The Dark Side of Steve Jobs and Modern Technology

Several months ago, amidst all the praise and fond remembrance of Steve Jobs following his death, monologuist Mike Daisy revealed the dark side of all our new technological toys after he flew to China and uncovered the apparent atrocious working conditions at the FoxConn factory where much of our Apple products are assembled. Recently, Jon Stewart has spotlighted the story after a CNN crew followed up on Daisy's accusations.

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Stewart's commentary, of course, was in response to GOP calls to restore jobs to America, and Rick Perry's strange comment connecting "jobs" and Jobs. And, his expose obviously generates a bit of controversy and uneasiness, as Americans seek to reconcile the products they use with the labor used to create it - the type of labor which they would never seek themselves or for their children or perhaps even force upon people they don't like.

Certainly, I understand the awkward situation that labor plays in the price of products we love. And I understand different countries and cultures and standards of living. But the human being in me just has a problem with stories like this coming out of these factories. And, I just don't see how we can endorse it or condone it.

Perception vs Reality

Isn't it strange that as of last June, the United States has become a net exporter of oil. We're exporting more oil than we import. Kind of challenges that idea of more drilling ending the country's dependence on foreign oil. Cause it doesn't stay here, regardless of what people want to think.

And, isn't it strange that the yen is so strong right now, yet Japan's debt has been downgraded for years, its economic growth is in its second decade of stagnation, and its top company Toyota is scaling back profit projections and production.

That's the essence of complex systems and public mis-perception.

It's About Housing and Lending - Not Taxes

Jose Nocera of the New York Times is making the same argument about the economy that I just did. It's about a lack of cash in people's pockets which resulted in the housing meltdown. Having screwed up their job of lending money, banks have shut down and are not lending money. Without it, no new business, no new houses or buildings or highways or products. It's not about taxes, people, because businesses and individuals don't expand business or build new houses with their own money. It's always borrowed. Thus, cutting taxes will certainly gut the government and explode the debt and deficit. But it ain't gonna grow new jobs because it was never about that.

It's the lack of funds on the demand side - and that comes from the housing and banking crash.

False Answers to Recovery

The following post is a rehash of comments from the past - because it is relevant and timely. Concerning the argument over what will lead to economic recovery and growth and the return of job creation. The dispute is about taxes - though it's complicated by concerns over the debt and deficit and the need for more or less regulation. As I've noted before there is a correlation - and even a degree of causation - between lower taxes creating better conditions for growth. That is why in the early 1980s dropping marginal rates from 70% (or originally 89%) to low thirties or high twenties was significant. But fiddling around between 28 and 38 has no discernible impact - See Mankiw and Feldstein for clarification.

Additionally, naive Republicans like Palin and Bachmann like to call upon the Reagan growth as only about taxes - and they neglect the importance of Volcker breaking inflation and then dramatically dropping interest rates. That alone freed up tons of cash for economic growth. And with the expansion of credit card lending, the money infusion in the economy came on the demand - NOT supply side. Add to that the dramatic drop in oil prices following discoveries in the North Sea and Central America - which broke OPEC's hold - and lower gas prices also freed up tons of money on the DEMAND side. The economy is far more complex than simple tax rates - though lower is certainly better. And there is no reason not to broaden the base, flatten the rates, lower the corporate rate, and close the deductions - especially at the top level. Then, by means testing Social Security and Medicare and lifting the cap to at least $250K, the government and the economy will move toward solvency and fluidity.

Finally, you must keep in mind that the 2008 Crash and subsequent economic drag was not caused by tax issues. It simply wasn't. It was not caused by regulation. The current slump is not continuing because of a drag on tax issues - because there have been no changes - other than the cut taxes more. So, it's not about taxes - and anyone who thinks it is has been asleep for about the last decade - or perhaps a Hannity-induced coma. This economic problem is about cash on the demand side. Period. It was about lost wealth from a housing crash that imploded the lending industry. And that came from deregulation. This is not about taxes - it's about no cash. It's about loss of spending power from lost housing money and decreasing wages impacted by rising insurance rates.

