberal and then expect some relatively brief piece defending General Electric to make people wince.
The rage over General Electric, from where I stand, can’t hurt.
Realistically, nothing much moves the corporate masters of universe of the US, anyway, not even tens of thousands of people, say, protesting in Madison, Wisconsin.
They know they can just shovel more money into political opposition work and lobbying and wait people out.
For example, Jeff Immelt isn’t going to leave Obama’s economy and jobs advisory board over any amount of shame heaped on him by current events. Forced to show up in the news, he tells people the equivalent of “Let them eat cake.”
And the President isn’t going to do anything unless it becomes so hot he’s forced to act. Jeff Immelt will need a solid boot in the pants and a firm “Good riddance!” to guarantee he’s put out the door. I won’t be surprised if our President never dumps him.
From ImmeltMustGo today:
It’s wrong for GE C.E.O. Jeffrey Immelt to get a 100 percent raise while asking middle-class workers to take major pay cuts — and all while leading President Obama’s Council on Jobs and Competitiveness.
Because we united on this issue, ABC and NBC did national television news reports on our push to boot Immelt. Mainstream news outlets like the Washington Post, The Nation, the Milwaukee Journal Sentinel, and Reuters syndication wrote stories. Insider Washington publications, like Politico, National Journal, Roll Call, and The Hill, reported on it, too.
Immelt himself was even forced to respond to us in an interview.
To get this much attention in corporate media over an issue of corporate influence in politics is a big moral victory by itself. But we’re not going for a moral victory. We’re going for an actual victory …
[The 200,000 who signed the ImmeltMustGo petition] got us a bunch of attention. But to get a victory, we’re going to need even more.
Surprisingly, over the weekend a much larger number of people than expected tuned into “GE and Jeff (Taxavoidination).”
Click the “watch on YouTube” button to see the view count.
The masters of corporate America shipped all non-military domestic manufacturing overseas. The only middle class making-stuff jobs remaining are those in artisan work for the plutocracy and the corporate socialism of arms manufacturing, still being underwritten by the people who’s jobs and livelihoods are being destroyed.
As for the rest of America’s work, the Internet has destroyed or grossly undervalued much of it.
However, readers will have noticed by now that the Internet’s work of crushing record companies, video production, newspapers, magazines and what not did not spark an alternative revolution in which the jobs and opportunity just transferred to others more intellectually lively.
What has actually happened is a great condensation. The wonderful magic of Google and social networking didn’t actually empower lots and lots of little guys. It just empowered the same old giants who dominate the top of search engines or who attract the most celebrity groupies on Twitter. Occasionally there has been room made for newcomers, just like the old-comers, except cheaper — like Huffington Post.
The winners, or the biggest, get the majority of the spoil ever more efficiently thanks to Google and the habits of human beings which predicate anything past results halfway down the first returned search page don’t count. Alternatively, whoever has the most followers or friends, just like back in high school, wins everything.
Tom Tomorrow made a comment on this last week on his shift of position to the DailyKos.
Too many papers have decided that they no longer have any use for this art form which grew in their stead, adapting itself entirely to their rhythms, and as that market contracts, there’s been no simultaneous expansion online. The niche that editorial cartoons filled in newspapers is almost entirely occupied by Daily Show clips online. Why do so few political sites feature political cartoons? Why did the Huffington Post, with verticals devoted to almost any topic you can imagine, never launch a comics section?
I’ve got a chance to help counter that trend, in some small way..
The biggest names, in this case he has to mean Jon Stewart, get all the spoil from a landscape that should have supported a lot more.
Jon Stewart was great two years ago. Now that you don’t even need a tv to see him several times a day — that it’s impossible to miss him for even a couple hours while randomly browsing — he’s sickening.
Boy it’s great that Jon Stewart’s omnipresence has shoved everyone else into the dumper, isn’t it? It’s just right and proper that one person in a country of 300 million should get absolutely all the spoil in his niche.
Anyway, back to the news story on all the businesses to leave — everything — because it’s all dying here:
Most of the industries share common reasons for their bleak prospects, including damage from advances in technology, industry stagnation and external competition, he says.
