Category Archives: Economy

When US Jobs Are Shipped Offshore, It’s In A Shipping Container.

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Since Malcom McClean invented the modern shipping container in the late sixties, no individual item has had a greater impact on the US and world economies.  These large, steel and aluminum boxes can be filled with products, carried by truck to the nearest port, and loaded by crane onto a ship specifically designed to carry them.  Then, upon reaching the next port, the containers are stacked onto a rail car and carried across country, loaded onto another truck and hauled to a warehouse before being unloaded and the products distributed to stores.

Shipping containers have not only revolutionized shipping.  They have revolutionized manufacturing and distribution.  More than any other single factor, they have enabled and defined globalization.

In the process, they have eliminated jobs of dock workers and merchant mariners.  They nearly destroyed our railroads.  And they have allowed manufacturers to export jobs to countries with the lowest salaries and least regulations.  Indeed, the equipment from manufacturing plants in the US was likely shipped to new manufacturing plants in China and other parts of Asia in shipping containers.

True, these containers also bring us cheaper products.  But, following the loss of high-paying manufacturing jobs, an increasingly smaller percentage of Americans are able to afford them.

During a recent interview on National Public Radio, Rose George, author of Ninety Percent Of Everything; Inside Shipping, The Invisible Industry That Puts Clothes On Your Back, Gas In Your Car, Food On Your Plate, explained that the efficiency of the shipping container has impacted virtually every industry on every part of the planet.  For example, she noted it is now cheaper for Scotland’s fishing industry to load fish caught in the North Atlantic into containers and ship them to China to be filleted then shipped back than to have workers fillet them in Scotland!

This is good for the companies, good for China, and good for the consumer.  It’s bad for Scottish workers and bad for the environment.  For even though maritime shipping is, in itself, fuel efficient, such unnecessary shipping adds to the carbon emissions that accelerate climate change.  Ships and their sonar also create noise that disrupts communications of sea life, such as dolphins and whales.  And there is the inevitable pollution of waste from the ships.

There are other negative aspects of shipping containers.  Since they have overwhelmed ports around the world, there are far too many to be checked by customs and law enforcement, making it easier for smuggling rings to operate.  They have even been used to smuggle humans into the US.  The increased maritime traffic has also rejuvenated the once-dying pirate trade.  And increased shipping has accelerated the transfer of invasive species.

Often the shipping containers used to bring finished products to the US are filled with our toxic e-waste and shipped to countries that have few environmental regulations for the heavy metals to be reclaimed, damaging the environment and risking the health of low-paid workers in the process.

George’s book and another, The Box: How the Shipping Container Made the World Smaller, by Marc Levinson examine the scope of the container shipping industry and all of its impacts, both positive and negative, on our society.

Both books are fascinating reads.  But they could just as well have been titled How the Shipping Container Destroyed the American Middle Class.

Today’s Corporate CEO No One To Look Up To.

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The CEO of a corporation is supposed to act as the rudder of the ship; a leader; someone that sets an example for the rest of the corporation’s employees. But, increasingly, CEOs set an example of greed and unethical, even criminal, behavior.

According to a recent study by the Institute for Policy Studies (IPS), in 2012 the CEOs of large corporations were paid approximately 354 times as much as the average American worker. Worse, about 40 percent of the CEOs were fired for cause, paid fines or settlements for fraud, or resorted to asking the government to bail out their companies.

Some leadership!

The IPS study also found that about 30 percent of corporations led by the highest-paid CEOs were subsidized with taxpayer money. By taking advantage of a variety of tax deductions and loopholes, CEOs have been able to increase corporate profits while reducing or eliminating corporate taxes. And since most of these corporations are multinational, many have created P.O. Box “headquarters” in offshore tax havens to shelter corporate profits. By “gaming” the tax codes, the CEOs are able to pocket the savings for themselves.

Moreover, most CEO compensation is based on share price. That may seem like a good idea that encourages CEOs to work for the benefit of stakeholders. But the real reason for such compensation plans is self-interest. It’s easy for a CEO to make decisions that will increase sales and share prices over the short term, yet mortgage the company’s future. Unfortunately, many CEOs simply don’t care about the future because they don’t plan to be with the company more than 2-3 years. That’s all the time they need to be set for life.