Additionally, companies aren't hiring for one simple reason now - because they don't have to. Demand is not going up. They don't need workers - except for the skilled labor ones for which there are tens of thousands of vacancies. They are making money and increasing dividends and it's that simple. It didn't start with taxes (at lowest rates in 60 years) and it won't be solved by tax cuts - because they aren't the problem.

An overall review and reform of taxation is a great idea - and necessary. But blaming the current problems on taxes is simply foolish.

GOP Offers Nothing After Jobs Report

Taxes did not cause the 2008 Crash and recession.

The Affordable Care Act did not cause the 2008 Crash and recession.

Regulations on business permits did not cause the 2008 Crash and recession.

Regulations on the finance industry did not cause the 2008 Crash and recession.

Regulations on the energy industry did not cause the 2008 Crash and recession.

None of these caused the economic downturn, none these is preventing companies from hiring people, none of these is the key to dismal jobs report in August, none of these is the answer to the struggles of the economy.

So, why are these the only ideas the GOP offers?

Stock Market Yo-yo

And, of course, the stock market plummeted again today. Apparently investors are worrying about the possibility of another recession. So, they are selling stocks.

Could we simply ignore what the stock market is doing and simply focus on the issue of jobs. The US economy will not contract and slip into another recession as long as business owners start hiring - or at least stop laying people off. The economy is driven by consumer demand - and consumers only spend when the have money. So, if companies committed to maintaining employment levels and maintaining wages, consumers will continue to spend. That will, very simply, stave off any contraction in the economy.

If any business owner and investor is worried about a recession, he or she can simply not contribute to the problem by not cutting jobs or wages. He can contribute to the solution by hiring back some of the nine million people laid off since 2008.

OK?

Debt Ceiling Referendum

Well, I did my part.

Yesterday I called my senators and congressman and informed them of my desires as a voter in regards to the debt ceiling hike and deficit reduction plans being debated in Congress. At heart, I am worried about a government default and the loss of our AAA-rating - which is probably a lost cause at this point. Thus, like a majority of Americans I simply want a deal done, and I expect that it include a plan for long-term spending cuts. At the same time I am not opposed to revenue increases - though I would prefer them to come through the end of some deductions and subsidies, rather than any rate increases. In fact, the 2001/03 tax cuts will expire next year anyway, so there is no need to do anything with rates right now. The one thing that needs to be done is the debt ceiling needs to be raised - and it should be raised by at least $2 trillion to prevent another crisis just around the corner.

One idea that I proposed to my representatives is that a deal should simply be made to increase the debt ceiling devoid of any other plan. This plan would be intended to simply alleviate the immediate fiscal crisis and then set up the debt ceiling issue as a referendum in 2012. Make next year's election a referendum on the debt ceiling. I am sure President Obama and the Democrats would be willing to accept this deal. And many pragmatic Republicans probably would, too. The problem is GOP members who fear such a compromise in their next primaries. That is really sad. They believe that absolute rigidity on taxes is the only way they can survive challenges from their own party and their own voting base. Reagan would be saddened by such intransigence.

The reality is that the debt ceiling absolutely and unequivocally must be raised, now. And any sort of crisis is being created by people who refuse to accept that reality.

Privacy versus Anonymity

The Supreme Court is being asked to weigh in on the rights of individuals to be anonymous on the internet - namely when posting critical views. Some companies want the right to identify detractors, and, in many ways defend themselves against libelous but anonymous comments. Critics of the companies claim that identifying the names is an infringement on freedom of speech. I'm not so sure I agree.