Because labor costs and regulations are high domestically, many manufacturers send their production to foreign countries. Downward price pressure from domestic wholesalers, retailers and consumers forces U.S. producers to cut costs to offer a competitive price. Many firms that cannot outsource have a difficult time competing …
Video post-production is another industry done in by the do-it-yourself opportunities presented by new technology. Once requiring specialized expertise, many of these tasks can be done on even an average home computer.
Companies such as Technicolor have suffered as a result. Industrywide, revenues have fallen 25% in the past decade to just north of $4 billion, with another 11% decrease predicted by 2016.
In terms of video post-production, here’s how technology worked. Exactly the same as it did for making music.
The software for doing it got into everyone’s hands. Every residence can make its own videos.
Like “Taxavoidination,” done here in Pasadena on the desktop.
In the old days, I would never have been available to afford video production for DD & the Highway Kings. That was for people with major record label contracts. But those contracts and businesses supported jobs.
Even if you cursed the structure and whims of the recording industry, it still furnished middle class work. Lots of upper class, too.
Now everyone, like me, can make a video and upload it to YouTube.
But “everyone” still can’t make any money from that.
A very smaller number of people, still associated with very big entertainment business, can. And people at YouTube, because they work for a company that provides the only pipe through which everything flows, can make money, not only from the eyes added from everyone who can’t make money on it, but also from the smaller number of very big players from the old industry. Those who’ve survived the great culling.
Case in point, YouTube pimping dogshit ‘promoted’ video at the tops of your vid’s ‘suggestions’ column. With “Taxavoidination” it’s been “What’s ‘Lemonade Mouth’?” by one of the old giants, Disney.
It’s enraging.
So there has been a drastic net loss in jobs and a concentration of riches in a smaller number of players, some of them only slightly different, thanks to the Internet and “technological” revolutions.
In perhaps another indication that the national intelligence apparatus is still busticated in the US, Steven Aftergood of Secrecy blog informs that a National Intelligence Estimate (NIE) has been ordered to address what the loss of the country’s manufacturing base means.
The U.S. intelligence community will prepare a National Intelligence Estimate on the implications of the continuing decline in U.S. manufacturing capacity, said Rep. Jan Schakowsky (D-IL) citing recent news reports.
“Last month Forbes reported that the continued erosion of the U.S. manufacturing base has gotten so serious that the Director of National Intelligence has begun preparation of a National Intelligence Estimate… to assess the security implications of the decline of American manufacturing,??? said Rep. Schakowsky, a member of the House Intelligence Committee.
“Our growing reliance on imports and lack of industrial infrastructure has become a national security concern …???
On one hand, it’s welcome news. Finally, a lightbulb has gone on over someone’s head. The question is invited in: How do we retain world leadership if the manufacturing shops for stuff we actually invented during the great WWII/Cold War surge are all tossed?
To the Chinese and etc.
On the other hand, it has been an obvious problem, one waiting to be addressed for so long, the suspicion arises that like so many other things, the concern is either purely cosmetic or evidence of the flailing of some removed boob from the ruling class nagged by the idea that when the servant idly comments that everything bought in town for the mansion is foreign-made, the process of ‘modernizing to the global economy’ has gone a bit too far.
Readers here know you could devote a book to the issues. And many probably are.
But it is not just that non-military domestic manufacturing has been thrown away. The thorny issue of what actually is protected manufacturing in this country must be addressed. And for the latter, the very obvious answer is arms manufacturing.
The argument, then, is not just a security and social issue. It is also a moral one which asks people to seriously consider two questions which are easy to pose:
Why has it been considered the proper way of things for corporate America to throw away domestic non-military manufacturing because the labor is ten times more expensive than sweat shop labor overseas?
And why, if such is the case, is corporate America allowed to preserve only arms-manufacturing jobs, the funding for which is totally shifted to the same middle class that has seen its jobs eliminated by the same businesses in non-military manufacturing?
Answering these with anything resembling continuing the status quo indicates an entrenched immorality, a corporate sociopathic quality concerned only with extending the bottom line at everyone else’s expense.
