Friday, August 31, 2012

Labor Day has come around once again with its familiar speeches about the freedom and good fortune of American labor.
Labor, in our system, is a commodity. That is a long word to indicate that labor is bought and sold and that the price of labor – the workers' wages – depend on supply and demand. There is little demand for workers who never finished high school. Their wages are low. Highly skilled brain surgeons, on the other hand, are in high demand and earn a great deal of money.
All this is familiar. It strikes many people as a fine way of assigning jobs to people, of deciding what sorts of training young people need, and how much anyone should get paid. A person, as it were, rents himself or herself out for eight hours a day. After that their time is their own to do with as they like. The market in labor is no different from the market in hamburgers or in toilet paper.
But consider this story. An older man I met recently works for a manufacturing company as an attorney dealing with inventors whose inventions this company turns into machines. Some companies will pay a small sum every time the invention is used. His company, he told me, pays the inventor a small lump sum and nothing after that. He regards that as immoral but has to do what his employer demands of him. In order to keep his, admittedly well-paying, job he has to compromise his moral convictions. Selling his skills and ability to work has serious implications far beyond the workday. He is selling something of himself.
But he could of course look for a different job, many people will say. But think about that for a moment. He has lived in the same town with his wife for 50 years. They have many friends whom they encountered when they were young, with whom they shared the joys and sorrows of the intervening 50 years, of raising children and welcoming grandchildren, and growing old gradually. Were he to move somewhere else, to work for a different company, his life and that of his wife would also be very seriously disrupted.
He is not just renting out eight hours of his day to his employer. By signing an employment contract he allows the employer enormous power to damage his self-esteem as a moral person or to disrupt his life by forcing him to move elsewhere and to interrupt lifetime friendships.
The employment contract is not an innocent transaction but has a major effect on one's whole life and on one's person. Think of all the schoolteachers who, since the passage of No Child Left Behind, are forced to "teach to the test" instead of doing the sort of teaching which they believe helps students to grow up well educated and prepared for the world they have to confront. Think of all the people who do a job they like and do well, who are then "rewarded" by a promotion to a managerial job which they do not like. Changing from work one enjoys to work one despises has a serious effect on one's entire life, and often on the connection to one's family. But it is within the employer's power to turn one's entire life upside down.
When we hire ourselves out to an employer we cede enormous power over our lives to those we work for. No, we are not slaves. But we are not free either.
Remember that when you hear this year's Labor Day speech about the freedom of the American worker.

Tuesday, August 28, 2012

The Olympics

A Chinese weightlifter, at the end of his turn, burst into tears and apologized to his nation. He had merely won a silver medal. The radio commentator who told the story used it to illustrate the single-minded focus of Chinese media on winning gold medals. Nothing less is acceptable. But clearly the Chinese are not alone in that. In the age of nation states and jingoism, all nations are counting their gold and other medals, certainly the US.
But I find the entire spectacle strange. Think of the enormous sums of money invested not only in the Olympic Stadium and other facilities, but think all of the hundreds and thousands of athletes who have prepared for years for this event. You don't become an Olympic class athlete by going to your job 40 hours a week and spending the weekend taking care of your yard and your house, and playing with your kids. You have to be fully concentrated on this Olympic ambition and on your training. Someone has to pay your bills and has to pay for making gymnasiums, or whatever other places are needed, available for constant training.
So an enormous mass of resources is being spent on getting these very few people to be spectacular athletes. I wonder whether that is the best way of using those resources. One Chinese observer was quoted as saying that some of these resources should be made available to allow him and people like him to do sports and to allow them to improve their athletic skills and powers.
But the people who are in charge of Olympic events, the world Olympic committee, the Mitt Romney's of this world, businesses that hope to attract trade to themselves through their sponsorship of aspects of the Olympics, and other interested parties have decided that producing a few top athletes is more important than allowing large numbers of citizens to work out, to train, and generally improve their athletic skills. The peak performances of a few selected athletes have been chosen over improving the physical health of millions of people so that they feel better in their bodies and therefore may enjoy their life more.
By this decision the large number of people who are passionate about sports are condemned for the most part, to passivity. It is difficult for them to find the time and spaces in which to work out themselves. Instead, all they can do to follow their interest in sports is to turn on their television set and watch the broadcasts (and of course the commercials.). All they can do is sit and be Monday morning quarterbacks.
It is striking that in a democracy decisions of this sort are not submitted to the people. The explanation for that is obvious: the Olympics are entirely run and financed by private business. That is the domain of private ownership and democracy has no place there because in our world private property rights are more powerful than every persons democratic rights to determine the chief features of their life.
But maybe democratic rights should take precedence over the rights of private property.

Friday, August 17, 2012

Nothing but Bad News.

