Article 43
Tuesday, August 30, 2011
The Next Depression Part 48 - The Worst Is Yet to Come Part 7
Mankind will never see an end of trouble until… lovers of wisdom come to hold political power, or the holders of power… become lovers of wisdom.
- Plato
What’s Going On With The Economy?
By Mike Whitney
August 29, 2011
There’s a very good post over at Mish’s Global Economic Trend Analysis today. ("US in recession right here, right now") Blogger Mike Shedlock makes the case that the economy may already be in recession. It’s all matter of whether if one uses the the consumer price index (CPI) or the the BEA’s measure of price inflation to make their calculations. There’s a fair amount of technical jargon to wade through in the article, but the charts are pretty persuasive and--if nothing else--they reinforce most people’s suspicions that the economy is getting worse by the day.
It’s too bad we don’t have a financial media that’s willing to explain what’s going on in simple terms, but we don’t. Instead, we’re deluged with daily datapoints that have little meaning to the average working slob who just wants to know whether he’s going to have a job tomorrow or if the company he works for is going to pack-it-in and head for Shandong Province.
Monday’s report on consumer spending is a perfect example of how the media distorts the news to create a cheery narrative of “economic recovery”. Here’s a clip from Bloomberg:
“Consumer spending climbed more than forecast in July as Americans dipped into savings to buy cars and cool their homes, showing the biggest part of the economy is holding up.
Purchases rose 0.8 percent, the biggest gain since February, after a 0.1 percent decline the prior month, Commerce Department figures showed today in Washington. The median estimate of 74 economists surveyed by Bloomberg News called for a 0.5 percent increase. Incomes grew 0.3 percent, pushing the savings rate to a four-month low.
Industry data showed autos sold at the fastest pace in three months as supply constraints from Japans March earthquake began to ease, while outlays on services, which includes utilities like electricity and gas, climbed at the fastest pace since December 2009.” (Bloomberg)
Hurrah! The slump is over! The indomitable US consumer has once again hoisted himself off the canvas and stumbled back to the shopping malls and car lots in a selfless effort to keep the global economy plugging along. Does anyone believe this gibberish?
Now, let’s take a more sober approach to the data and see if we can figure out what’s really going on behind the hype. This is an excerpt from a post at Zero Hedge:
“July personal income and expenditures were quite surprising in that while many were expecting the drop in the market to force consumer saving to upshift (lower spending than income), not only was this not true, but expenditures spiked by 1 whole percent from -0.2% to 0.8%, on expectations of 0.5%, even as Personal Income came in line with expectations of 0.3%, up from a revised 0.2% (concurrent with extensive prior data revisions).
This was the biggest difference between a monthly change in income and spending since October 2009. The net result was a plunge in the savings rate from 5.5% to 5.0%. And while on the surface this would be good news, as in Americans are spending again, a quick look at the PCE components indicates that virtually the entire surge is due to a spike in Energy goods and services. In other words, the entire spike in spending was to… pay for gas and associated energy expenses..... All in all: in July Americans continued to max out their credit cards to pay for gas.” ("Personal Saving Rate Plunges From 5.5% To 5.0% As July Energy Expenditures Soar”, Zero Hedge)
Okay, so which article is closer to the truth; Bloomberg or Zero Hedge?
Of course, consumers spent more money than before, but it had nothing to do “feeling flush” or being more optimistic about the future. Hell, no. They were forced to use their credit cards at the gaspump so they could haul their sorry ass to work in the morning. That’s hardly a reason to celebrate.
So, what’s really going on with the economy?
Well, oddly enough, it’s not that hard to explain, and it doesn’t require a Masters in Economics to grasp the main points.
To begin with, let’s state the obvious: We’re in a Depression. Yes, that’s a “judgement call”, but for 90 percent of working people in this country, the word accurately describes the slump we’re in.
Second, the political process is broken. Again, this fact is so obvious that it’s hardly worth mentioning. The vast majority of people are thoroughly disgusted with the craven Wall Street duopoloy that masquerades as “representative government”. “Representative” of who? Corporate fatcats and bank vermin?
“American democracy” is a contradiction in terms; a complete farce. Neither party has any plan for lowering unemployment, correcting chronic trade imbalances, re-regulating the financial system, or growing the economy. Capital Hill is merely an annex of Wall Street, just as the White House is entirely in the clutches of the brandy-swilling swine who run the big brokerage houses and hedge funds. They own it all, every bit of it. America is just one of many properties in their sordid portfolio.
Okay, enough ranting. Now onto the facts.
US households are still underwater 3 full years after Lehman Brothers croaked. They’ve shed a good portion of their debts through default, foreclosure, personal bankruptcy and accelerated repayments, but the situation is still grave. There’s lots more red ink to mop up and now that Obama’s $787 billion fiscal stimulus has run out, it’s going to be lot harder for them to clear their balance sheets.
Why is that?
Because government spending reduces the real value of debt making deleveraging easier. But--as you may have noticed--the government’s share of total spending is actually shrinking. State and local governments are cutting costs and laying off workers as fast as they can--over 500, 000 state workers were fired in the last year and a half alone. It’s a disaster. And the idiot Obama hasn’t lifted a finger to reverse the trend. Instead, he’s taken a sabbatical to Martha’s Vineyard to see if he can shave a few strokes off his golf game. What a terrible president.
