The Staton Jones Report

From the NY Times:

A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth.

Government data, industry surveys and interviews with employers big and small indicate that many businesses remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs for companies. Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

In the second quarter, the cost of health benefits rose at a 12-month rate of 8.1 percent - more than three times the inflation rate and the rate of increases in wages and salaries.

"Health care is a major reason why employment growth has been so sluggish," said Sung Won Sohn, the chief economist at Wells Fargo.

Sounds like a pretty good argument for universal healthcare, maybe something along the lines of the Canadian or French system. Of course, as the GOP would tell us, that would be socialism. So, would you rather have a job and healthcare or French socialism? You didn't need that job anyway, did you?

Feeling safe up there in the SUV nosebleed section? You're dead wrong. America, you've been sold a bill of goods and it's called the sports utility vehicle. They pollute more than cars. They get worse mileage. And oh by the way, they kill you more often too, not that you (the buying public) seem to care.

People driving or riding in a sport utility vehicle in 2003 were nearly 11 percent more likely to die in an accident than people in cars, the figures show. The government began keeping detailed statistics on the safety of vehicle categories in 1994.

S.U.V.'s continue to gain in popularity, despite safety concerns and the vehicles' lagging fuel economy at a time when gasoline prices are high. For the first seven months of 2004, S.U.V.'s accounted for 27.2 percent of all light-duty vehicle sales, up from 26 percent in the period a year earlier, according to Ward's AutoInfoBank. However, sales growth for the largest sport utility vehicles has stalled lately, while small and medium-size S.U.V.'s, engineered more like cars than pickup trucks, continue to make rapid gains.

What kind of moron buys these stupid vehicles? Middle-class suckers, that's who.

Thanks to $46 oil, this month's trade gap surged to $55.82B, a galactic high.

The Commerce Department's monthly trade report showed the June imbalance was up a sharp 19.1 percent from a revised May imbalance of $46.88 billion. Exports of goods and services fell by 4.3 percent to $92.82 billion while imports climbed 3.3 percent to a record $148.64 billion.

The far bigger-than-expected jump in the deficit caught analysts by surprise. They said it would act to further slow an economy already struggling with what Federal Reserve Chairman Alan Greenspan described as a “soft patch” in the early summer.

“America is bleeding badly in the trade area,” said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. “This implies not only weaker economic growth but a weaker dollar, which will contribute to inflation down the road.”

Our economy is tanking and our spending is spinning out of control. Do. The. Math.

From the Washington Post:

Since 2001, President Bush's tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families, the Congressional Budget Office has found, a conclusion likely to roil the presidential election campaign...

The analysis, requested in May by congressional Democrats, echoes similar studies by think tanks and Democratic activist groups. But the conclusions have heightened significance because of their source, a nonpartisan government agency headed by a former senior economist from the Bush White House, Douglas Holtz-Eakin. Indeed, the study will likely stoke an already burning debate about the fairness and efficacy of $1.7 trillion in tax cuts that the president pushed through Congress.

The rich get richer and middle-class idiots continue to vote Republican...

From economist Paul Krugman in the NYT:

Last year's tax cut was officially named the Jobs and Growth Tax Relief Reconciliation Act of 2003 - and administration economists provided a glowing projection of the job growth that would follow the bill's passage. That projection has, needless to say, proved to be wildly overoptimistic.

What we've just seen is as clear a test of trickledown economics as we're ever likely to get. Twice, in 2001 and in 2003, the administration insisted that a tax cut heavily tilted toward the affluent was just what the economy needed. Officials brushed aside pleas to give relief instead to lower- and middle-income families, who would be more likely to spend the money, and to cash-strapped state and local governments. Given the actual results - huge deficits, but minimal job growth - don't you wish the administration had listened to that advice?

Oh, and on a nonpolitical note: even before Friday's grim report on jobs, I was puzzled by Mr. Greenspan's eagerness to start raising interest rates. Now I don't understand his policy at all.

USA Today is reporting that Computer Science majors are dropping in U.S. colleges.

Nationwide data aren't available. However, last year, the number of newly declared computer science and computer engineering majors in the USA and Canada fell 23% vs. the year before, says the Computing Research Association, a college trade group. The figures aren't expected to improve this year.

Blame the bleak tech job market. In the past, a computer degree meant "instant riches, or at least a well-paying, secure job," says San Jose computer science chair David Hayes. "Now, the perception is jobs are going overseas, and people are being laid off."

You'd have to be insane to spend $100K on a CS degree today.

Slashdot is running a story about the 15% drop in IT employment this year.

According to Information Week, the lastest Bureau of Labor Statistics report shows that the number of Americans calling themselves IT professionals has decreased by nearly 160,000 in the last 3 years, and the number of programmers, analysts, and support specialists has fallen 15% since the first six months of 2004. According to IT World, the number of employed Software Engineers fell by 15% from April to July of 2004 (from 856,000 to 725,000).

The U.S. is experiencing a dramatic "brain drain" that in the Cold War would have triggered a massive response by the Federal Government to keep these folks employed. Mr. Bush, where is the "job stimulus" for IT?

July's job growth was a statistically insignificant 32K new jobs (expect it to be revised to below zero next month, unless Rove successfully "adjusts" the numbers ahead of the election), virtually guaranteeing that Bush's job losses will remain significantly above zero, despite all the predictions by economists (except, notably, Paul Krugman) that sustained job gains on the order of 150 ~ 220K per month would obvious follow Bush's insane tax cut for the rich™.

Economists, however, look more closely at the payroll figure as a better barometer of the health of the jobs market. The 32,000 net jobs added in July represented the smallest gain in hiring since December and followed a revised gain of just 78,000 in June, even less than previously reported. May's payrolls also were revised down to show a gain of 208,000.

Analysts were expecting the economy to add anywhere from 215,000 to 247,000 jobs in July. They were predicting the jobless rate to hold steady at 5.6 percent.