But many want even more.

Unwilling to settle for multi-million dollar salaries, stock options, perks and a long list of benefits, some corporate CEOs create what amount to elaborate Ponzi schemes and a variety of high stakes gambling schemes using investors’ money. When their schemes fail, they seldom face charges and, even when they’re indicted, they’re seldom subjected to jail time. On those rare occasions when they are, “jail” often looks more like a country club and their sentences are often reduced or commuted.

Worse, when unscrupulous CEOs are fired, resign or are forced out, they almost always receive “golden parachutes” consisting of full retirement benefits and large lump sum payments allowing them to walk away with tens of millions in ill-gotten gains subsidized by investors and middle class taxpayers.  Meanwhile a high school dropout from the inner city who steals $50 can serve years of hard time.

It makes one wonder whatever happened to the nation that once proudly proclaimed “all men are created equal.”

Beware The Pendulum.

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As a creative director for ad agencies and as a part-time college instructor, I used to teach that social trends and fashions responded like a pendulum with a 360-degree axis. The pendulum freely swings, but never back to exactly the same place twice.

I was reminded of that description while watching the ceremonies marking the 50-year anniversary of the March on Washington. In 1963, the US seemed hopelessly racist. In the Jim Crow South, blacks were segregated from whites. African-Americans were denied the right to vote. Peaceful civil rights demonstrators were met with fire hoses, police dogs, beatings and murder.

The Voting Rights Act of 1965 began to change that.

In the last two presidential elections, African-Americans voted in record numbers helping to elect the first US president of African-American heritage. (I’ve always marveled that his Irish-American heritage is seldom mentioned because of the color of his skin.)

Obviously, the pendulum has swung a long way from 1963. But it seems to be swinging back.

Since the election of President Obama, numerous states in both the North and the South have passed restrictive voting laws to make it more difficult for minorities to vote. No other US president has been subjected to such angry derision. No other president has been repeatedly asked to show his papers to prove that he is a citizen. No other president has been interrupted during a State of the Union speech by a “Congressman” calling him a liar. No other president has been met by such congressional obstruction.

Racism did not disappear in the sixties. It is just more subtle. There are fewer racist killings, beatings and other hate crimes. Today, the racism is economic and institutionalized. Unemployment for African-Americans is roughly double that for whites. Many of those who do have jobs are not paid a living wage. Schools in African-American communities are grossly underfunded compared to those in white communities. African-Americans are not only three times more likely to be arrested as whites, they receive longer sentences for similar crimes.

Indeed, young African-American and Latino males are seen as a source of profit for the private prison industry. They are also disproportionately represented in our military and asked to fight wars to protect the economic interests of large corporations that are almost exclusively owned and managed by wealthy white Americans.

News organizations, once again, insert race into stories of crime. Media commentators feel comfortable talking about the disintegration of African-American families while ignoring the disintegration of white families. When minorities bring up discrimination and other issues of race, white political pundits refer to it as “playing the race card.” They would like us to believe that racism no longer exists. (Of course, it doesn’t for them.)

Most disturbing is the fact that the conservative majority of the United States Supreme Court has voted to weaken the Voting Rights Act and to undermine affirmative action.

On the anniversary of Martin Luther King’s iconic “I Have A Dream” speech, we should all take a moment to celebrate how far we’ve come. But only a moment. It’s time to get back to work to make sure the pendulum swings in the right direction again.

What Is Our Real Legacy For Future Generations?

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Much has been written about the national debt that is being left to future generations; how that debt is the greatest threat to the future of our nation.

I beg to differ.

Not that the debt isn’t a serious issue, but our nation faces many more daunting problems. For example, our infrastructure is crumbling.  Roads and bridges are in disrepair. Our electric grid is woefully inefficient and unreliable – approximately half of all the electricity generated is lost in the grid. Our rail system is antiquated. Ports and canals need to be expanded and remodeled. And our computer systems are increasingly vulnerable to hackers.

In addition, the vast majority of the world’s scientists – real scientists – are sounding alarms about global climate change. Their computer models show that our dependence on burning fossil fuels will raise sea levels by as much as three feet by 2100, drowning some of the world’s largest cities, many of them in the US.