Anyway, household debt as a share of annual disposable income is currently 115 percent, down from 135 percent in 2008. Economists believe that the figure will eventually return to its historic range of 75 percent. And, there’s the rub, because if consumers continue to slash spending and increase saving--as they need to do-- then the economy will slow down even more greasing the skids for another vicious downturn.
Consider this: In the peak bubble years of 2003 to 2008 US households withdrew roughly $2.3 trillion from the home equity to spend as they pleased. Ironically, only about 20 percent of that sum was used in home improvements. The rest was used to pay off medical bills, credit card debt and, yes, discretionary spending. (Don’t workers deserve an occasional “night on the town”?) In other words, the housing bubble provided $500 billion in extra consumption per year for 5 years, and it was all borrowed money! (Keep in mind Obama’s stimulus was $800 billion, but that amount was spent over a 2-year period. So the $500 per year siphoned from home equity actually exceeded that of the ARRA.) Now that housing prices are dropping, the home equity ATM has been shut down leaving households mired in debts that will take years to pay off. That means consumption--which traditionally leads the way out of recession--will flag, demand will remain weak, business investment will dwindle, unemployment will stay high, and the economy will continue to drift sideways.
So, what does tell us about the “recovery”?
The recovery was just another public relations fable with no basis in fact. Just look at the trajectory of GDP in the last couple years and you’ll see what I mean: (4Q 2009-3.8%; 1Q 2010--3.9%; 2Q 2010--3.8%; 3Q 2010--2.5%; 4Q 2010--2.3%; 1Q 2011--0.4%, “revised” 2Q 2011---0.9%)
See the difference between the strong growth in 2009 to 2010, and the weak growth thereafter? The numbers coincide perfectly with the injections of stimulus. In other words, No stimulus, no recovery.
So, now that the stimulus has dissipated and the home equity jet-fuel ($500 bil per year) has evaporated, who’s going to spend enough money to keep the economy bobbing along in positive territory?
Big business?
No way. Why would businesses make more products for people who have no money?
Consumers?
Nope. They died in the Crash of ‘08.
The only one who can maintain spending and keep the economy plugging-along while households get their balance sheets together, is the government. But that means more stimulus and bigger deficits, which both party’s oppose. So nothing’s going to get done, right? Oh yeah, there’ll be more pompous pronouncements and political wrangling, but nothing of substance. The payroll tax holiday will end in December, unemployment benefits will get slashed, housing prices will continue to stumble, and ---by election-time--the economy will be in a shambles.
Bottom line: The political process is broken, so the economy’s going to tank. Bet on it.
Section Dying America • Section Next Recession, Next Depression •
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Tuesday, August 23, 2011
Nice Guys
An Outline of The Nice Guy
By Vigil
Captain Cynic
I am going to attempt to define the “Nice Guy” Syndrome in an accurate, truthful sense.
Firstly, I want to define the adjective “nice. “
If I perceive that someone is being nice to me, it means that I believe they are acting with kindness towards me, that they are being genuinely caring and respectful towards my needs and desires in some way.
Therefore, a nice person, is someone who is consistently displaying genuine care towards another. In my opinion, it is pretty much synonymous with being a humane person.
As I understand it, a humane person is someone who can understand that the world is an enclosed, shared environment, and believes it to be in their own self interest that those around them are genuinely happy and healthy, in order to maximize the potential for that environment to be the best that it can possibly be.
Although the main motive may be self interest, it is not self interest in any negative sense, since it is simply acknowledging the fact that because we are all humans, we all share the same base needs.
I am characterizing the “nice guy” as a person whose intentions are genuinely humanistic.
The Nice Guy Syndrome
The “Nice Guy” is someone who acts with humanistic intentions, and is constantly taken advantage of by everyone around him. He is especially vulnerable to those who claim to love and care for him, because of his own belief that this is truly the case.
He is constantly lead on by people whom he wants to pursue a meaningful, loving relationship with. A person who is using the Nice Guy will be consistently sending him signals that they are interested in him, value him, want him to be committed to them, but in truth, has no actual intention of reciprocating any of the love that the Nice Guy gives to them.
The Nice Guy sees his loved ones as, more or less, extensions of himself, so he puts great effort into the relationship because he believes that the other persons happiness and well being is connected to his own. This feeling is never truly reciprocated by people who only mean to take advantage of the Nice Guy’s offerings, only feigned.
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A man who has rejected the societal notion of masculinity and chosen to define himself from the inside out instead, realising that traits such as empathy and nuturing are not actually limited to the female of the species, and nor are aggression and assertiveness limited to the male.
Despite this newfound revelation, however, there is still a strong genetic predisposition for humans to continuously behave as if we were animals seeking out the alpha male with those genes most suited for surviving in a hostile environment.
Often times, the average woman, whom society encourages to indulge in her weaknesses and surpress her strengths, is a self-loathing masochist who may appreciate the nice guy’s friendship and understanding, but feels no attraction toward him because his insecurities remind her of why she hates herself. Therefore, she almost always seeks the dominant, aggressive, unempathic male with whom she can vicariously live to make up for her weaknesses. Of course, this inidividual, commonly known as a jerk, is also usually an egotistical, disloyal, and shallow person for whom societal dictates of masculinity will force him to disregard his mate’s feelings and treat her as if she were beneath him.
Feeling emotionally unsatisfied, the female will then turn to her nice guy friend, whom she has long since castrated, for comfort, and complain to him about how men suck, except for him, and that he deserves a good girlfriend eventually except that it is never her or any other woman he might encounter.