It means you have a country where quite a lot of decent people who believe we once stood for something might not want to live.
The result, so far, has been a cruel and profoundly unfair trick on workers.
If they’re in non-military production they’ve been deemed not cost effective, too expensive. So the nation has created a system were we have workers who have to engage in a kind of musical chairs game to vie for the smaller number of jobs in arms manufacturing because the same corporations can rely on taxpayer defense funding to answer all costs. They are necessary labor only insofar as they serve corporate America on especially enriching projects.
And if they cannot get those jobs, or do not have an arms manufacturing facility within commuting distance to apply at, they are thrown into the wind.
General Electric, in the news repeatedly, is a great example of a company that behaves in a way totally at odds with American security. And it is also, among many things, an arms manufacturer.
It pays no tax and under its last CEOs shipped non-military manufacturing overseas, abandoning many jobs. But it rallies its lobbyists to continue fighting for Department of Defense money for a redundant engine, canceled, for the Joint Strike Fighter.
It has two tiers of workers and manufacturing. Protected military manufacturing jobs, to be preserved because they’re necessary for rich contracts from the US government. And domestic non-military manufacturing jobs, which are be taken advantage of, continually pressed for wage and benefit concessions or eliminated altogether.
Neither of these conditions jive with the national interest. They’re features of a corporation that’s a sociopath.
“[We] need to work to rebuild the American manufacturing sector, creating jobs at home. And instead of approving FTAs (free trade agreements) that will offshore more American jobs, we need to establish a trade policy that benefits American workers and the entire American economy,??? she said.
[A Congressional Research Service (pdf)] cited a study which concluded that overall changes in aggregate U.S. employment attributable to the [recent] US-Korea [trade] agreement “would be negligible given the much larger size of the U.S. economy compared to the South Korean economy. However, while some sectors, such as livestock producers, would experience increases in employment, others such as textile, wearing apparel, and electronic equipment manufacturers would be expected to experience declines in employment.??? Accordingly, the “U.S. beef sector??? supports the agreement, while some labor unions oppose it.
The “growing reliance” on imports is indeed of concern, not just for the sake of national security. And it is not just a “growing reliance.”
The class that shops in malls, supermarkets and stores like Wal-Mart and Target for everyday material things necessary for American life know there’s no “growing reliance.” It’s a total reliance.
That this would be addressed as only a national security concern shows real myopia. That it would trigger a National Ingelligence Estimate may be an indication that it is now too little and too late.
Aftergood writes that the record for releasing NIE’s into the public so that they might effect change is not good. Nuances are lost and the legislative process is not “effectively served.”
It can only be hoped that this will not be the case.
See it now before it gets finked on and the corporate police come to drag it away. On YouTube, corporate America likes all the little future lickspittles who give big wet smooches to the television advertising. The other way round, not so much.
Some will have noted that last night, on MSNBC, General Electric changed its corporate advertising, rolling out a different commercial without the country line dance, one retooled to emphasize it makes stuff — like one big jet engine.
It’s everything that’s wrong with corporate power today: News broke last week that General Electric, America’s largest corporation, made $14,200,000,000 in profits last year and paid $0 in taxes — that’s right, zero dollars in taxes. At the same time, C.E.O. Jeffrey Immelt saw his compensation double. Now I hear that GE is expected to ask 15,000 of their unionized workers to make major concessions in wages and benefits.
But what really adds insult to injury is the prestigious and influential position Jeffrey Immelt holds as chair of President Obama’s Council on Jobs and Competitiveness. That’s wrong. Someone like Immelt, who has helped his company evade taxes on its huge profits — and is now looking to workers to take major pay cuts after his compensation was doubled — should not lead the administration’s effort to create jobs.
We cannot stand by and watch while we are led down this road. Mr. Immelt must step down from the president’s jobs panel — and if he won’t, President Obama needs to ask for his resignation.
Help us build public pressure on GE’s Jeffrey Immelt to step down or President Obama to get his resignation from the jobs council: Sign our petition at www.ImmeltMustGo.com today!