These scientists aren’t politically-motivated. They aren’t beholding to corporations. And they aren’t making unsubstantiated claims. They say that human-caused climate change is as proven as gravity.

Making the investments to address these issues now makes infinite sense. Not only are interest rates at all-time lows. Making changes would create an enormous number of high-paying jobs. And when more people make more money they purchase more and pay more taxes. All of which will help reduce the deficit and debt.

In fact, Nobel laureate economists tell us that such investments will do more to reduce our debt than austerity measures.

So what are we waiting for? Why do we listen to Wall Street-financed politicians instead of economists? Why do we listen to oil-soaked politicians instead of climate scientists? We have been shown a road map to the long-term health of the United States and the globe. These are not Democratic issues or Republican issues. They are human issues.

Isn’t it as important to leave future generations with a safe, efficient infrastructure as with a surplus? Isn’t it as important to bequeath them a sustainable planet as with a reduced debt?

Detroit Is Merely The Canary In The Coal Mine.

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It’s popular for conservatives to blame the bankruptcy of the City of Detroit on a history of Democratic leadership. Indeed, the conservative commentators seem to revel in the city’s troubles. And since Detroit has a high percentage of African-Americans, the problems also conveniently fit their racist narrative.

The wingnuts believe that this simply couldn’t happen to a government run by white conservatives.

Hmmm…What about California? Following a government led by Ronald Reagan and, more recently, Arnold Schwarzenegger, the state was teetering on the abyss. But after a return to Democratic leadership, California is regaining economic health and running surpluses. The same can be said for Minnesota.

Detroit’s problems aren’t merely the fault of city leadership. The state of Michigan has failed to deliver the aid it promised. But the real problems are the result of national and international politics. As part of globalization, greedy corporations shipped Detroit’s manufacturing jobs out of state and out of country in order to avoid paying for employee health care and pensions. In addition, many of the city’s mostly white executives fled to the suburbs leaving the poor and the unemployed to pick up the tab for their excesses.

Given the many factors contributing to the city’s financial problems, it would have been virtually impossible for Detroit to overcome them by itself. Detroit didn’t create the problems on its own. It shouldn’t have to face them alone.

Moreover, Detroit may be just the first large city to declare bankruptcy. Other cities that were once home to large manufacturing plants are facing many of the same difficulties. And, depending on what happens in Detroit, they may follow its lead.

Sadly, the situation in Detroit reminds me of the aftermath of natural disasters. When the Midwest was devastated in the nineties by floods, many on the East Coast objected to paying for disaster relief. Many across the nation objected to paying to help New York City after 9/11. Many objected to the cost of rebuilding New Orleans after Katrina. And congressional representatives and senators from other states voted against funding to New Jersey and New York to pay for relief from Hurricane Sandy.

Far too many Americans lack compassion for their fellow Americans. Instead of looking for ways to help, they are more intent on affixing blame. They assume that they are so smart that such a disaster could never happen to them. Invariably, they are wrong.

How Would You Pay For Uninsured Healthcare?

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Conservatives in Arizona and other states are mouth-frothing mad over the expansion of Medicaid for those who can’t afford health insurance. They claim that it’s a matter of personal responsibility; that the current system is fine; that people should simply go without healthcare if they can’t afford it.

Hmmm…

The people saying that consist mostly of the Bible-thumping, church-going crowd. You know, the good “Christians” who claim to follow the guy who once said something like, “What you do unto the least of these, you do unto me.”

What these people don’t understand, in addition to the Bible they claim to study, is that even people without money deserve healthcare. In fact, our federal government came to that realization years ago. That’s why hospitals are mandated to treat those in need, even if they can’t afford to pay for the treatment. As a result, most of the working poor (people below or near the poverty line are already eligible for Medicaid) delay medical care as long as possible. When their conditions have reached a point where they are more difficult to treat, they go to the Emergency Room where treatment costs many times more than care at a doctor’s office.

Who pays for their treatment? The very people who are whining and bitching about expanding Medicaid to cover more of the working poor. As a result, the whiners pay considerably more than they would if everyone had health insurance…even government-paid health insurance.