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Another from Urban Dictionary
A young male who will give up countless hours of his time listening to the problems of his very attractive female friends because they need someone to talk to about their apathetic, Baywatch jock of a boyfriend because no one else will listen or genuinely care. Although always surrounded by beautiful girls the nice guy cant get a girlfriend or even facilitate the alleviation of certain drives because his ordinary physical appearance will forever be compared to the Baywatch beach bums. The nice guy would never capitalize on a vulnerable girl, objectify or cheat on a girl, he will go out of his way and bend over backwards to help his friends and will never ask for anything in return but no matter how intelligent, understanding, humorous, compassionate, trusting or loyal the nice guy is the female cohort will always pass him up and endure any length of abuse, objectification, apathy and cold-heartedness from a man if he has physical attractiveness, fashion, big muscles and chiseled facial features.
The nice guy will eventually realize that his dependability and empathy will never be appreciated and all his friendships with females are all one-sided. This coupled with years of watching girls go for tanned, muscular jerk-offs with nice cars while he desperately hopes someone will realize that how viable he actually is will spawn and incubate the nice guys insecurities and he will eventually abandon his views, dumb-down his speech, take-up weight-lifting and switch majors from cancer research with a minor in theoretical physics to playground management so he can devote his time to emulating Baywatch characters and football players so that he will one day be viewed as more than a nice guy.
The nice guy will eventually work up the courage to ask out his attractive female friend but will invariably be turned down because she’s so self-centered that shed never actually had a smidgeon of compassion for the nice guy’s feelings or even realized that hes interested in girls. After rejecting the nice guy, the girl will downplay the supposed friendship to the point where they never speak again, which in turn will make the nice guy depressed (ironically, he won’t have anyone to talk to) because hes devoted so much time and energy and has become so warped from being exposed to these kinds of people that he will either live the rest of his life alone in a tiny apartment, jerking off to old Saved by the Bell episodes or get drunk one night and impregnate a 300-pound, cross-eyed derelict who works at Wendy’s and spend the rest of his life being treated like shit.
The whole “nice guy” phenomenon really supports the idea that people primarily care about physical appearances and that shrewdness, selfishness and narcissism will always triumph over compassion, rapport and inner beauty.
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Mr. Nice Guy: When He is “Too” Nice
By Jennifer Searle
June 3, 2007
The problem isn’t so much with the nice part; it is with the “too” part. The “too” part is where it goes from great to phony.
I hate to stereotype guys into one classification or another, but there is definitely a type of guy who is “too nice.” Generally this guy will cling onto like a pair of leather pants. “You” and “he” becomes “we” after two dates. After a few months of this you start to feel smothered by this man and feel the need to jump ship before you drown.
There is another type of “too nice” guy, and he is actually a jerk in sheep’s clothing. He tells you stories of how nice he is. He tries to give you the impression that he is a great guy, but just under the surface is an insecure jerk waiting to pop out and get you. This type of guy lures you in with his niceness, and then once he thinks he has to, the jerk starts to come out. He might be what is classified as abusive, usually only emotionally. This is because he is a control freak. He has no sense of communication skills, he over reacts to everything, he needs to be in control and always right. He will probably start off slowly so that you won’t even notice that the niceness has faded. Somewhere between three months to six months his true colors start to come through.
Both of these men suffer from insecurity and low self esteem. The first guy is trying to control you and basically badger you into a relationship with him. The second guy lands you with his nice appearance, but then turns into a nightmare shortly after he thinks he has you love. It is almost as if he finally feels free to be who he really is, and stop putting on the act for you.
If you end up with either of these guys you should run, run far away. Change you phone number and move! A genuinely nice guy will never tell you that he is a “nice guy”. A genuinely nice guy shows you he is nice and never does it to win you over, but does it because he does it for everyone. The best way to know what kind of guy it is that you are dating is to observe him around other people. Is he argumentative? Does he say little things that seem a tad off, or mean? Does he make comments about people behind their back and act nice to their face? Does he seem nice to others when he wants something, but he is never there for them when he does not benefit? Watch the signs in this man, if you see anything that might make a little red flag go up, beware. You might have a fake nice guy on your hands. Don’t bother trying to fix him, because you can’t, just break up with him as soon as possible.
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Why “Nice Guys” are often such LOSERS
Heartless Bitches International
You hear it all the time: “He was such a NICE Guy, and she’s such a Heartless Bitch for dumping him.”
I get letters from self-professed Nice Guys, complaining that women must WANT to be treated like shit, because THEY, the “Nice Guy” have failed repeatedly in relationships. This is akin to the false logic that “Whales are mammals. Whales live in the sea. Therefore, all mammals live in the sea.”
If you have one bad relationship after another, the only common denominator is YOU. Think about it.
What’s wrong with Nice Guys? The biggest problem is that most Nice Guys (tm) are hideously insecure. They are so anxious to be liked and loved that they do things for other people to gain acceptance and attention, rather than for the simply pleasure of giving. You never know if a Nice Guy really likes you for who you are, or if he has glommed onto you out of desperation because you actually paid some kind of attention to him.
Nice Guys exude insecurity—a big red target for the predators of the world. There are women out there who are “users”—just looking for a sucker to take advantage of. Users home-in on “Nice Guys”, stroke their egos, take them for a ride, add a notch to their belts, and move on. It’s no wonder so many Nice Guys complain about women being horrible, when the so often the kind of woman that gets attracted to them is the lowest form of life…
Self-confident, caring, decent-hearted women find “Nice Guys” to be too clingy, self-abasing, and insecure.