The anonymous quality of the internet has always bothered me for a variety of reasons. Everything I post on the internet - every comment I make anywhere in society - has my name and face attached to it. For that reason, I am accountable for what I say. And I never put anything in print that I am embarrassed or reluctant to claim. And I view with suspicion anyone who posts anonymously - or, with ridiculous pseudonyms. I have often considered refusing to post anonymous comments on my blog because I have little respect for someone who will criticize or challenge my public posts, yet refuses to put a name to the comments. It always seems a little cowardly and childish. Of course, I acknowledge the time-honored tradition of anonymous news sources, especially as whistle blowers. But they are not what I am talking about - we can't extend whistle blower, anonymous source protection to everyone who wants to write a negative review of a product on Amazon. Can we? Should we?

One of the biggest mistakes I think Americans make regarding privacy issues is to believe they have a right to be invisible, or a right to not be seen. This weighs heavily in public places like schools, airports, and streets. No one is guaranteed invisibility if they are going to walk down a public street or enter a public building. The right to privacy does not endow invisibility. And, that should probably extend to anonymity. Author Michael Lewis wrote about this years ago in his book Next: The Future Just Happened. In analyzing the unintended results of the rise of the anonymity, he chronicled stories of young people who broke down the walls of the legal profession and Wall Street by using the anonymity of the internet. For example, Jonathon Lebed was the youngest person ever indicted for internet stock fraud after he bought penny stocks and then posted anonymous hype of financial message boards. Lewis explains that his "hype" was believable only because no one knew the financial advice was coming from a teenager with no credentials. Anonymity allowed Lebed to crash the gates of financial advising - and enabled him to generate nearly $900,000 in about fifteen months. Whether that was a positive impact on society, I don't know.

Ultimately, accountability is important. This is especially true in economic situations. Trust is integral to the integrity of a system. And, outside the situation of whistle blowers, anonymity is not a positive quality for American society.

IKEA Store a Monstrosity

Driving down Interstate-25 to Park Meadows Mall yesterday, enjoying the view of the Rocky Mountains, my mood suddenly shifted to a darker place as the monstrous new IKEA store in Centennial overwhelmed the landscape and blocked my view of the entire West Coast. Though it was heavily courted and promoted as some sort of savior to the local economy, the IKEA "Warehouse" also generated some controversy and opposition from residents who worried about its intrusiveness. The primary concern was about the size of the sign, which is, no doubt, a ridiculously over-sized sign for the area. The store asked for and received an exemption from codes. However, the sign pales in comparison to the blight represented by an enormous blue box of a structure that IKEA calls "a store."

I was already turned off to the arrival of IKEA after news began to surface about IKEA (in America) and its anti-labor practices. In Virginia, IKEA workers have been facing serious opposition to desires for collective bargaining after dealing with dangerous work conditions, discriminatory business practices and low wages. These stories are all the more disturbing considering IKEA's origin in the worker-friendly country and culture of Sweden. Where IKEA's Swedish workers make nearly $20/hour, have excellent benefits (provided by taxes), and five weeks of vacation, American workers are starting at about $8 with no benefits. Certainly, the higher wages and benefits given in Europe didn't prevent IKEA from growing into a strong company. Yet, they clearly had no desire to continue practices that improve society once a cash starved society and government allowed them all the shortcuts.

Certainly, Colorado needs the jobs and the commerce, and everyone hoped IKEA would be a boon to the local economy. But, as I've noted before, there are companies that benefit a society as a whole with a sense of being "stewards of the community" .... and then there are companies like America's version of IKEA.

Lucid Thoughts on the Future

Once again, divorcing himself from partisan and ideological hackery, David Brooks offers perhaps the most lucid commentary out there on business, government, and the future. Far from a "Yes" Man for the Administration, Brooks identifies the positives in an economy and country that has become the whipping boy of cynics and ideologues. Ultimately, rationale usually wins out at the ballot box, and Americans will hopefully respond to these ideas by doing what Americans do best - get to work.