How can someone like Immelt be given the responsibility of heading a jobs creation task force when his company has been creating more jobs overseas while reducing its American workforce? And under Immelt’s direction, GE spends hundreds of millions of dollars hiring lawyers and lobbyists to evade taxes. All of this at a time when Fox News and the right wing are demonizing public workers, like teachers, as the cause of our economic problems.
The nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work??? (cue the dancing elephant, only tax avoidance lawyers also in the scene wouldn’t look so good — DD) fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
Meanwhile, General Electric has applied for a license to build a [nuclear] plant that would use lasers to enrich uranium for commercial use, which could provide yet another way to produce weapons-grade material. A coalition led by the American Physical Society, a professional organization of physicists, has petitioned the Nuclear Regulatory Commission to assess the risk that this technology poses to non-proliferation efforts before it issues a license. The commission, predictably, has been reluctant to do so.
It is critical to find more effective ways to control such dangerous nuclear technologies.
On the most recent Pisa [test], the top-scoring countries were Finland and Singapore in science, Korea and Finland in reading and Singapore and Korea in math. On average, American teenagers came in 15th in reading and 19th in science. American students placed 27th in math. Only 2 percent of American students scored at the highest proficiency level, compared with 8 percent in Korea and 5 percent in Finland.
And what science is Singapore or Finland or South Korea, even in 2011, known for?
[Sound of crickets]
So, yeah, they do their fractions great in Singapore, as Tom Friedman has told us. And their beggars and homeless are less obvious, maybe, then in LA.
But even Pasadena kills it as world class city. Really. There’s no Huntington or Route 66 or Rose Bowl and parade in Singapore. And there’s no view of the mountains.
And we don’t need the US to sell us a multi-billion dollar air force of McDonnell Douglas F-15’s to make the dicks in a token military of no consequence hard.
Your host is getting a serious hate on for Singapore in the news as a meaningful measure of anything other than how to run a place only for the wealthy and vain in a high button zip code, except on an island. And we have orders of magnitude more of that here.
I was raised in a community of teachers at Pine Grove Area High School in the Sixties and Seventies in woodsy Pennsylvania. We didn’t have an F-15 air force.
I’m betting schools in Singapore now aren’t really much better than it was. And I’ll wait for someone to prove me wrong.
F— Singapore and the very very small number of Americans obsessed with it.
If I were President I’d send classified diplomatic memos to all the Singapore chambers of whatever saying this: “Whenever you show up in some news story in the New York Times for any reason, I’m clawing back five F-15’s or refusing the sale of parts to service all of your fleet until you have none or just airframes that won’t fly.”
“We’re broke!” is the GOP blandishment used to justify imposing hardship on the middle class as Republicans go about the work of transferring more and more wealth to the already very well off. A few days ago, in the case of Wisconsin I highlighted Scott Walker’s famous number – $137 million in an immediate shortfall requiring drastic action. In this case, a forked-tongue claim used to usher in union busting and demonization of school teachers.
However, the same day the Milwaukee Journal-Sentinel was publishing a story on defense contracts in the state.
The Army was the largest buyer of Wisconsin goods and services, with more than $7.2 billion in purchases.
Oshkosh Corp. has recently geared up to produce 23,000 Army trucks and trailers in a five-year deal valued at $3 billion. It is the largest Wisconsin-based defense contractor.
And Marinette Marine Co. expects to receive billions of dollars to build Navy combat ships. More than 600 people attended a recent vendor fair sponsored by the company in Green Bay.
Paraphrasing the famous filmmaker Michael Moore this week, the United States is not broke. It is awash in cash.
Arms manufacturing (defense spending) is a protected industry in the US. It is an example of socialism for the private sector. It is awash in cash.
And it is not hard to understand why businesses in Wisconsin, and every state, wants a piece of it. Once established, it’s guaranteed business, underwritten by the taxpayers. The workers are protected.
These conditions do not exist for anyone else in the US economy.
You can throw teachers and firefighters and policemen out of work because you want to throttle public services and destroy education for the middle class. Or you ship all the jobs overseas to China if you are in non-military domestic production because labor is an order of magnitude cheaper there.