Nice Guys go overboard. They bring roses to a “lets get together for coffee” date. They try to buy her affections with presents and fancy things. They think they know about romance, but their timing is all wrong, and they either come-on too strong, too hard and too fast, OR, they are so shy and unassertive, that they hang around pretending to be “friends”, in the hope that somehow, someway, they will get the courage up to ask her out for a “date”.
They are so desperate to please that they put aside their own needs, and place the object of their desire on a pedestal. Instead of appreciating her, they worship her. We are only human, and pedestals are narrow, confining places to be—not to mention the fact that we tend to fall off of them.
They cling to her, and want to be “one” with her for fear that if she is out of sight, she may disappear or become attracted to someone else. A Nice Guy often has trouble with emotional intimacy, because he believes that if she learns about the REAL person inside, she will no longer love him.
Nice Guys are always asking HER to make the decisions. They think it’s being equitable, but it puts an unfair burden of responsibility on her, and gives him the opportunity to blame her if the decision was an unwise one.
Nice Guys rarely speak up when something bothers them, and rarely state clearly what it is they want, need and expect. They fear that any kind of conflict might spell the end of the relationship. Instead of comprimising and negotiating, they repeatedly “give in”. When she doesn’t appreciate their sacrifice, they will complain that, “Everything I did, I did for her.”, as if this somehow elevates them to the status of martyrs. A woman doesn’t want a martyr. She wants an equal, caring, adult partner.
Nice Guys think that they will never meet anyone as special as she is. They use their adoration as a foundation for claiming that “no one will ever love her as much as I do.” Instead of being a profound statement of their devotion, this is a subtle, but nasty insult. It is akin to saying to her: “You are a difficult person, and only *I* can ever truly love you, so be thankful I’m here.”
The nice guy -needs- to believe that he is the best person for the object of his desires, because otherwise his insecurities will overrun him with jealousies and fear. The truth of the matter is that there are many people out there who can be a good match for her. We rarely stop loving people we truly care about. Even if we no longer continue the relationship, the feelings will continue… But love isn’t mutually exclusive. We can (and do) love many people in our lives, and romantic love is really no different. Though he may love her immensely, there will likely be other people who have loved her just as much in her past, and will love her just as much in the future. The irony of it all is: “Who would want to go out with someone who was inherintly unlovable anyways?”
More than loving the woman in his life, a Nice Guy NEEDS her. “She is my Life, my only source of happiness...” YECH! What kind of a burden is that to place on her? That SHE has to be responsible for YOUR happiness? Get a grip!
Another mistake Nice Guys make is to go after “hard luck” cases. They deliberately pick women with neuroses, problems, and personality disorders, because Nice Guys are “helpers”. A Nice Guy thinks that by “helping” this woman, it will make him a better, more lovable person. He thinks it will give him a sense of accomplishment, and that she will appreciate and love him more, for all his efforts and sacrifice. He is usually disappointed by the results.
This ultimately boils down to the fact that Nice Guys don’t like themselves. Is it any wonder women don’t like them? In order to truly love someone else, you must first love yourself. Too often Nice Guys mistake obsession for “love”.
Get this Guys: INSECURITY ISN’T SEXY. IT’S A TURNOFF.
You don’t have to be an ego-inflated, arrogant jerk. You just have to LIKE yourself. You have to know what you want out of life, and go after it. Only then will you be attractive to the kind of woman with whom a long-term relationship is possible.
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Nice Guy Syndrome: The Plight of the Corporate Martyr
By Russ Edelman
Huffington Post
July 31, 2008
Most of us know them. They are the well-liked co-workers who continuously put the job and their co-workers in front of their own needs. They fall on their swords to help others out, regardless of whether they will survive the ‘battle’ or sustain ‘injury’. They do it in the name of friendship and loyalty to their companies. At first glance, they could be lauded as the “corporate hero”; however, all too often they end up as the “corporate martyr”. Why? Because, in this guy’s opinion, they are overly nice.
Real Case In Point - Eric was a brilliant technical architect who was participating on a proposal team for a huge deal. Prior to “The Big Presentation”, he came up with a brilliant idea. He would print out a giant diagram of the system design, which could then be proudly displayed during the presentation and left as a prominent artifact for the prospect. To do so, Eric ran down to the local Kinko’s to print out the drawing on their large format printer. Upon arriving, he found that the printer was broken. They recommended that he could drive 10 miles to the next Kinko’s to use their functioning printer. Not Eric. As a self-admitted overly nice guy, he ended up working through the night at Kinko’s to help them fix their printer. While he succeeded in repairing the printer, he was completely spent for the presentation the following morning and for several days thereafter. Corporate Martyr; yes or no?
Actions like Eric’s are not uncommon in the business world, as workers aim to please their managers, co-workers, customers, suppliers and peers. However, when these efforts become so SELF-SACRIFICING, a real cost emerges as the overly nice guys kill themselves in the pursuit of making others happy. In Eric’s case, it would have been more prudent of him to go to another Kinko’s, print out the drawing, get a good night’s sleep, and then participate in the presentation in a meaningful (and lucid) way. If he still felt it appropriate to lend a hand to Kinko’s, he could do so after the presentation or on his own time.