Job growth for the last two months is revised down and yet the drumbeat from Washington continues to be "happy days are here again". What a bunch of election year crap. This Administration's economic policies have brought us $44.41/bbl. oil, the first net job loss since the Great Depression and crushing, insane deficits in both Federal Spending and trade imbalance.

Isn't it time for the "shareholders" of the United States to fire it's "CEO"?

Too busy to wolf down half a dozen sugar-globs? No problem, slurp it down in drink form! Now people who've had their jaws wired shut to keep them from overeating can overeat anyway. Genius!

You can read about it at the CNN/Money site.

Note to Krispy Kreme: the low-carb trend is not a "fad," it's an epiphany. What do you feed cattle to fatten them up? Fat? No, carbs.

Duh.

Interesting alternative to Gross Domestic Product from Redefining Progress. The claim is that GDP inaccurately reflects economic health by blinding looking only at the money we spend. There are other factors, such as volunteer work, crime, pollution, environmental degradation, resource depletion, etc. According to the GPI, our nation's economy is not nearly as rosy as GDP would suggest.

Looking forward to discussion amongst SJR's economic pundits.

The Seattle Times is publishing a article about documentation leaked by an unknown MS employee detailing the offshoring of core product development to India.

A Seattle labor group said it has new evidence that Microsoft is shifting high-level work to foreign contractors, including work on the next version of Windows.

Microsoft has long hired outside companies to supplement its labor force and develop partnerships in the technology industry, but its activities in India are being scrutinized amid the national debate over the outsourcing of technology work to developing countries such as India.

A concern is that even the highest-skilled and best-paying work, such as software development, is now subject to competition from lower-cost locales abroad.

The evidence is a cache of Microsoft contracts with Indian technology vendors that were leaked to the Washington Alliance of Technology Workers, an AFL-CIO affiliate that has focused on outsourcing in its effort to organize tech workers.

"The notion that next-generation technology is going to be the exclusive domain of domestic-based employees of the company is rapidly fading away with the disclosure of these documents," said Marcus Courtney, WashTech president and organizer.

The documents include wage lists and projects for Microsoft at Infosys, Wipro, Satyam and Tata Consultancy Services, the four largest Indian software and technology-services companies.

Much of the work involves testing, preparing user guides and building specialized tools. One of the Infosys projects is a guide for customers switching from an Oracle database to a Microsoft database.

White collar jobs are in the same peril today that manufacturing jobs were in the '80s.

You don't have to tell me this, but CNN Money has a story on it.

Americans' overall income shrank for two consecutive years after stocks plunged in 2000, the first time that has effectively happened in the since the current tax system was put in place during World War II, according to a published report Thursday.

The New York Times, reporting data from the Internal Revenue Service, said gross income reported to the agency fell 5.1 percent to $6.0 trillion in 2002, the most recent year for which data is available, down from $6.35 trillion in 2000. Because of population growth, average income fell even more, by 5.7 percent, and adjusted for inflation the decline was 9.2 percent.

The paper said the decline was due to a combination of the big fall in the stock market and the loss of jobs and wages in well-paying industries as the recession started in 2001.

More proof that after almost four years of Bush, we're worse off. Hope, friends, is a new President. By the way, this article refers to the years 2000 to 2002. When 2003 is factored in, it will likely be three years.

Of course, CEO pay is up by 50% this year, with the median raise a disgusting 22%.

This Business 2.0 article from last year says that we will see an unprecedented job boom, brought on by demographics, beginning in the second half of this decade. Some of the BLS projections for tech workers cited by the article may be a little optimistic, but I think the demographic argument is pretty persuasive overall.

The cause of the labor squeeze is as simple as it is inexorable: During this decade and the next, the baby boom generation will retire. The largest generation in American history now constitutes about 60 percent of what both employers and economists call the prime-age workforce -- that is, workers between the ages of 25 and 54. The cohorts that follow are just too small to take the boomers' place. The shortage will be most acute among two key groups: managers, who tend to be older and closer to retirement, and skilled workers in high-demand, high-tech jobs...

What employers will have to do, of course, is not difficult to predict: bid up wages, raid competitors for employees, seduce older workers to stay on the job, outsource whatever work they can, and lobby the government to jack up the quota for skilled immigrants. What they will not be able to do -- at least not for much longer -- is ignore the problem. "People think we're going to have plentiful workers forever, but that's not so," explains David Ellwood, a Harvard University professor who recently led an Aspen Institute study of the problem. "If you want to hire somebody who has traditionally been the bread and butter of the labor force, you're soon going to have to hire them away from somebody else."

No sentient adult could have made it through the past decade without developing a healthy distrust of forecasts like these. But the case for the worker gap differs from the usual economic entrail reading in one crucial regard: It's based on demographics, a far more certain discipline. When Carnevale's model, for instance, shows that within seven years 30 million people now in the workforce will be older than 55, that's not a guess. It is virtually a certainty. "Any kind of demographic projection with respect to people who have already been born is notoriously accurate," agrees former Treasury Secretary Summers.

The New York Times has an expansive article about the trend of Indian citizens returning to their home country after working in the U.S. for decades. They are taking back their wealth, skills but also the U.S. mindset of government and a citizen's role, too. The change in India is palpable.

In some cases, they are seeking to refashion India implicitly in America's image. It takes leaving and returning, said Arjun Kalyanpur, a radiologist who returned in 1999, to ask, "Why should my country be any less than the country I was in?''

This impulse is not universally welcomed by some Indians who never left and who see a globalized elite - many of whom now carry American passports, not Indian - importing a Western culture as distorting in its way as British colonialism.

Still, returned reformers are already sparking change. Srikanth Nadhamuni, who helped design the Intel Pentium chip, is now applying his formidable skills to designing a software platform that could revolutionize the administration of India's local governments.

This is a good thing, for both the U.S. and India. India's talent is returning home and is (hopefully) going to make a difference there, improving conditions instead of just exploiting them.