But arms-manufacturing labor is holy. It competes only with itself.
And it is easy to see by the numbers from it that the US is definitely not broke. There is money to solve even fake crises like the one Scott Walker has brought upon Wisconsin.
“Weinbrenner Shoe Co. of Merrill recently won a $9.8 million contract to make hot-weather boots for the Army, Navy, Air Force and Marines,” continues the Journal Sentinel piece.
You go to Target or Wal-mart to buy shoes, socks, any garments.
This country used to make such things but that was all thrown away. Where is it made now? What do you get to buy? What is it that you can afford? Rhetorical questions to which everyone knows the answer. Made in China.
Now this does not begrudge the jobs of shoemakers for the US military. It is only to illustrate that when there is a will to preserve jobs and a good living wage, the US government certainly will do it. If it’s the right industry, connected to arms manufacturing and defense.
“If you are struggling like most companies are in this down economy, there is definitely a place for military business,” the vice-president of the Wisconsin shoe company told the newspaper.
And he is certainly right. As far as the argument is taken.
However, the larger picture is one that asks questions about fundamental fairness and rigging of the economic system, rigging in which middle class work has been compressed in the private sector until it won’t support a middle class, with the only parts left being in arms production, essentially subsidized by the taxpayer and government. It is a state of affairs which also reduces labor to a game of musical chairs with very poor odds in which you need to be a lucky person to get a job in manufacturing protected by defense spending.
A graphical breakdown on defense spending in Wisconsin, furnished by the newspaper, is here.
If you click out to it you’ll also notice one of the big recipients of dollars in the Wisconsin economy is General Electric. Overall, GE is a company now substantially into the business of national looting and tax avoidance, like many others.
As far as Wisconsin is concerned, the defense money is for the GE Healthcare subsidiary.
And despite the images in current General Electric commercials of happy workers doing a country line dance to Allen Jackson’s “Good Times,” GE’s jolly mood has nothing to do with the interests of average Americans.
When it’s private sector work is dependent on unprotected labor, GE outsources. Light bulbs? Make them overseas.
On the other hand, defense spending, for anything, is always good to take because that’s guaranteed by the taxpayer.
A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success? …
Take the case of General Electric, whose chief executive, Jeffrey Immelt, has just been appointed to head that renamed advisory board. I have nothing against either G.E. or Mr. Immelt. But with fewer than half its workers based in the United States and less than half its revenues coming from U.S. operations, G.E.’s fortunes have very little to do with U.S. prosperity.
By the way, some have praised Mr. Immelt’s appointment on the grounds that at least he represents a company that actually makes things, rather than being yet another financial wheeler-dealer. Sorry to burst this bubble, but these days G.E. derives more revenue from its financial operations than it does from manufacturing …
The Wisconsin economy, as it stands now, is shown by a chart at the Bureau of Labor Statistics here.
Mass layoffs increased in January, probably because of the end of sales jobs for the holidays.
The overall employment trends, as will the rest of the country, aren’t great. Employment is increasing in leisure and hospitality, jobs which generally don’t pay very well. Manufacturing also shows a significant rise.
Education also makes up a substantial part of the workforce. And this is the profession that is locally and nationally threatened.
Also worth noting is an article from Minyanville on a real protected part of arms-manufacturing.
Right now, federal prison inmates in correctional institutions across America are making parts for Patriot missiles.
They are paid $0.23 an hour to start, and can work their way up to a maximum of $1.15 to manufacture electronics that go into the propulsion, guidance, and targeting systems of Lockheed Martin’s (LMT) PAC-3 guided missile, originally made famous in the first Persian Gulf conflict.
This is arranged by Unicor, a company seemingly precisely for the delivery of prison manufacturing labor. Happily, the workers won’t be attacked for being part of a selfish union needing busting.
One fully understands why Lockheed Martin may like prison labor. It’s guaranteed and protected, so to speak.
Naturally, it smells immoral. The story has a number of national security experts furrowing their brows over the implications and ludicrously speaking about inefficiency.