Overly nice guys don’t establish reasonable boundaries in this respect and it ends up hurting them as well as their organizations. In this regard, business managers should be on the watch for acts of corporate martyrdom. If overly nice guys demonstrate such over-the-top behavior, the boss can set guidelines to help protect against too much self-sacrifice. To aid in this effort, steps can be taken such as defining thresholds, which may be caused by corporate martyrdom. For example, in Eric’s case, the team leader might define very specific boundaries regarding how intense the team members get when trying to “wow” clients. In professions that work in billable hours (like law), companies can impose limits to prevent workers from overextending themselves and burning out. Every company and its managers need to identify what types of boundaries need to be defined to help out the overly nice guys within their organization.
Overly nice guys represent a substantial percentage of the work force. In fact, 61% of the people surveyed for our book, “Nice Guys Can Get The Corner Office”, indicated they are too nice at work. By implementing some important adjustments, you can help overly nice guys become effectively nice and convert from corporate martyrs to corporate heroes!
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Sunday, August 21, 2011
Bad Moon Rising Part 43 - Ready To Blow
We’ve been warned: the system is ready to blow
Only a new way of managing the global economy can prevent more mayhem in the markets and on the streets
By Larry Elliott
The Gaurdian
August 14, 2011
There were glimmers of hope amid last week’s despair. Neighbourhoods rallied round in the face of the looting. The Muslim community in Birmingham showed incredible dignity after three young men were mown down by a car and killed during the riots. It was chastening to see consumerism laid bare. We have seen the future and we know it sucks. All of which is cause for cautious optimism provided the right lessons are drawn.
For the past two centuries and more, life in Britain has been governed by a simple concept: tomorrow will be better than today. Black August has given us a glimpse of a dystopia, one in which the financial markets buckle and the cities burn. Like Scrooge, we have been shown what might be to come unless we change our ways.
Lesson number one is that the financial and social causes are linked. Lesson number two is that what links the City banker and the looter is the lack of restraint, the absence of boundaries to bad behaviour. Lesson number three is that we ignore this at our peril.
To understand the mess we are in, it’s important to know how we got here. Today marks the 40th anniversary of Richard Nixon’s announcement that America was suspending the convertibility of the dollar into gold at $35 an ounce. Speculative attacks on the dollar had begun in the late 1960s as concerns mounted over America’s rising trade deficit and the cost of the Vietnam war. Other countries were increasingly reluctant to take dollars in payment and demanded gold instead. Nixon called time on the Bretton Woods system of fixed but adjustable exchange rates, under which countries could use capital controls in order to stimulate their economies without fear of a run on their currency. It was also an era in which protectionist measures were used quite liberally: Nixon announced on 15 August 1971 that he was imposing a 10% tax on all imports into the US.
Four decades on, it is hard not to feel nostalgia for the Bretton Woods system. Imperfect though it was, it acted as an anchor for the global economy for more than a quarter of a century, and allowed individual countries to pursue full employment policies. It was a period devoid of systemic financial crises.
Utter mess
There have been big structural changes in the way the global economy has been managed since 1971, none of them especially beneficial. The fixed exchange rate system has been replaced by a hybrid system in which some currencies are pegged and others float. The currencies in the eurozone, for example, are fixed against each other, but the euro floats against the dollar, the pound and the Swiss franc. The Hong Kong dollar is tied to the US dollar, while Beijing has operated a system under which the yuan is allowed to appreciate against the greenback but at a rate much slower than economic fundamentals would suggest.
The system is an utter mess, particularly since almost every country in the world is now seeking to manipulate its currency downwards in order to make exports cheaper and imports dearer. This is clearly not possible. Sir Mervyn King noted last week that the solution to the crisis involved China and Germany reflating their economies so that debtor nations like the US and Britain could export more. Progress on that front has been painfully slow, and will remain so while the global currency system remains so dysfunctional. The solution is either a fully floating system under which countries stop manipulating their currencies or an attempt to recreate a new fixed exchange rate system using a basket of world currencies as its anchor.
The break-up of the Bretton Woods system paved the way for the liberalisation of financial markets. This began in the 1970s and picked up speed in the 1980s. Exchange controls were lifted and formal restrictions on credit abandoned. Policymakers were left with only one blunt instrument to control the availability of credit: interest rates.
For a while in the late 1980s, the easy availability of money provided the illusion of wealth but there was a shift from a debt-averse world where financial crises were virtually unknown to a debt-sodden world constantly teetering on the brink of banking armageddon.
Currency markets lost their anchor in 1971 when the US suspended dollar convertibility. Over the years, financial markets have lost their moral anchor, engaging not just in reckless but fraudulent behaviour. According to the US economist James Galbraith, increased complexity was the cover for blatant and widespread wrongdoing.
Looking back at the sub-prime mortgage scandal, in which millions of Americans were mis-sold home loans, Galbraith says there has been a complete breakdown in trust that is impairing the hopes of economic recovery.
“There was a private vocabulary, well-known in the industry, covering these loans and related financial products: liars’ loans, Ninja loans (the borrowers had no income, no job or assets), neutron loans (loans that would explode, destroying the people but leaving the buildings intact), toxic waste (the residue of the securitisation process). I suggest that this tells you that those who sold these products knew or suspected that their line of work was not 100% honest. Think of the restaurant where the staff refers to the food as scum, sludge and sewage.”