Likewise, the U.S. job market is not able to sustain the enormous H1-B visa program of the 90's anymore. The jobs are not available, thus American industry really cannot employ it's own citizens plus the Indians and sustain a strong middle-class job market. This is depressing the earnings of the middle-class and creating a slump in software developers which will result in a shortage down the road -- few sane individuals would enter college to study computer science these days.

Indians are the most acclimated to bring the successes of the West back to India, whereas Europeans have historically failed to make a positive change in the nation.

Robert Reich thinks Fed Chairman Alan Greenspan may have raised interest rates prematurely:

Last Friday, the Bureau of Labor Statistics reported what's been happening to the wages of production workers. Now you know, Alan, this is a huge group -- everyone who's not a manager -- accounting for 80 percent of the workforce. Production workers' wages dropped in June. They dropped in May, too. To put this in concrete terms, in June, production workers took home an average weekly paycheck of $525.84. That's about $8 a week less than they were taking home last January. It's the lowest level of weekly pay since October of 2001.

Here's why you ought to be concerned, Alan. Low wages are a drag on the economy because workers are consumers. If the pay of 80 percent of American workers is dropping, you've got to wonder where the money's going to come from to buy all the stuff they're producing. They can't easily borrow more money, because they're already deep in debt. Plus, you and your colleagues at the Fed have started to raise interest rates, making borrowing more expensive. So, inevitably, consumer spending is going to slow down. And this in turn will further slow job growth and wages.

This from The Career News:

WASHINGTON, DC -- The good news is for three months running, the labor market has again been generating significant numbers of new jobs. The bad news is new Labor Department data show that over the same three months an exceptionally large number of jobless workers exhausted their regular unemployment benefits and did not qualify for further federal aid.

The Temporary Extended Unemployment Compensation (TEUC) program was created in March 2002 to provide up to 13 weeks of federally funded unemployment benefits to those who have run out of regular unemployment benefits. Individuals who have exhausted their regular benefits since December 20, 2003 have not been eligible for TEUC aid. The lingering high level of exhaustees suggests that the program was turned off too soon.

Analysis indicates that more than two million unemployed workers have exhausted their regular benefits and are without further federal unemployment aid from when the TEUC program ended through the end of June. The next few months are also likely to see an exceptionally large number of exhaustees. Projections suggest that in July, August, and September of this year, the number of jobless workers without aid will set records for those particular months.

Well, as Karl Rove will tell you, timing is everything. Screwing the unemployed leading into an election sure sounds like a winning move to me. Keep 'em coming, Bush old boy.

Look foward, dear citizens, soon, to your Great Leader's announcement that the budget deficit is shrinking! That is, the actual budget deficit is less than the estimate. Oh, but it's still larger than last year. So is it shrinking? Growing? Or growing like a frickin' cancer?

OMB is likely to say its latest projection shows the fiscal 2004 deficit will be around $420 billion, about $100 billion less than the $521 billion the administration forecast when it released its budget in February. Administration officials will say this is an indication of how much better the budget outlook has gotten over the past few months and that the president's policies are working.

What they won't say is that the deficit situation is actually getting worse. A $420 billion deficit will be a new all-time high in nominal terms. The $420 billion record will replace the one set last year, when the deficit reached $375 billion.

Fuzzy math, my ass. Why can't the GOP do simple arithmetic? For that matter, why do I come from a nation of innumerates?

Nils Pratley at the Guardian reports on speculation that the U.S. dollar will collapse sometime in the next six years.

The American dollar is a flawed currency and will collapse in value before the end of the decade, taking with it the prosperity of the American nation. Investors should be buying commodities - platinum, lead, wheat, sugar, oil, the sort of assets that haven't been fashionable for a quarter of a century or more. While you're at it, teach your children to speak Mandarin, the coming language of the 21st century. And don't encourage them to do an MBA: "Tell them to be a farmer and do a real job."

Meanwhile, I note that oil is on its way back up due to larger-than-expected (by a factor of four) inventory drawdowns, as well as fear of supply disruptions from terrorist attacks (on both foreign and domestic energy infrastructure) and labor strikes in Norway and Nigeria.

Mmmm... commodities!

Fascinating piece from the Washington Post on how General Electric is shaping the corporate tax code to benefit it's bottom line:

No company in the nation had more to lose than General Electric Co. when the World Trade Organization decreed in 2002 that U.S. tax laws violated international treaties. The multinational conglomerate was saving hundreds of millions of dollars a year in taxes from the export subsidies that the United States had to discard.

But in a two-year campaign, fueled as much by brains as political brawn, GE has shaped the legislation that would replace the old export-promotion law in ways that would allow it to save as much, if not more, in taxes, according to both GE lobbyists and congressional aides. In pursuing its financial interest, the company may also have turned the U.S. corporate tax code away from domestic manufacturing and toward expansion of operations abroad.

"The bill is truly amazing," said Michael J. McIntyre, a tax law professor at Wayne State University and an expert on international corporate tax issues. "We had an incentive for exports that was illegal and had to be repealed. Now Congress takes the money saved by the repeal and uses it to reduce taxes on the income earned by U.S. companies in foreign countries, thereby making foreign investment more attractive than U.S. investment."

Advocates and detractors alike say such concerns -- broadly shared -- make GE's lobbying feat more remarkable. House and Senate negotiators are expected to begin final talks on the corporate tax bill this week or next. GE's final push is about to begin.

GE was far from alone in trying to fashion what has become the most important corporate tax bill in nearly 20 years. Lobbyists for the nation's biggest companies have dusted off their favorite tax benefits and tried to sell them as part of the legislation. As a result, the measure, which began as a simple repeal of the $5-billion-a-year export subsidy, has swollen to include more than $140 billion in tax breaks over the next 10 years.

But GE's clout stands out. Of one provision eventually worth $2 billion a year, GE will reap an "overwhelming percentage," said John Buckley, chief tax counsel for the Democratic staff of the House Ways and Means Committee.

"They're getting a lot more out of this than they ever had" from the export subsidy, Buckley said.