You don’t need to be an economist to figure out prison labor is inefficient. Or that efficiencies in the US economy exist only to increase inequality.
Prison-delivered arms manufacturing doesn’t look right. It creates a shabby impression. There is also pro and con talk about protecting “maintaining the defense industrial base.”
Break those union parasites, though. Ship everyone else’s jobs off to China.
Why Are Prisoners Building Patriot Missiles? — is here. Highly recommended.
The US press continues to massage stories on China’s alleged rising military and how it poses an imagined regional threat to the biggest armed force in history — ours.
They are repellent pieces, flying in the face of common sense and evidence as plain as the nose on your face and now hanging in US stores everywhere.
When China launched threatening war games off Taiwan 15 years ago on the eve of an election on the self-governing island, the U.S. deployed two aircraft carriers, and China quickly backed down.
Things don’t seem so one-sided any more.
China’s military has been on a spending spree at a time that the debt-ridden U.S. government is looking to cut defense costs. On Friday, China announced a 12.7 percent hike for this year, the latest in a string of double-digit increases.
That trend has triggered worries in Congress and among security analysts about whether the United States can maintain its decades-long military predominance in the economically crucial Asia-Pacific.
While the U.S. military has been drained by 10 years of costly conflicts in Afghanistan and Iraq, China has developed air, naval and missile capabilities that could undercut U.S. superiority in China’s backyard.
There are two places where things are one-sided. Like the growth of the missile, tank and jet aircraft factories of the United States.
And all the stores the middle and lower classes shop in where the durable goods are exclusively made in China or some other east Asian nation with equivalently cheap labor..
Which brings us to Guitar Center, a repeat easy example of China’s alleged excellence in factory production of stuff once invented and made here.
Almost two years ago DD went to Guitar Center to buy a Line 6 Pocket POD, a cheap palm-sized computer that produces virtually studio ready guitar amplifier tones. Line 6 is a US company. However, all its kit — like anything having to do with computers — is made in China.
The first two Pocket PODs were dead right out of the box, one with an obviously defective display, the other with a non-functioning power source. Guitar Center had to eat both of them before the third box I opened had an actual working model in it.
That’s Chinese quality control. You can count on rubbish and the sub-standard. Most Americans will have already noted that doesn’t mean so much in consumer goods when there are no other options. Sub-standard is the new standard.
However, it’s not exactly ready for prime-time in any modern big military, which — most people have also noticed, are highly digital and networked in their command and control functions.
Two out of three advanced fighter aircraft with parts of their innards dead even before action are OK when it’s all just for show and making news. However, when it’s time to meet the enemy for real … better hope you don’t have to go into action anytime in the next twenty years.
The new Guitar Center catalog shows the hollowing out which has occurred in the customer base. There are two tiers of goods. Pricey made-in-America guitar custom-shopped for the wealthy. And everything else, made in China for the US underclass.
Anecdotally from the pages of the catalog, it looks like a 90/10 percent, a split coincidentally something of a mirror image of US inequality.
The gross weight of goods in the store is taken up mostly by Chinese-made stuff. But the riches and high net value lies all in the top ten percent. If you buy anything made-in-China, it devalues to virtually nothing the minute you walk out the door, as a trip to any pawnshop in Pasadena will attest. If you buy the custom shop American-made goods, they are “investments.”
It’s a depressing experience, rock hard proof there’s no way to fix the American economy so that it’s more egalitarian or fair to the middle class short of radical government intervention, the re-establishment of union membership in the private sector and across the board increases in wages.
The people who work at the counters at Guitar Center do not really earn a good living. And while the prices for Chinese made rock ‘n’ roll paraphernalia are very low, the premium goods are priced well out of the reach of employees. Unless they wish to go deep into hock for the sake of a piece of something reserved for musicians with increasingly rare major label deals or members of the plutocracy.
For the plutocrats, in this edition:
Fender Custom Shop Heavy Relic 1962 Stratocaster: $3699.