Finally, there has been a big change in the way that the spoils of economic success have been divvied up. Back when Nixon was berating the speculators attacking the dollar peg, there was an implicit social contract under which the individual was guaranteed a job and a decent wage that rose as the economy grew. The fruits of growth were shared with employers, and taxes were recycled into schools, health care and pensions. In return, individuals obeyed the law and encouraged their children to do the same. The assumption was that each generation would have a better life than the last.
This implicit social contract has broken down. Growth is less rapid than it was 40 years ago, and the gains have disproportionately gone to companies and the very rich. In the UK, the professional middle classes, particularly in the southeast, are doing fine, but below them in the income scale are people who have become more dependent on debt as their real incomes have stagnated. Next are the people on minimum wage jobs, which have to be topped up by tax credits so they can make ends meet. At the very bottom of the pile are those who are without work, many of them second and third generation unemployed.
Deep trouble
A crisis that has been four decades in the making will not be solved overnight. It will be difficult to recast the global monetary system to ensure that the next few years see gradual recovery rather than depression. Wall Street and the City will resist all attempts at clipping their wings. There is strong ideological resistance to the policies that make decent wages in a full employment economy feasible: capital controls, allowing strong trade unions, wage subsidies, and protectionism.
But this is a fork in the road. History suggests there is no iron law of progress and there have been periods when things have got worse not better. Together, the global imbalances, the manic-depressive behaviour of stock markets, the venality of the financial sector, the growing gulf between rich and poor, the high levels of unemployment, the naked consumerism and the riots are telling us something.
This is a system in deep trouble and it is waiting to blow.
Bad Moon Rising
Part 1 - Part 2 - Part 3 - Part 4 - Part 5
Part 6 - Part 7 - Part 8 - Part 9 - Part 10
Part 11 - Part 12 - Part 13 - Part 14 - Part 15
Part 16 - Part 17 - Part 18 - Part 19 - Part 20
Part 21 - Part 22 - Part 23 - Part 24 - Part 25
Part 26 - Part 27 - Part 28 - Part 29 - Part 30
Part 31 - Part 32 - Part 33 - Part 34 - Part 35
Part 36 - Part 37 - Part 38 - Part 39 - Part 40
Part 41 - Part 42 - Part 43 - Part 44 - Part 45
Part 46 - Part 47 - Part 48 - Part 49 - Part 50
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Thursday, August 11, 2011
Three Steps To That Next Job
Get out your rose-colored glasses for this one…
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“Reinvention expert” guarantees job in 30 days
By Thelma Gutierrez and Stan Wilson
CNN
August 11, 2011
During the California housing boom a few years ago, mortgage broker Ernie Casillas was living the American dream.
The 48-year-old father of one earned a solid middle-class income and built a diversified retirement portfolio.
Then the housing market collapsed in 2008, and Casillas soon found himself on the brink of financial ruin.
He lost his job, his home and eventually his marriage. He is one of more than 2 million Californians without work.
Casillas has tried to broaden his employment prospects by reinventing himself. He returned to school to train in information technology.
He soon discovered that in the fiercely competitive world of IT, few high-tech companies were willing to take a chance on an entry-level technician.
Casillas then tried his hand at jewelry making and discovered he was pretty good at it. He sells his wares at a local farmer’s market and swap meet, but it’s hardly a living.
He also volunteers at a local YMCA as a youth counselor in hopes of landing a permanent job—but so far, no offers.
Desperate for work, Casillas eventually posted his resume on Craigslist.
Reinvention tips
Explore your skills: Ask friends and family about all your abilities, even those that don’t fit your current job description. Make a list of those skills.
Get support: During a job search, you need to be part of a positive group. Get and give support as part of a team. It is best to go outside your family.
Be accountable: Tell someone your goals. Check in with them daily, if possible.
Research: Before an interview, research not just the company but its competitors. Go into your interview more educated about the industry than any other applicant.
Source: Motivational speaker Eli Davidson
“It took a lot for me to put that ad on Craigslist, because I had to change what I was before,” he said. “I wasn’t this rich little yuppie anymore, driving expensive cars, having expensive suits. I’m in this just like everybody else looking for work. It humbles you.”
As one of more than 14 million Americans who are are out of work and three years into his job hunt, Casillas says he’s willing to try anything to turn his luck around.
Enter Eli Davidson, a self-described “reinvention expert,” who says she can coach Casillas into a job within 30 days.
“Ernie, if you do what I say and do your homework, I guarantee you—you will find a great job,” Davidson tells him in the dining room of the south Los Angeles home that Casillas shares with his mother.
Davidson—a motivational speaker and author of “Funky to Fabulous,” which is billed as “surefire success strategies for the savvy, sassy, and swamped”—preaches personal empowerment.
She now runs a successful life coaching business designed to teach others how to turn their lives around.
After overcoming her own hardships—a failed business and marriage—Davidson says she reinvented herself out of necessity.
She usually charges $1,000 and up for a series of group sessions, but she agreed to work with Casillas for no charge because of his dire financial situation.
Step one: Personal transformation
When people have been out of work for as long as Casillas, they need to overhaul their self-perception, according to Davidson.
Casillas breaks down, thinking of the past three years.
“Even personal friends at work, high school friends have shut the doors,” he says, his voice cracking through tears. “They think because I don’t have a job, I’m going to ask for money. ... It’s not that. I just need support.”
Davidson tells him she will teach him “to spot the green”—the opportunities around him—instead of focusing on mental roadblocks that may have held him down.