From Salon:

Lay could dish the dirt on several important topics: the Karl Rove-brokered push that resulted in Enron paying Christian conservative turned super-lobbyist Ralph Reed $300,000; Lay's dealings with secretary of state turned super-lobbyist James Baker; why Enron hired Ed Gillespie, the man who now heads the Republican National Committee; the reason for Lay's decision to allow the Bushes to use Enron's fleet of airplanes as their own; what happened in those meetings with Dick Cheney and his energy task force; and what really happened with the California energy crisis.

You know, for an unassuming and self-described clueless CEO, "Kenny Boy" could really, really spill bean after bean after bean, ad nauseum, about Shrub.

Big surprise! The glowing economic numbers reported for Q1 were ... lies. Oh, big surprise.

The economy grew at a 3.9 percent seasonally adjusted annual rate in the first quarter of this year, a slowdown from the 4.1 percent pace of the previous quarter, the Commerce Department said.

That contrasted with the department's earlier estimates that the nation's output of goods and services, or gross domestic product, had jumped in the first quarter. Commerce initially said in April that first quarter GDP had increased at a 4.2 percent annual rate, and then in May raised the estimate to 4.4 percent.

Why does anyone believe what this government says about the economy, Iraq, or anything else?

This comes as no big surprise to most Americans who've lost their job and found a new one since Bush ascended to the Sun Throne: your new job paid less and sucked more. The Kerry camp contents that new jobs are lower paying than the ones previously held by a majority of Americans forced out of work during the Recession.

CIBC World Markets, a Toronto-based investment banking firm, reached a similar conclusion in a report issued Monday. That study found that U.S. job creation since late 2001 has been concentrated in low-paying industries such as hospitality, education and personal services, while job losses have hit higher-wage sectors such as transportation, manufacturing, utilities and natural resources.

"The message is clear: The vast majority of the jobs that evaporated during the job-loss recovery were high-quality jobs," the CIBC study concluded.

Ironically, I had to emmigrate to Canada to find a job that paid as well as the job I lost in the U.S. last year. Canada's economy, while not booming, is still fostering high tech employment whereas Dallas (my hometown) is still downgrading high-tech jobs and pay. Until coming here, my income decreased each year since Bush took the throne (remember, the President's own laywers wrote that he was the Law now that we're at War with ... Everyone).

Salon has a column by Arianna Huffington which points out that college costs have risen 35 percent under Bush. If the "education" President would just lighten up on education, there might be some left for the remaining 99% of the country he so poorly represents.

The cost of a college education at a four-year public university has risen a devastating 35 percent since George W. Bush took office. He promised to be "the education president," but in what we now know to be the classic Bush bait and switch, he then did just the opposite, delivering a tax-slashing economic agenda that forced public colleges and universities in all but one state to raise tuition in 2003.

I'd go farther and say that Bush is following Reagan's lead in education. In 1982, I went to Washington, D.C. to protest Reagan's cuts of student aid for college students. Bush has gone farther.

As an added little gift for the new grads, the Bush administration's latest budget-cutting guidelines will lead to a $550 million reduction in federal assistance to those college students in need of financial aid.

Reagan took Pell Grant money and turned it into ROTC money, forcing many of my friends to enter the military to finish at RPI. Bush is probably going to reinstate the draft next year, so you won't even have the illusion of choice.

In a continuation of refutations of the DoL report claiming that offshoring was eroding less than 8% of jobs, The New York Times offers a different perspective; namely, that high-end jobs are also going offshore right along with the lesser roles of coding and testing.

"The policy prescription you hear from people again and again as the response to the global competition of outsourcing is for Americans to move to high-end work," said Ronil Hira, an assistant professor for public policy at the Rochester Institute of Technology. "It's important to dispel the myth that high-end work is immune to offshore outsourcing."

"What is not clear," Mr. Hira added, "is how much of that high-end work will go abroad."

Check out this article from WiRED News. Apparently, that ole $2+/gal. gas price is starting to make a few Americans think again about the VW TDI engine. I switched in March of 2003, expecting Shrub's war to hammer the price of gas ... it took a year, but it finally happened.

Go here for more info on TDI cars.

The terror attack in Saudi Arabia against oil industry workers (not surprisingly) shot oil prices up $2/bbl. today, closing at $42.31. That's an extra $100B out of the pockets of US consumers if this price sticks (it won't, maybe, right?).

Remember to vote your pocketbook this fall, assuming you can still drive there.

Krugman turns the rock over on the GOP disinformation machine:

The end result of current [economic] policies will be a large-scale transfer of income from the middle class to the very affluent, in which about 80 percent of the population will lose and the bulk of the gains will go to people with incomes of more than $200,000 per year...

Does Mr. Bush understand that the end result of his policies will be to make most Americans worse off, while enriching the already affluent? Who knows? But the ideologues and political operatives behind his agenda know exactly what they're doing.

Of course, voters would never support this agenda if they understood it. That's why dishonesty — as illustrated by the administration's consistent reliance on phony accounting, and now by the business with the budget cut memo — is such a central feature of the White House political strategy.

Right now, it seems that the 2004 election will be a referendum on Mr. Bush's calamitous foreign policy. But something else is at stake: whether he and his party can lock in the unassailable political position they need to proceed with their pro-rich, anti-middle-class economic strategy. And no, I'm not engaging in class warfare. They are.

The Washington Post published a story about suburban sprawl and American obesity. A new study shows that living in suburbs, where one is encouraged to drive everywhere, significantly increases one's chances of being overweight. People living in mixed usage communities (typically urban) walk far more (but not that far) than their SUV driving counterparts.

As the number of people who are overweight and obese has reached epidemic proportions in the United States, evidence has mounted that one of the main causes may be suburban sprawl. Such neighborhoods make walking or other exercise more difficult because they often lack sidewalks, road patterns that encourage travel on foot, or shopping areas that are accessible without cars.

Looking forward to the South Bronx diet.

There's a depressing story in the Washington Post about two different men in Sturtevant, Wis., one who will vote for Bush and the other who will not.