Kurt Anderson and America's Reset

As Jesus Jones noted in their hit song "Right Here, Right Now," we are in the midst of "watching the world wake up from history." While the pop hit from the early 90s focused on the fall of communism in eastern Europe, Kurt Anderson's "Reset" is a calm, reflective meditation on the end of the bubble economy/bubble society that began in the 1980s and has finally and resoundingly ended after a near decimating crash. While Anderson is not big on specifics in terms of what the end of the party will bring, he is hopeful that America, and the world, will be moving into a more rational, pragmatic world view on issues of health, wealth, and well being.

As far as a predictor of trends and guru of solutions, the books of Matt Miller are more detailed and prescient. But Anderson's book is a nice short meditation, strong on hope and belief in American's ability to respond to the current crisis and be the better for it. Granted, Anderson's book was written and published during Obama's honeymoon period - and notably prior to the rage of the town hall meetings and the audacity of Joe Wilson's "You lie." However, knowing the generally moderate views of middle America, it wouldn't be an exaggeration to say that Anderson's insight and hope for a more rational and simplified future in America society is on the horizon.

As we decrease our "lottery-winner" expectations of an early retirement in our McMansion based on our unrealistic mutual fund projections, Americans may begin to downsize their purchases and simplify their lives. More rational plans for education reform and immigration reform and health care and finance and materialism could potentially lead to a calmer, happier society.

The book is a nice, easy read - big on hope and brevity. A nice reflection.

Obama and Economics

While I am watching the government spending and deficits with interest - as I always have - I think it comes down to two questions:

One, with all we've learned over the past eight, and the past thirty, years: Do you really think President Obama and his economic team are just that stupid? Are they really that naive or clueless? Do people like Peter Orzag and Paul Volecker simply know nothing about economics? Could all their discussion and all their actions just be flat-out wrong?

Two, are you hoping that what the President and his team are doing doesn't work? Not do you fear it won't or think it might not or suspect that it wouldn't or know that it can't. But, do you hope it fails? Knowing that the action will be taken for the next two and four years - and knowing that voters will judge it then - do you hope it doesn't work? Is there something in your heart and mind that hopes two and four years from now the economy is in worse shape?

For my part, I am cautiously optimistic. I hope what the Obama Administration is doing works, and I will vote two and four years from now based on my conclusions about the state of the nation at that time.

Hope for America

OK, back to the state of education - and of America - for a moment.

After my op-ed piece entitled "The Mis-education of Sean Hannity" was published on the Denver Post's website, I read some rather pessimistic feedback about education. Obviously, the readers ignored the clear concessions I made to the argument that there are problems with the education system. My point, of course, was to take exception to Hannity's use of the term "ruined." There is far too much caustic, negative, pessimistic commentary about American society. And, it's not helping us. While contemporary American society is no utopia - what place is? - life is good, and opportunity abounds. That point - one often made by conservative critics like Hannity - gets overlooked when we refer to America's schools or government or environment or families as "ruined."

Optimistic viewpoints about the future can be found in the writings of people like David Brooks of the New York Times and Fareed Zakaria of Newsweek. They are often the voices of reason in contemporary commentary, pointing out the positives in the economy, the education system, the government, and even the Middle East. Sadly, their viewpoints are often overlooked, though I encourage you to read them. Zakaria, for example, recently published a book called "The Post-American World." In many critical circles, there was outrage about the supposed negativity in the title. However, the book is a surprisingly insightful and optimistic evaluation of the contemporary world, focusing not on the fall of America, but instead of "the rise of the rest." It's not that America is failing, but that the rest of the world is finally "catching up." This is a good thing, and we should view it that way.

Last week I attended an education conference sponsored by the Denver Post/Rocky Mountain News Service that focused on the 1908 and 2008 Democratic National Conventions. Many historians spoke about the comparable aspects of both eras. One of the most enjoyable and insightful presentations came from an economist named Erik Erickson who compared the finances of both eras. When he was asked about the current and future state of the economy, he noted, "I'm quite optimistic." Compared to life one-hundred years ago, Americans are, by all measures, doing quite well. We are healthier, wealthier (at all levels), and wiser. That's something to feel good about, and that was my point for Sean Hannity.