“The first step for Ernie is he’s going to get some inner tools by getting inspired and ignore what the outer world is telling him like, ‘You can’t, it’s impossible, no way, it’s never going to work,’ “ Davidson says during a motivational session.
For the next month, she tells Casillas, “You’re going on a diet of all the naysayers in your life—all those people who make you feel bad you didn’t get a job.”
Glancing over at his mother, Casillas jokes, “I’m not having any barbecues with my family. No more barbecues!”
Step two: Networking
Networking is a crucial tool that job seekers tend to overlook, according to Davidson. More than 80% of people who are finding employment were successful because of their networking skills, she says.
Davidson then asks Casillas, “Are you actively looking for a job on LinkedIn?”
“No, because most of the people there are engineers, (or have) bachelor’s degrees, MBAs,” he responds. “Here comes a guy who has 20 years of banking experience who’s going into tech support; I didn’t think I would measure up.”
Wrong response, Davidson says.
“Did you see where Ernie’s perceptive filter kept him from seeing the No. 1 way this man is going to get a job?” she asks.
“ ‘I’m looking for an opportunity’ is the phrase he is going to need to use.”
Davidson instructs Casillas to build a strong online profile and to start networking on sites such as LinkedIn and Twitter.
She tells him to make five professional connections a day.
Step three: The resume
Even though Casillas says he has sent out piles of paper resumes, Davidson says that’s “like playing an 8-track.”
She tells Casillas to “think out of the box” and distinguish himself. She suggests offering a prospective employer a solution to a problem he has identified, or blogging about an employer for whom he’d like to work.
Until Casillas finds someone willing to give him an opportunity, his only source of income is an unemployment check.
He says he worries the money will soon run out unless Congress approves an extension of benefits. Despite the competition for jobs and high unemployment across most of the country, Davidson says she is optimistic about Casillas’ job prospects. “I know you will find a job,” she tells him.
And we’ll be checking back with Casillas to see where he’s at in a month.
Section Dealing with Layoff •
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Monday, August 08, 2011
Verizon Strike 2011
Almost half the workers in Verizon Communications’ wireline telecommunications business went on strike on Sunday as negotiations for a new labor contract failed.
The strike, involving 45,000 workers, is the first walk-out that Verizon, one of the two big U.S. telephone network operators, has faced since 2000, when about 80,000 workers went on strike for about three weeks.
Both sides could lose in Verizon strike
By Scott Woolley
August 8, 2011
The union representing the 45,000 Verizon Communications’ (VZ) employees who went on strike yesterday says that the company is using “Wisconsin-style tactics” in an effort “to strip away 50 years of collective bargaining gains for middle class workers and their families.” The striking workers also made a point of highlighting the hefty $6 billion in profit they estimate Verizon will make this year as well as the $10 billion check the company just agreed to writeto Vodafone (VOD). If it weren’t so greedy, a well-off company like Verizon could obviously afford to maintain current worker benefits, the union argues.
Unfortunately for the union—and for Verizon shareholders—things aren’t that simple.
Only one side of Verizon’s business is booming, the wireless arm of the company that is staffed by non-union employees. Of the $9.6 billion in operating income Verizon recorded in the first half of 2011, 94% of it came from its wireless business, according to the company’s SEC filings.
In the other part of Verizon’s business, selling local phone lines and other types of “wireline” service, things look far more grim. Five years ago, the company had 47 million local phone lines in service. As customers have cut off landline service in droves—30% of American homes are now wireless-only—that business imploded. Verizon now has 25 million local phone lines in service and is losing another 8% every year.
To keep pace with the shrinking landline market, Verizon has had little choice but to steadily slash its payroll. Five years ago, it employed 252,000. Now its payroll is down to 196,000.
Much like the large car companies in Detroit, the big local telephone companies first negotiated pension deals and health care benefits with their union members decades ago. For Verizon, those costs have proven far larger than originally estimated, haunting it.
Over the past 10 years Verizon has booked at least one type of “special” charge to cover retiree costs every single year. (Last year Verizon paid $1 billion in severance to coax another 11,900 union members to retire.) Verizon’s total bill for the decade’s worth of severance costs comes to a whopping $18 billion, according to an analysis by Craig Moffett of Sanford Bernstein & Co.
“These charges...are classified as ‘special’ items that are ignored by most investors,” Moffett points out. Include them and suddenly the thin profit margin in Verizon’s wireline business disappears altogether. (The wireline business also got a big boost from Verizon’s “FIOS” network that replaced copper phones lines with fiber optic cables. Without that huge investment, the wireline segment would be shrinking fast.)
Retirement costs seem certain to continue to drain money from Verizon, perhaps even faster than before. One looming problem: underfunded pensions. The same low interest rates that make Verizon’s 5.5% dividend yield so tempting to its shareholders lower returns on Verizon’s pension investments. Union members are going to look to shareholders to make up the difference.
The gradual obsolecence of the phone network is going to be brutal for both Verizon and unions representing communications workers. Neither side can do anything to halt the march of technology, which is inexorably replacing old landlines with cell phones and calling services like Skype (which is in the process of being bought by MSFT). All they can do is try and stick the other guy with a bigger share of the inevitable pain.
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Verizon strike to end with bargaining pact
About 45,000 Verizon Communications employees are set to end a two-week strike and return to work by Tuesday after the telephone company and unions said they had reached an agreement to proceed with bargaining
By Sinead Carew
CIO
August 21, 2011
About 45,000 Verizon Communications employees are set end a two-week strike and return to work by Tuesday after the telephone company and unions said they had reached an agreement to proceed with bargaining.