The one who is voting for Bush is a classic example of the working poor, a group of people in the U.S. who have received the brunt of Bush's tax cut punishment, and as a group have contributed more to the military deployed over seas as well. This, well I can't think of a nicer way to put it, fucking idiot, will vote for Bush come hell or high water, or even (in his case) desperate economic conditions and with children out of wedlock (he claims to be an ardent Conservative [at twenty years of age] but he hasn't married the woman he's fathered two kids with). When I read about these people, it's hard to feel sympathy for them because they are so utterly incapable of the merest beginnings of the kind of selfish mindset that is so typical of an upper-middle class Republican. Their ability to vote for their own self-preservation is almost completely missing. The GOP is killing them off (economically and in the case of Iraq, literally) and they keep supporting it.

Madness.

Oh wait! Maybe he thinks that someday the wealth fairy will bless him like it has so many he admires in the GOP. Yeah, like I said, Madness.

NPR did a story on the relatively high success rate of military recruiting in the U.S. The piece is thoughtful and has the typical NPR touches, but listening to it, I was struck by the consistency of the theme.

Young Americans are signing up for the military because they cannot afford college or they cannot find work in their (predominately) red state home towns.

The recruiter interviewed in the piece keeps repeated the mantra "it's the luck of the draw" when confronted by anxious parents with regard to their child and Iraq. I think that's the most disgusting thing in the whole story. Of course their kid is going to Iraq, that's where we have a terrible shortage of troops, where we are forcing soldiers and reservists to serve double-terms of duty, and where our leaders grossly and disastrously underestimated troop deployments.

When I was in college, I knew a few people in the ROTC. At the time, President Reagan began a not-so-subtle shift away from Federal programs that supported middle class aid for college and towards the ROTC program. Almost all the people I met in ROTC were there because it was the only way to get funding to attend RPI. I actually went to Washington on a protest by college students for the defunding of student aid in March of 1982.

The recession of 1982 was also raging across America.

This was no coincidence. Whenever a chickenhawk is in the oval office, policies are put in play that force middle class and poor college students to enter the military to help pay for their education, often deferring that education for several years (or entirely when the former student is killed in action). President Bush is the first president since Nixon to pursue these policies during actual war.

Read this article in Salon written by real Economist James K. Galbraith. He savages Greenspan's career:

Here is a man who spent the first half of his central-banking career fighting an inflation that did not exist. In so doing, the chairman of the Federal Reserve triggered the stock market crash of 1987, the recession of 1990-1991 and a "preemptive strike" on the dead beast in 1994. He had one period of glory, the late 1990s, when by doing nothing for four years he managed to bring on full employment without inflation. This was against the almost-unanimous received wisdom of the "real" economists, it should be said, and for this Greenspan should always be honored.

Joe Bob sez "check it out."

Well, it's a little off the beaten SJR path, but Christian Today has an alarmist story about young Christians pirating MP3s of Christian music.

A poll taken by the Barna Group, which performs tracking and surveying from a religious perspective, says just one in 10 Christian teens surveyed considered online music piracy to be morally wrong, and 64 percent of them said they had participated in some kind of music piracy.

Anyway, I'm wondering why they have to sell the music at all? Don't you think if Jesus had a rock band he'd let people record his concerts and distribute the recording for free, like the Grateful Dead did? He'd probably call His band "The Grateful Risen" or something.

Or maybe Jesus wouldn't be into popular music, á la the joke:

Q: What did Jesus say in the disco?

A: Help! I've risen and I can't get down!

In western Canada, gasoline is nearing the dreaded $1/litre mark ($2.55/gal.), closing at 98 cents in some markets yesterday, according to The Globe and Mail. Diesel, however, remains calm at around 70 cents a litre (and yes, I'm feeling very smug about my TDI engine now).

While reading this month's Mother Jones magazine, I came across this quote:

The cost of the Bush tax cuts this year alone is enough to give $93,793 to each of the 2.9 million people who've lost their jobs since he took office.

That's the salary I made in the U.S. when Bush took office, and it's also the salary that I cannot earn in the United States anymore. I am one of those 2,900,000 who lost their job.

Get this quote from a Wal-Mart PR goon in an article from the New York Times:

Mr. Bisio said that Wal-Mart was not anti-union, and that "the reason our associates haven't wanted third-party representation is because they have faith in the company, and it provides them with tremendous opportunity."

That's right. Wal-Mart is just so goddamned good to it's employees ... excuse me ... associates, that they don't want to unionize. Right. And "these aren't the droids I'm looking for" either. Like the Bushinistas they back with cold hard cash, these guys subscribe to the Big Lie theory, too. Tell that whopper enough and even hard working people who have to put in two extra hours a day at "Mega-Low Mart" for no pay will believe that Unions are the Worst Thing That Could Happen to them.

How did Corporate America so utterly tarnish Unions such that the very people they can help hate them? And just exactly when did Wal-Mart stop being anti-union? Afterall, their PR goon said it. They said they're "not anti-union", but they don't actually act like it. Wal-Mart spends as much crushing unionization efforts as it does bashing through local zoning restrictions. Liars. Big, fat liars. Coming to a polluted, vacant lot near you!

Yesterday, USA Today had a story titled Some Moms Quite as Offices Scrap Family-Friendliness. You'll have to pay for the archive, but here's a juicy bit from the story:

Companies that once touted family-friendly benefits are cutting back on them in this tight job market, slashing programs that let employees telecommute, work part time, share jobs or take paid family leave. The reversal is having a profound impact on a number of working moethers now struggling with whether to leave jobs for their families.

The labor force participation rate of mathers ages 15-44 with infant children — under 1 year old — slid from a record 59% in 1998 to 55% in 2002, part of the first downward slide since the Census Bureau began tracking the figure in 1976.

Congradulations, America! You finally tipped the two ton mark on the scales. According to this article in the New York Times, American cars and light trucks weigh more than 4000 lbs. on average (4,021 lbs., to be exact).

Detroit was recently ranked as the nation's most obese city by Men's Fitness magazine. Perhaps it is no surprise, then, that the Motor City's chief product is also losing the battle of the bulge.