Gibson Custom Shop ’60 Aged Les Paul: $4999
Paul Reed Smith JA-15 Spruce Top Hollowbody: $4041
A ‘real’ Chinese-made Epiphone Les Paul Std: $ 399
That’s an insurmountable order of magnitude difference.
Good news, lads! Good news! Chinese military kit is really made in China!
A long scholarly paper from 2008 by James K. Galbraith took up most of my morning, stumbled across by following Krugman’s pointer to a conference on the causes and consequences of inequality at Princeton.
I’ll jump right to the conclusion of it for an excerpt:
“[Equality] fuels efficiency. A society that systematically reduces the dispersion in its structure of pay forces the pace at which technological change is absorbed by business enterprise, and therefore tends to move up the scale of available productivity levels … [this mechanism] underpinned the rise of Scandinavia where political commitment to egalitarian economic outcomes preceded the advance of the region from the middle to the top of the European (and world) income scales. Similar effects applied to the United States in the New Deal and the Golden Age of economic growth.
“It is intuitively obvious that higher levels of economic inequality make it more difficult to reduce poverty through growth. Where growth is isolated and incomes are concentrated, those who are not directly involved do not benefit. On the contrary, growth necessarily entails environmental degradation and waste, and it is on the poor and the excluded that these burdens necessarily fall. Only when the fruits of growth are distributed, as income or by the provision of infrastructure and other public goods, does the statistical fact of a rising gross domestic product come to be experienced as an improvement in mass living conditions.”
And that describes the United States now where great inequality is the norm. The spoils of growth are concentrated in a few industries — financial, military, technology. Everything else is left to rot which seems to be the very picture of national inefficiency.
It’s also “intuitively obvious” that one political party is ideologically dedicated to increasing inequality — the GOP.
The Democratic Party is less enthusiastically so but still seemingly committed to going along for the ride.
The webpage on “The Politics of the Economic Crisis” at Princeton is here.
The Galbraith paper is a suggested reading on “historical studies of inequality.” A link to it, along with many others, is found therein.
The waning and waxing of inequality in countries like Brazil, Mexico, the Eurozone and China are also analyzed in depth.
Krugman’s slide presentation, “Inequality and Crises: Coincidence or Causation???? — is also worth a quick look.
Much is on the page, to put it mildly. Going for a walk now or I’d read more.
One is whether emphasizing education — even aside from the fact that the big rise in inequality has taken place among the highly educated — is, in effect, fighting the last war. Another is how we have a decent society if and when even highly educated workers can’t command a middle-class income.
While Krugman attributes this to technological advance in this post, I’d say that some of it also has to do with inefficiency from inequality — even the highly educated, if they’re out of position when they’re downsized by the vulture economy, can’t reconnect with the labor force. “Those who are not directly connected do not benefit,” is the quote of personal interest from a few graphs upstream.
Related: Every time I’ve see Obama at a community college or going on about something have to do with Pell grants, my bullshit detector pegs.
Win The Future! Win The Future! Even as dumb slogan, it’s pretty stinky.
DD remains mildly amused by the new type of spam comments netted by the blog filter.
Today’s howler is for the sake of a firm specializing in corporate tax avoidance and off-shoring through Panama. And, routinely, the spammer tries to attach such things to posts having to do with jobs and my “Made in China” series.
It’s the very picture of the US-minted global vulture economy, very much aimed at providing enabling to American big business in national looting and pushing people to the brink.
For a mordant laugh, here’s the ID: panama dash offshor(e) dash s(e)rvic(e)s dot com. Be sure to leave out the parentheses around the ‘e’s.
Hint: Almost all of them involve working for some “US business” selling stuff made in China.
You can quickly go from minimum wage stock boy or girl to sales assistant.
Three — Under Armour, American Eagle Outfitters, Costco — are barely above minimum wage places, fronts for Chinese or east Asian made domestically branded goods.
Or you can be a cook because people still have to eat domestically.
Or you can wait tables and be a gopher for upper middle class shoeshine boys and the wealthy at Royal Caribbean. Visit Haiti and the Dominican Republic. Just remember to tell patrons NOT TO GO BEYOND THE WIRE FENCING surrounding the beach stop.