Almost half of the workers in Verizon’s wireline business went on strike on Aug. 7 after talks for a new labor pact failed when their contract expired.
Under the latest agreement, reached early on Saturday morning, Verizon promised to extend the terms of the old contract indefinitely while it continues bargaining for a new one with unions representing technicians and customer service workers.
As a result workers will start to head back to work for late shifts on Monday night and the rest of the striking workers will show up to their jobs on Tuesday, one union said.
Neither side would provide details about how the agreement was reached.
“Clearly its a difficult time to be on strike with the world economy as it is,” said Verizon spokesman Richard Young. “Both sides agree that the best course at this time is to bring employees back to work.”
Tens of thousands of Verizon managers were asked to work 12 hours a day for six days a week and many worked more than that to cover for the strikers, Young said.
The decision follows an announcement by the company last week that healthcare benefits would expire on Aug. 31 for workers that were still on strike at the time.
This would have affected 35,000 workers represented by the Communications Workers of America, and another 10,000 members of The International Brotherhood of Electrical Workers in nine states and the District of Columbia.
Bitter Dispute
The decision to end the strike came after the unions and the company were able to agree on a structure and focus for bargaining on key issues such as jobs, employment security and financial issues such as healthcare contributions and pensions, according to CWA President Larry Cohen.
Cohen told Reuters that the issues on the table are complicated and will “take some time” to work out but he said the union was looking forward to the joint process.
“We would both say that this focus is much better than it was two weeks ago,” Cohen said.
The striking workers are in Verizon’s wireline business which provides telephone, Internet and television services.
Verizon is looking to cut costs in this business, which has been declining for years as consumers have been hanging up home phones in favor of cellphones and Internet services.
But the unions had argued that Verizon was looking for too many concessions in areas such as healthcare contributions, pensions and work rules.
Verizon, which had drafted in thousands of managers to cover for the striking workers in the last two weeks, said it had made headway with negotiating a “number of local and regional” issues with the unions.
The dispute turned bitter very quickly as Verizon complained of network sabotage on the second day of the strike while the unions said picketers had been injured by vehicles driven by Verizon managers covering for the strikers.
Both sides also swapped complaints at the National Labor Relations Board.
Cohen said the problems facing the strikers went beyond Verizon and its workers. He argued that there should be some kind of national framework for workers healthcare and bargaining rights.
“I don’t really blame Verizon leadership for this problem,” he said. “It’s the nation.”
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Everyone should be proud of the CWA and the IBEW workers who organized one of the most important and successful strikes in recent memory. Let’s get the facts straight: On the eve of the strike, Verizon announced it would pay a special $10 billion dividend to shareholders. At the same time, its negotiators were pushing for $1 billion in concessions from workers. The company has made $3 billion already this year, and nearly $20 billion in the last four years.
So Verizon, which has been insanely profitable in recent years, decided to reward it’s hardworking employees by attempting to slash their health care benefits, freeze their pensions, denie new hires pensions and health care benefits and by attempting to prevent new hires from organizing in unions. All the while Verizon has been outsourcing more and more positions to firms overseas. Scabs struck 15 picketers during the two week strike. And FOX news, the likely source of this so called “summary”, has been demonizing the hard working union members 24/7. While Verizon shareholders are swimming in the dough and Verizon execs laugh all the way to the bank.
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Once upon a time, people looked at union worker’s higher pay rates and benefits and said, “I want the same for my family.” Thus, the modern middle class was born, and the gap between rich and poor was narrowed to the smallest in American hisotry.
Today, people say, “why should those union guys have it so good? I want them to suffer just like me!” And now the middle class has turned against itself, and the gap widens to historic levels. I hope it’ll turn back around some day, but our corporate masters have gotten really good at turning us against ourselves, and at labor unions that exist to help us.
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I realize the company is free to do what they wish, I’m just arguing that it is a massive dick move. On a side note, I am sick and tired of individuals such as your self demonizing the hard working men and women of this nation.
I know this is hard for a libertarian such as yourself to understand, but just try to put yourself in the shoes of someone like this.
You work everyday. You work hard. Your performance review is stellar. The company is massively profitable. This makes you happy, as it is your contribution put to fruition. High fives all around.
The executives take a pay raise for outstanding leadership. The investors get a huge dividend. You get a pay cut. Tell me, are you going to work hard next year, or just coast along doing the bare minimum so as to cling to your shitty job?
Because I’ve been there. I’ve been in a position for 4 years, stellar reviews every year, never a pay raise. It means I was taking a pay cut each year as the cost of living increased. The company was making billions every year. Health insurance premiums kept increasing, taking more out of my take home paycheck. Had I been unionized, I may have been in a better spot to get justly compensated. Nevertheless, I handled it myself. I went into my boss’s office and asked for a raise. When I was denied, I turned in my two weeks.
[SAME HERE brother .ed}
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As an individual investor, I would very much rather invest in companies that DON’T TREAT their employees like CATTLE. Good salaries and benefits means HAPPY EMPLOYEES who are proud of their job and do their duties well. It also means long-term LOYALTY and commitment from the workforce. It may not look as good on the quarterly statement, but it shows that company is considering longer perspective - the ones that chase numbers from quarter to quarter are the ones with stock that can fall just as rapidly as it rises.
Section American Solidarity •
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