The average new car or light-duty truck sold in the 2003 model year tipped the scales at 4,021 pounds, breaking the two-ton barrier for the first time since the mid-1970's, according to a report released by the Environmental Protection Agency last week.

Now we have the lard-ass vehicles to go along with our lard asses. That's just freaking brilliant. Go celebrate at McDonalds you gluttonous pigs! Better yet, eat a 2" thick steak at your local steak house, and be sure to drive your Belchfire 9000 there and don't forget to idle the engine in the parking lot for ten minutes.

Bigger is not safer for the guy you T-bone on the road.

Editor's Note: this appears to refer to the same article the Heimie published earlier. I wish to keep this posting active because it sets a tone that's more in tune with how we feel about this situation.

There is a story in The Washington Monthly that all home owners should read.

Greenspan's rather ham-handed effort to get them to go for ARMs, is a sign not of the chairman's own eccentricity or advanced age, but, instead, of the economy's current unsteadiness. Greenspan knows, perhaps better than anyone, that this economy is perched nervously on top of a wobbly, Dr. Seuss-like tower. Our recovery is propped up by consumer spending, which is in turn propped up by mortgage refinancing, and if that refinancing dries up before more props can be put in, the whole edifice could fall. "Since long-term interest rates cannot fall low enough to facilitate another wave of fixed-rate refinancings, he is trying to encourage homeowners to refinance one last time: fixed to ARM," Peter Schiff, president of Euro Pacific Capital in Los Angeles told the San Francisco Chronicle.

Bottom line: you kept spending through the Bush Recession because Greenspan kept lower interest rates, and that allowed you to (in some extreme cases) refinance each year. And everytime you did, you "paid off" some debt, but at the expense of your home's equity and based on a rising (and if the bubble bursts, fake) property value. What happens when that bubble bursts? Banks will be holding trillions in notes that are not backed by real estate worth the paper. Sound familar? I remember the late 1980's well.

So if (or when) the bubble bursts, expect the "jobless recovery" to come crashing down because the Feds will have to step in to prop up Fannie Mae (among others) and a mere $500B won't cover this check this time like it did in 1990. The U.S. government will be facing literally trillions of debt. That could lead to a currency crisis ... HERE. The rest is ... a great depression.

An article in the New York Times today provides some insight into the reverse-offshoring phenomena I'm predicting will surge by next year. In their headlong rush to core out hitech workers in this country, CEOs have "bet their dicks" (to use an old IBM phrase) on the productivity gains touted by the likes of Infosys and Wipro (two major Indian offshore consulting firms). The problem isn't that U.S. workers are lazy or over paid. It's that the customers of high technology (and in particular, software) don't really know what they want or how to make it. Software is written in a very haphazard way by all but the largest firms, requiring "dime turns" in design, long hours and weekends, but most importantly, direct and face-to-face interaction between the customers, managers and developers.

Pretty damned hard to do if you're 10,000 miles and 12 hours away.

For many of the most crucial technology tasks, they find that a work force operating within the American business environment better suits their needs.

"Only certain kinds of tasks can be outsourced — what can be set down as a set of rules," said Nariman Behravesh, chief economist of Global Insight, a forecasting and consulting firm based in Waltham, Mass. "That which requires more creativity is more difficult to manage at a distance."

That was true even though programmers in India cost Bladelogic $3,500 a month versus a monthly cost of $10,000 for programmers in the United States. "The cost savings in India were three to one," Mr. Ittycheria said . "But the difference in productivity was six to one."

Bladelogic's chief technology officer, Vijay Manwani, born and educated in India, predicts that once the "hype cycle" about Indian outsourcing runs its course, projects will come back to the United States "when people find that their productivity goals have not been met."

The Indian entrepreneurs in this country — business executives with the cultural affinity and local connections that might be most conducive to making offshore partnerships work — do not fault the work ethic of the programmers in India. But they say the geographic distance and the differences in business contexts can be difficult to bridge.

A typical challenge is the difficulty of finding programmers overseas who can go beyond following well-known procedures to the next steps of identifying problems and creating new solutions.

In the end, many say the advantages of keeping some of the most sophisticated work in the United States are related to the factors that draw technology entrepreneurs from India and elsewhere to this country in the first place: Indian engineers and software designers in this country know that the businesses whose needs are driving technological innovation are mostly in the United States. It comes down to being where the customers are.

Indian developers are just as capable as the U.S. ones, but they're not living in the same geek culture that exists in the U.S., where change is rapid, constant and if you cannot handle it, you're toast. Further, the distance and time delay eliminate the ability of U.S. customers to demand a new demo or major alteration in the development project over a weekend, or even over night. So while many of the COBOL-oriented projects that are specified in gory detail can be sent abroad, much of the actual real-time development cannot, and it will be coming home over the next year or so if CEOs wish to retain their jobs and genitals.

Only in Canada.

Headlines this week focused on reports that Canada's birthrate has fallen to historic lows, and well below the replacement rate. The long term effect is more elderly than young, which as any economist will tell you is a disaster looming. Today's editorial ("No Sex Please: We're Too Busy Making Ends Meet") in the relatively conservative The Globe and Mail denounces the Liberals for not encouraging more sex.

Ahem. Only in Canada.

PS. This place rocks!

Looks like times are getting harsher for poor little SCO (the radioactive remains of the former Santa Cruz Organization). In this article on eWeek it's noted that Baystar Investments, a front for Microsoft Corp.'s enormous investment group, is requesting a refund of 20,000 shares of SCO. This investment ($20M) was widely regarded as "throwing around" money for SCO to use to continue it's harrassment lawsuit against Linux vendor IBM and several smaller companies using Linux. Several industry pundits are now expecting SCO to bite the dust as a result of the defunding -- a well deserved finish if it proves true.

McDonalds is exploring ways to encorage it's adult and obese customers to exercise more. In an article in the NY Times, the food giant is promoting a "Go Active! Adult Happy Meal" product containing "a salad, bottled water, and even a pedometer and literature explaining the benefits of walking."