So the question is this: How would you like to pay for your brothers’ and sisters’ healthcare? Through the efficiently-run Medicaid system? Or through the many times more expensive E.R.?

Families In Deep Doo-Doo.

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It seems that nearly every week, a new study is released that shows the growing income disparity in the United States. Recently, an Associated Press survey found that 80 percent of adults in the US face near-poverty and unemployment at some point in their lives. Another study by the International Human Rights Clinic at New York University’s School of Law found that 1 in 6 (50 million) Americans face food insecurity, including 17 million children.

Now, the medical journal Pediatrics has published a study measuring the psychological impact on mothers who are unable to afford diapers.

The study, “Diaper Need And Its Impact on Child Health,”  by a group of Yale researchers, found that 30 percent of mothers have struggled to pay for diapers and more than 8 percent of low-income mothers reuse soiled diapers! Not surprisingly, the researchers concluded that the lack of clean diapers “seriously affects maternal stress, child health, and child development.”

So, in the richest nation on Earth, a large percentage of our people can’t tend to the needs of either end of a baby!

We have millions who can’t afford the most basic necessities despite working full-time jobs. We have tens of thousands of homeless – many of them families and veterans. And, instead of passing laws to raise the minimum wage; instead of eliminating tax loopholes that encourage companies to ship manufacturing jobs overseas; instead of passing bills to help create jobs here at home; House Teapublicans plan to cut $40 billion from our food stamp programs over the next 10 years.

It will be difficult since the House has only 9 scheduled work days between now and the end of September, but I’m certain they’ll find a way.

Growth Of The “Moocher” Class.

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During the 2012 presidential election, Mitt Romney was famously caught on camera talking about the 47 percent he claimed pay no taxes. That led to the conservative media referring to the 47 percent as the  “moocher” class; those people whose votes could be bought with promises of free “stuff,” such as food stamps, unemployment insurance and access to healthcare.

According to a new survey exclusive to The Associated Press, Romney had the numbers wrong. The survey shows that 80 percent of adults in the US face near-poverty and unemployment at some point in their lives. You read that correctly…80 percent!

In addition, the latest NBC News/Wall Street Journal poll found that 22 percent of Americans have been significantly affected by the sequester budget cuts. And those who earn less than $30,000 per year have been hardest hit. Moreover, 1 in 6 (50 million) Americans face food insecurity, including 17 million children.

The vast majority of these people work full-time jobs; some work two jobs or more and still can’t make ends meet. Yet conservatives call these people “moochers” and “takers.” Fox News Channel and conservative radio hosts vilify and ridicule the working poor. Instead of placing the blame where it belongs…on greedy corporations and an economy that no longer offers the majority of Americans an opportunity to realize the American Dream…Congressional Teapublicans blame the problem on labor unions, pensions, Social Security, Medicare and Medicaid. They have voted to cut food stamps and unemployment insurance benefits. They have voted 39 times to repeal Obamacare, denying access to healthcare for more than 50 million poor Americans. And, instead of voting to fund projects that would rebuild our infrastructure and create good-paying jobs, they vote to cut taxes for the wealthy.

In the two and a half years since regaining control of the House by promising to focus on jobs, Teapublicans continue to push for budget cuts and to place obstacles in the way of our economic recovery.

As a result of their indifference to the plight of ordinary Americans, our economy continues its slow recovery. We continue to see the loss of good-paying jobs to other countries. We continue to see the loss of pensions and income security for the elderly. And we continue to see a widening gap between the rich and the poor.

Teapublicans are right to talk about the “givers” and “takers” in our society. But they have things backwards. The “givers” are the working people who pay a disproportionate share of their income to taxes, including payroll deductions and sales taxes. And the “takers” are the very wealthy and large corporations who benefit from corporate welfare and record profits.

GOP: 1.6 Million Jobs Don’t Matter.

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There was a story this week that was overshadowed by Anthony Weiner’s penis, San Diego Mayor Filner’s hands-on management style and Congressman Steve King’s idiotic statements on immigrants. It was news that the CBO (Congressional Budget Office) reported that sequestration cuts forced by the Republican-dominated House will prevent the creation of 1.6 million jobs over the next year.