Two kinds of bad news stories seem to come back with ever greater frequency. Stories of mass killings of people unknown to the killer keep repeating more rapidly. First the killing in the movie theater in Aurora; now a pretty random shooting at a Sikh temple.
The other story that keeps repeating quite regularly and, it seems, with increasing frequency is that of malfeasance by banks or other financial institutions. In these cases it is often much harder to understand what exactly went on but the consequences are much more widespread and much more serious.
The most recent bank shenanigan is the manipulation of the so-called LIBOR bank rate. How do banks know at what interest rate to lend or borrow money? Some semi-public organization in London asks the big banks every day what they paid for loans and based on the replies that institution sets the current interest rate. The only trouble about this arrangement is that the banks have lied and given false information. As a consequence interest rates have been too high or too low. Depending on what was to their advantage that day, banks reported loan rates higher or lower than they actually were.
When the banks reported higher rates than they actually paid, many other borrowers paid more for their loans than they should have. In many situations that has serious consequences. The British Medical Journal reports that some public health facilities went bankrupt, partly due to having to pay higher interest rates than necessary as a consequence of the manipulation of LIBOR rates by Barclays bank. (It appears that Barclays was not the only bank cheating on this deal. Banks such as Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, RBS and UBS apparently are also under investigation).
Some states in the US worry that their pension fund money was adversely affected by artificially high interest rates due to LIBOR manipulations.
As one commentator put it: "LIBOR represents the cost of money. It affects mortgages and credit cards, as well as corporate bonds and loans, since interest rates are almost all pegged to LIBOR. " [] The cheating by the largest banks may well affect everyone who has college loans, car loans, or mortgages on their house.
The numbers involved are very large ." There are at least 900,000 outstanding US home loans indexed to Libor that were originated from 2005 to 2009, the period the key lending gauge may have been rigged, investigators have said. Those mortgages carry an unpaid principal balance of $275bn, according to the Office of the Comptroller of the Currency, a bank regulator." [].
A final, startling fact. In 2008 and 2009 Timothy Geithner, the current Secretary of the Treasury, then head of the New York Federal Reserve Bank, knew about these interest rate manipulations by the big banks. He did nothing.
Random shootings are horrible. As in the most recent case, the shooters often die. If they survive, the courts will order lengthy sanity testing because part of us thinks that they must be insane to commit mass murder. The big bankers who cheat may seriously damage the lives of hundreds of thousands of people. Do we think that they are mentally defective? No, they're just being good capitalists.

Tuesday, August 7, 2012

Go easy on the Patriotism, please!
Travelling through the South many years ago, I was struck by the Civil War Memorial one could find in almost every town large or small. Many wars later, our towns are dotted with military memorials honoring the soldiers from World War I, World War II, the Korean War, Vietnam and many other military conflicts. Soon we will get a rash of new commemorative monuments, by which, we think, we honor the soldiers who died and those who returned from Iraq and Afghanistan.
Such memorials are, however well-meaning, no more than evasions. We put some money in the basket to help pay for the monument. We may even attend the unveiling. But then we are done dealing with the war and its aftermath.
But the veterans are not and we should pay attention to that.
Here are some uncomfortable facts.
According to the Army Times of June 1, 2012 the general US unemployment rate last May was 8.2%. Unemployment among veterans returning from Iraq and Afghanistan was 12.7%. Veterans who returned in decent shape and able to go to work, will often find that work is not available for them.
There has been a great deal of controversy about health care for returning veterans. In 2007 some veteran groups sued the government for failing to provide adequate care for soldiers who returned from Iraq and Afghanistan injured.
The divorce rate among couples where one or both members are veterans of the Iraq and Afghanistan wars is significantly higher than the divorce rate in the civilian population. The divorce rate among women veterans is more than twice that of men who returned from those wars.
Among these soldiers were, and are, 30,000 single fathers and mothers. When they go off to war they leave behind one or more children. What happens to them? A bronze statue in the middle of town will not help them grow up as happy and decent citizens.
Every 80 min. one veteran of the Iraq and Afghanistan wars attempts suicide.
Why did they go? There is a great deal of talk about patriotism and defense of freedom. "In a time of retreat and collapse, when Americans were urged to maintain their routines and get on with their lives, a few people stepped forward and did just the opposite. . . . they epitomized a raw patriotism that bolstered the nation's spirit in the bleakest days since Pearl Harbor. " Thus USA Today of 9/8/2005. According to the Heritage Foundation, a significant number of enlistees in the current wars come from well-to-do middle class and other upper-middle-class families. (
But if you look at the facts, the reality is pretty distressing. According to the Washington Post, the bulk of new recruits come from rural areas, and from the people who are not doing well, who suffer from high unemployment rates and no prospects for getting to college.
Putting all this together, we get the picture of young men and women, finding themselves at a dead end, without any prospects for getting a job, let alone a good job, or the education they need to improve their lives. They enlist in the military in order to solve that problem and after one or more tours in the theater of war, they return to find themselves unemployed once again. If they are hurt, medical care is hard to come by. In many cases, their marriages fell apart, while they were gone. On their return, many of them are sufficiently discouraged to attempt suicide.
For women the situation is even worse than for men. A significant percentage of women who served in the theaters of war were raped by fellow soldiers. If they were married when they went, when they came home their marriages were likely to end in divorce.
The picture is thoroughly disheartening. Our veterans need a whole lot of support. Their legitimate needs are not met by another war monument or flowery talk about their patriotism.