McDonald's action comes at a time when the fast-food industry is dealing with widespread criticism and legal challenges about its contribution to poor health and obseity. Surveys and government studies show that more than 60 percent of adults and 20 percent of children are now overweight or obese, and consumers filing lawsuits blaming fast-food makers for their wide girths.

KFC has tried to market its fried chicken as part of a healthy diet. Ads for Subway Restaurants show real people holding loose-fitting clothing and bragging that they lost weight by sticking to a healthy sandwich diet. And Wendy's is touting its spinach salads.

The companies say they are not responding to public criticism or the threat of lawsuits. But there is undoubtedly more pressure on them to offer healthier fare. Two bills before Congress would require restaurants to provide diners with nutritional information about meals.

In Canada, there is much political debate over an effort to impose a "fat tax" on fast food products (defined as costing <$4CDN). Liberals point out that this tax is highly regressive, hitting the poorest consumers the hardest.

This is a complex issue because of the fact that literally everyone must eat, and imposing taxes or new products to steer people towards a more healthy lifestyle is a difficult task made more so because of the ethical and legal issues it raises about the relationship between State and Citizen.

Today is Income Tax Day! If you work for a living in the United States, you have to file your 1040 return today. If you are one of the luck receipients of GWB's $450B tax cut (and you know who you are) you should go celebrate by buying another Mercedes or yacht slip in the Virgin Islands, because today doesn't apply to you, the true "lucky ducks" of this Administration.

And hats off to Mr. Bush and Mr. Cheney for lowering their own personal taxes by more than my house is worth ... for this year alone. Remember to vote your pocketbook this fall, and not your lottery ticket.

Chris Temple makes some interesting observations in a guest column at PrudentBear.com. He sees the Bank of Japan's recent announcements regarding the Yen, China's billowing economy and OPEC's decisions to cut output (which, so far, by the way, has proved to be a bit of a farce, given that OPEC's March output actually rose considerably) as extraordinary signs of America's weaking power in the world.

Scott Kirwin, a computer consultant in Wilmington, Del., was a contract worker for J.P. Morgan Chase for about three years when he was told he was being let go. He says the contract was ended so that Indian workers could replace him. He was asked to train the replacements, he says, in order to keep getting a paycheck.

This is demoralizing for several reasons, one of which is that I'm a contract worker for J.P. Morgan Chase. Read the USA Today story on Yahoo! News.

Wal-Mart took a body blow yesterday in California, after spending $1M to promote a ballot measure to, in effect, create a mini-zoning district exclusively for it's planned "Super Store" in Inglewood, CA. Repeatedly rebuffed by the city's zoning board, Wal-Mart paid signature gatherers (sound familiar? This is the only growing job industry in California) to get a measure on the ballot to create a seperate zoning district (in effect, a mini-city) exclusively for the site. They lost at the ballot box, 60 to 40, in a clear triumph for unions and the working poor.

"I think that it means that Wal-Mart has to go through the front door and deal with cities and communities as equals," said Madeline Janis-Aparicio, leader of the Coalition for a Better Inglewood, a group formed to fight the Wal-Mart project. "They can't trick cities and communities into giving away the store, getting everything they want without any oversight. They're going to have to do business differently if they want to do business in California."

Wal-Mart rarely backs down from a fight, and has vowed to keep on pressing this ballot measure across the state in communities that (let's face it, from Wal-Mart's perspective -- defy) deny them zoning for their mothership stores. The question I never hear answered is how much money does Wal-Mart lose to get one of these stores built? Is there some region of the nation that is subsidizing this by having the profits from their stores funnelled into these expansion drives? I'd love to see the internal numbers; it's so very much like how Microsoft funds new tentacles ... er ... products, by taking profits from existing monopolies ... er ... operating systems.

This just leaves me dumbstruck. Here's a quick link to the picture enlarged.

Sure, people are silly, vain, and generally foolish, and it's probably a >99% safe procedure. But it is your eyeball we're talking about! I had corrective surgery on my orbs in 1990, and even though I was highly confident about the procedure and have been utterly pleased with the result, I still agonized over it. I treasure my vision, such as it is.

To risk one's eyes for this sort of vanity -- at over $1k each -- what are these people thinking? And there are people lining up for it! Incroyable.

So what's the logical extension? We've all heard of retinal scans being better unique, personal identifiers than fingerprints; and fingerprint scans are already being used in some banks for check cashing and withdrawals. Combine these corneal implants with RFID technology and we've got retinal scans that can be used for personal commerce. "Welcome to Wal-mart, please wait for opti-scan."

I don't like that level of complex, individual traceability. The cautions and abuses far outweigh the merits.

I love improved technologies, but I loathe how some of them are employed.

Salon has an article on the horrors of offshoring in today's edition. It highlights the gross inexperience Indian programmers have, the CYA mentality of American management in going the offshore route (it'll save us a fortune!), and the reality of the experience:

"I had to explain to them what batch processing was," says Smith, exasperation showing in her voice. "I had to explain what a job dependency was. Totally basic things you'd expect any 26- or 27-year-old American programmer to know, they didn't know."

Anger venting, Smith ends with a flourish: "Where did all our savings go when, at the end of the day, we have a piece-of-shit system that'll just need to be replaced in three years?"

I'm particularly amused at the rapid rise in wages in India caused by the American corporate rush to offshore. Soon enough, these guys may well be as expensive as their first world counter-parts. That I would be ok with.

"I had one company take a huge portion of our code," he says, recalling an Indian contract. "They slapped a new front on it and began selling it as a competitive product. That wasn't fun."

I've been predicting this for some time. Asian firms are not at all squemish about taking your product developed under contract offshore and turning it into their product sold everywhere. American firms that outsource and offshore all their intellectual property are committing suicide. Just look at how hard Microsoft struggles to defeat pirate versions of their stuff.