The report came as an answer to Speaker John Boehner’s oft-asked question, “Where are the jobs under the Obama administration?”

Yet the CBO report was met with a resounding yawn by Republican leadership. They are far more interested in preparing for the next debt ceiling crisis and moving to repeal “Obamacare” a few more dozen times. Indeed, Washington insiders claim that jobs are no longer seen as an issue by Republicans because the economy is growing despite their obstruction.

The economy may be growing, but not nearly fast enough. More important, salaries have not grown at all, except for those at the top.

Nevertheless, the Republican majority continues to ignore jobs in favor of cuts to Social Security, Medicare and Medicaid. Since taking control of the House with the promise of creating jobs, Republicans have not presented a single bill that would create jobs or rebuild our failing infrastructure. They have refused to negotiate a budget deal with Democrats. They won’t even create a committee to resolve differences with the Senate budget bill.

Indeed, this Congress is on track to pass the fewest bills in history!

Think about that for a moment. Our population has grown dramatically. Our nation’s problems are far more complex than ever before. Our infrastructure is crumbling. Our electric grid is cobbled together with antiquated technology. Climate change is claiming shoreline at an alarming rate. (Maryland’s Governor O’Malley recently stated that the state is losing 1.6 acres every day.) A large portion of our population doesn’t know where the next meal is coming from. And a growing number of our military veterans are struggling.

The problems are many. But Republican solutions are few and very far between.

Here We Go Again. Another Debt Crisis!

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In 2011, Speaker John Boehner and his GOP cronies nearly sent the US economy into a death spiral by refusing to raise the debt ceiling unless President Obama agreed to severe budget cuts. When the president and other Democrats tried to negotiate a common sense agreement that would not lead to a double dip recession, there was a lengthy stand off. The markets were so shaken that US government bonds were downgraded for the first time in history and large parts of our economy came to a standstill.

The GOP tantrum and resulting hit to our economy was completely unnecessary. President Obama was already in the process of cutting the deficit at a faster rate than any previous president in US history! Indeed, in June, we had a monthly budget surplus for the first time in years. And for the fiscal year ending Sept. 30, the deficit will be the lowest since the financial calamity of 2008 – nearly half the previous year’s deficit.

If President Obama is allowed to continue his policies, we will almost certainly see a full recovery of the US economy and the growth will lead to even less spending and more tax revenue as Middle Americans’ get better jobs and their salaries grow.

But that would expose the fraudulent economic policies of Boehner and his fellow Guardians Of Privilege. And they simply can’t allow that. So, once again, they’re threatening to take our economy hostage. Boehner says that he plans to adhere to the so-called Boehner Rule, demanding one dollar in spending cuts for every dollar increase in the debt ceiling.

This is nothing less than economic suicide for the United States!

The debt ceiling is an arbitrary limit that has no affect on the deficit. It merely limits the Secretary of Treasury’s ability to pay outstanding debts. Failing to raise the debt ceiling in order to pay our debts would turn the US into a nation of deadbeats. It would damage our reputation internationally, and it might well lead to an exodus of investments in US bonds, making it more difficult and costly to fund our national debt; a debt largely created by Republicans.

Even dragging out negotiations over the debt ceiling, as in 2011, will lead to serious consequences. It will make employers and investors nervous enough to hold onto their money. That will lead to a market sell-off and increased unemployment. That, in turn, will lead to increased federal spending and decreased revenues. And that will lead to increased deficits and increased debt…exactly the opposite of what Boehner and his fellow nitwits claim to want!

Similarly, the effect of President Obama agreeing to significant budget cuts on top of those already imposed by sequestration will also severely harm our economy. If you doubt that, just look at what has happened as the result of Europe’s austerity measures.

According to the GAO (Government Accounting Office), the 2011 debt ceiling crisis raised the borrowing costs for the government by $1.3 billion in 2011 and an estimated $18.9 billion over 10 years. And, in case you’ve already forgotten the pain it caused, the debt crisis also caused the Dow Jones Industrial Average to fall 2,000 points in just two months. It damaged our economic recovery. Worse, it cost many people their jobs and negatively affected millions of lives.

By all means, Mr. Boehner, let’s do that again!