Allan Sloan details the hidden agenda behind Bush's tax cuts in this week's Newsweek cover story:

The blather from both sides obscures the real, but largely hidden, agenda behind the Bush tax cuts. Bush has been open about each item he wants: lowering taxes on capital income, such as dividends and capital gains; creating two big new income-sheltering investment plans; eliminating the estate tax. But he's not been at all forthcoming about the ultimate effect of his program. If Bush gets what he wants, the income tax will become a misnomer—it will really be a salary tax. Almost all income taxes would come from paychecks—80 percent of income for most families, less than half for the top 1 percent. Meanwhile taxpayers receiving dividends, interest and capital gains, known collectively as investment income, would have a much lighter burden than salary earners—or maybe none at all. And here's the topper. In the name of preserving family farms and keeping small businesses in the family, Bush would eliminate the estate tax and create a new class of landed aristocrats who could inherit billions tax-free, invest the money, watch it compound tax-free and hand it down tax-free to their heirs.

By drastically favoring investment income over salary, fees and other "earned income," Bush would make it harder for people who start out with nothing to earn their way up the economic ladder, because they'd pay full taxes on almost everything they make, but he'd shower rewards on people who have already made it to the top rungs.

As noted in many journals, the U.S. Labor Department declared that in March, 308K new jobs were created. But, not all jobs are equal, and some ugly trends continue:

• Manufacturing gained no new jobs, but hit a statistical zero in losses, a first in 44 months.
  
• The only sector losing jobs last month was information services, where companies cut about 1,000 jobs.
  

The Bush White House is throwing away the U.S. lead in biotech research to appease the religious loonies afraid of living hundreds of years without the spectre of cancer or even old age. I predict that, ironically, Cuba and Israel will lead the world in this research (Ponce de Leon would be pleased to know that Cuba will develop the first usable longevity technology). If we don't have regime change this fall, the U.S. will continue to sink under it's own weight -- we'll be the other Russia.

The venerable DJIA is being tweaked. According to a report in E-Commerce Times:

The Dow Jones industrial average is getting rid of the losers, again. Dow Jones announced Thursday that it was dropping AT&T, Eastman Kodak and International Paper from the list of 30 industrial stocks and adding Pfizer, American International Group and Verizon Communications.

An important observation about the DJIA is made near the end of the article:

The Dow is the oldest index in the United States, and that history is one reason it is still widely followed despite the fact other indexes, such as the Standard & Poor's 500 or the Russell 3,000, are viewed as more representative of the overall U.S. market.

The Simpsons Outsourced to India posting was a joke, but this isn't! According to a Reuters wire story:

The actors who do the talking for Homer, Bart and the rest of the cartoon stars of the long-running Fox television show "The Simpsons" are keeping their mouths shut until producers pay them more money, a source familiar with the situation said Thursday.

I have just two things to say on this:

1. The Simpsons program is a cash cow, so it's only fair that some of that bounty fall in the pockets of the talent behind the show. Is it ridiculous to pay someone US$360,000 for a day's work? Not when that day's work has a 7-figure ROI!

   The only unfairness is that the "faceless" talent — the rank and file who produce the show — don't have the leverage that the on-air talent does. No raises for them.

2. If anyone from The Simpsons is reading this: I can do all of Harry Shearer's character voices dead on, so call me.

According to InfoWorld, 275,000 telecom jobs will be off-shored by 2008.

According to the article, Telecommunications operators will be the next group to benefit from the cost savings and enhanced services made possible by moving operations overseas, according to a new survey conducted by Deloitte Research.

More good news for Bush's economic advisers!

Colin Powell reassured a group of Indian students that the Bush Administration was going to do nothing to ebb the flow of offshoring jobs. Read more about this in the article in today's N.Y. Times.

Eliot Spitzer shoots and scores again with an enormous fine, penalty and restructuring of Bank of American and FleetBoston (both firms are merging) for mutual fund fraud. This is a big story and it's being covered by:

• The Washington Post
  
• The New York Times
  

Today's lead economic story in The Globe and Mail is titled U.S. employment still weak. The report condenses and reguritates what astute readers of the Business Sections already know ... the U.S. job situation is defying all the models and is well on it's way to being 3 million jobs shy of where it should be.

In the New York Times, an article about Alan Greenspan says that he's no longer worried about the deficits or even consumer debt, now at über levels. He apparently thinks that raising (or to call a spade a spade, returning) taxes to their former rates will do more damage than the current borrowing by government or consumer.

I personally think he's off his nut. Less than ten years ago, he urged Bill Clinton to pursue tax increases to stem a wildly out of control deficit. You know, that mid-sized animal roaming outside the house. Now it's the size of an Indian elephant, and he's less worried?

The article notes that American consumers, and the world in general, are becoming "addicts" for low cost debt. How long low interest rates can continue is definitely a hedge question. Consumers won't be buying $45K SUVs if they cannot get zero-percent interest on seven year car notes, are they? Greenspan contends that Americans enjoy more sophisticated and powerful financial instruments and with these, they can handle more radioactive levels of debt. I say "hogwash!" ... debt is debt, no matter how well your reword it. If you cannot pay it back, you're in over your head. Anyone who suffered through the Great Depression will gladly explain it to you.

And many economists seem to think Greenspan is just plain wrong about this one. I'm not an economist, but I have to concur. With personal bankruptcy exploding in the Dallas area, and the jobless recovery preventing the consumer from gaining traction, this consumer debt is doing exactly what the Federal debt does ... eat away at the real buying power of the people and the government.

The Washington Post says that there is no link between tax levels and unemployment:

When President Bill Clinton raised taxes in 1993, the unemployment rate dropped, from 6.9 to 6.1 percent, and kept falling each of the next seven years. When President Bush cut taxes in 2001, the unemployment rate rose, from 4.7 to 5.8 percent, then drifted to 6 percent last year when taxes were cut again.

"The fact of the matter is, we have much higher rates of employment today than we did in 1954, but our level of taxation is considerably higher," said Gary Burtless, a labor economist at the Brookings Institution. "You simply can't look at total taxation to find employment levels."